We have mainly focused on CCTV, access control and A/V but are now going to offer burglar alarm monitoring. Is there a standard mark-up we should aim for?
I'm in the process of shopping the competition to see how our pricing stacks up.
Thanks for any help in advance.
It's highly location dependent, but the most common pricing structure I'm aware of is $25 a month for straight monitoring, $30-$35 a month if you throw in some kind of service agreement for the equipment, and up to $50 a month if you provide the equipment free. There's all sorts of services you can add-on, like open-and-close reporting, environmental monitoring, etc etc etc. In reality, these are basically pure profit, as monitoring usually costs you, the dealer, as little as $3-$5 a month per account if you guarantee the central a specific amount of sign-ups per month.
If you decide to sell your accounts as soon as you get them, of course, the dealer program will have some guidance as to how much to charge beyond just "as much as possible".
But ask around to find out what your competitors are charging, because you don't want to charge significantly less than what the market will bear.
not quite pure profit. most centrals will charge fees for specialty monitoring. things like hourly test, open/close reporting (in the traditional sense), etc tend to be pricey. At one point we were paying $12/account just for open/close reporting.
Rule of thumb tends to be to aim for 70-80% gross margin on alarm monitoring. Lower if the equipment is paid for, higher if youre paying for it.
Good point, I should have been clearer. Standard monitoring is pretty profitable, as the market will usually bear an 80% markup or so. Additional services cost more, of course, but they can be even more profitable than that. And 5-6 checks a day will get you through a dead week or a slow month.
Lots of things to consider, like method of monitoring such as telephone, VOIP, IP, cellular, remote service via mobile device, test timer with notification, etc.
What will your Central Station charge you for each type of service, per account. Watch the local ads and research what others are charging by going to their website. Many times they list their monthly rates on their website. Will you handle billing or pay to send out invoices?
I've never heard of a "standard markup" in terms of what you should charge for monitoring. It depends on your overhead and what you can set your rate to stay competitive and make it worthwhile. Remember you'll need to pay for a business license in the jurisdiction where your monitored customer is located, and maintain those licenses for as long as you monitor that customer. Lots of overhead to factor into the equation.
Ask questions and get answers to your physical security questions from IPVM team members and fellow subscribers.
