2x Markup And Barely Broke Even

Here's what I would like to know? How do you include in the price of the equipment and labor for the project the cost of:

  • marketing and advertising so you get the lead in the first place
  • time for the site visit and sales call
  • time for the proposal preparation
  • time for the design
  • time for the documentation/drawings
  • time for the purchasing and admin
  • time to go to site and line-out installation
  • time for job site meetings
  • time for training our techs on new products
  • time for calling tech support when the instructions are wrong or not clear
  • time for replacing a warranted product that failed in the first month
  • time for uploading new firmware to fix problems/bugs
  • time for training the customer
  • time to solve integration problems
  • time to stay abreast, test and investigate new products
  • etc...

Unless you are doing "cookie-cutter" where the true cost is more predictable, you must increase your mark-ups. Integrators are constantly dealing with integration issues such as compatibility between products (e.g. Onvif does not mean compatible!). It's the unknowns and support issues that go with technology products that can quickly absorb your time and profit. All this is very different business model from the Internet where it is Sell - Ship - Forget - Go home at 5:00. If my customer calls, we roll a truck - 24/7 - because they expect it!

Take Axis - I really love their product but as long as they continue to publish an MSRP of 15% markup above my dealer price (unless I buy $xxK a quarter worth of product), then I will look for equivalent product from different manufacturers that don't hi-jack my ability to make a decent profit.

Be careful what you define a gouge. I have markup up product 2x with reasonable hours for labor and barley broken even (I know you all get some of these customers). As an overall business, you have to be able to absorb the unknowns and true cost of doing business.

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