Wanted to get idea on what is being charged out there for like a 8 camera system with nvr installed in business or residence. Just see if im on par. Normally bare minimum i want see 1k for myself profit, although it depends on client and particular system.
A 4 camera system for a home application for example using hik cameras and 8 channel nvr would run around 2.5 to 3k turn key.
It all greatly depends on the level of effort you are going to when running cable and the level of detail in your design/work/etc. If you are just sloppy with wiring and are throwing up fixed cams and get what you get design mentality, then you are probably over charging.
However, if you are taking the time to conceal your wire as much as possible, using best practices, using a well designed plan to give best coverage and detail, then I think you would be inline or slightly below our pricing.
We figure a two man crew is about $1000/day in labor. We find that our labor component is usually equal to the hardware costs. We know we stayed on budget when that 50/50 balance is met. That is just a rough guide, all jobs not being equal, but it is a quick litmus test for the average project.
What is the profit margin you are aiming for? For instance, if you watch those TV shows like "The Profit" and stuff, I think they usually say you have to be somewhere around 50% to 70% marging to really survive? But not sure how that translates to both a product sale and installation/service structure. Maybe another topic....?
I don't watch those TV shows but, as you allude, I think it depends on labor vs product sales. For labor, you probably need 50-70% margins to factor in all your other costs.
But a lot of this has to do with how lean an organization is run (i.e., what's the cost of sales as a percentage of revenue, do you have an owner who sits as his desk doing nothing, etc.). I've seen super lean integrators who have very little 'overhead' and others who have a ton.
In my opinion, only you should know what your profit margins should be; I would highly recommend that you NOT base your profit margins on what other people are using for their business. Your markup on the product will include your overhead and margin (Gross Profit). Margin, or gross profit, is used to pay for a company’s overhead and to provide a net profit at the end of the year. A 50% markup would yield a 33% Gross Profit, your net profit would be everything else minus the cost of your overhead. We have very little overhead; so our markup is below 50% (it should be re-analyzed every year if not every quarter.). I will tell you this, we do not markup our product as much as our labor. We markup the product enough to cover overhead costs associated with procuring, shipping, inventorying, and managing the product. We have NO margin on product whatsoever; all of our margins are in labor, it limits our exposure to loss. We typically do NOT refund ANY part of labor in the event the customer requests a full refund; we will only refund on equipment. Our cost to install a 4 Channel 720p HD Video surveillance system with a 1TB hard drive turnkey is anywhere from $899 to $1200 for a 1500 Sq. foot single story family home; that is dependent on if the customer wants to conceal the wiring, add camera back boxes, and build custom made coaxial cables (our kits come with pre-made 60 feet cables).
"We markup the product enough to cover overhead costs associated with procuring, shipping, inventorying, and managing the product. We have NO margin on product whatsoever; all of our margins are in labor, it limits our exposure to loss."
Wow. How would this limit your exposure to loss? And do you not offer any warranty at all on the product? What happens if it fails in 30, 90, or 120 days? Factory warranty only and charge for depot service if they want it?
I agree with Undisclosed 1 Integrator here. You need more margin on products. We aim for 30% as a base minimum. Sometimes there are exceptions, but in general, that is our goal.
How would this limit your exposure to loss?
IMHO, He's saying that since he doesn't make any profit on the hardware, there is no profit to give back on a return. As opposed to the guy who quotes a reduced labor figure because he is counting on the high product margin.
"Wow. How would this limit your exposure to loss? "
Well, we are not a retailer, so profit on product is not where we make our money, it is in the service that we provide (Alarm Monitoring, Video verification, Video surveillance design, installation and configuration). We think of it this way; you provide the product at an attractive price to make profit on the service you are selling.
Also, warranty has nothing to do with profit margins on the markup of a product, so that is not an issue for us.
Thanks for replies all good coments. Some aspects i didn't take in consideration in those coments.
Client always signs contract with disclosure on UPS and power conditioner for protection. IMO warranty service can kill you on jobs, quarterly maintenance is always discussed along with additional labor costs like acts of god, customer changing ISP, etc. You're on line with 50 percent profit margin minimum, naturally based on business model. I have a guy who is one of the best installers of attic wiring with residential, I just tell him how it goes and hand him drives rings and supervise.
Level of effort is not always rewarded however, to combat any skepticism depending on your effort belief system, always provide some referrals to ease your customer. Take some pictures of previous installations it shows confidence, they do all the talking. My motto get what you pay for let the pictures speak for themselves. Put a painters tarp on the floor at attic stairs...bla bla bla
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