Subscriber Discussion

What Is The Industry Margin For An Average IP Video System?

MC
Marty Calhoun
Oct 31, 2017
IPVMU Certified

Average system is 100-200 IP cameras,4 monitors. I am seeking input on what others think an acceptable margin would be versus what would be considered a great margin. I hope everyone understands the difference between margin and mark-up? I have been surprised to learn there are those that do not. Manufacturer of cameras is irrelevant, we are discussing completed systems, that is your choice to make please keep that out of this discussion. Percentage wise is the answer, thank you.

(2)
U
Undisclosed #1
Oct 31, 2017
IPVMU Certified

I hope everyone understands the difference between margin and mark-up?

Markup% = Margin% / (100 – Margin%) * 100

           

UI
Undisclosed Integrator #2
Nov 01, 2017

What is hoped to be gained from this exercise?

MC
Marty Calhoun
Nov 01, 2017
IPVMU Certified

Simple curiosity where others may be, please leave specific manufacturers out of this discussion, thank you for the response.

LT
Larry Tracy
Nov 05, 2017

45

(1)
Avatar
Christopher Freeman
Nov 01, 2017

30%

 

MC
Marty Calhoun
Nov 01, 2017
IPVMU Certified

Thank you

U
Undisclosed #1
Nov 01, 2017
IPVMU Certified

What Is The Industry Margin For An Average IP Video System?

Why sell average systems at all?

(2)
UI
Undisclosed Integrator #3
Nov 04, 2017

 I was hoping for more responses but I will bite.

 

We are a startup and still need to really factor overhead into our costs.

 

But when we do an estimate I factor in hardware costs and labor costs without insurance etc, just straight labor. I try to be around 30-50% based on job size, and how bad I want the job.

 

Now another question is, what is included in that cost? Is it just hardware? Labor? Overhead?

 

What about you Marty?

(2)
JH
John Honovich
Nov 06, 2017
IPVM

I was hoping for more responses but I will bite.

#3, we have lots of responses inside this post - Axis, Avigilon and Hikvision Markups Revealed.

Here's an excerpt of Hikvision dealers from that post:

>> Dealers of Hikvision and their OEMs routinely generated 100%+ markups, the highest of any manufacturer cited: 

  • "Hikvision or OEM Hikvision... we use a 2.2 x multiple if we buy for $100 we sell for $220. It seems like a fair price"
  • "For cameras bought 100$, I would sell for 280$"
  • "Hikvision high availability at distributors, decent range of cameras 80% markup"
  • "Small [systems]: Hikvision 100% markup"
  • "We buy in bulk to secure good pricing and work on a 50% margin (100% markup)"
  • "100% it's what people are willing to pay"
  • "Markup is about 50-75% because its profitable"
  • "LTS [Hikvision OEM] - TVI 260% have great prices from supplier IP 130% not as good prices from supplier + slightly higher freight"
  • "Hikvision... 60-70% because the cameras are so cheap i have to make that margin if people go for more expensive say axis then its 25%"
  • "LTS... Average markup = 110.08% Due to my low cost of cam I can still have large markup and still be lower than a lot of my competition."

>> However, not every Hikvision dealer cited ultra high markups, some had much more average markups, as noted below:

  • "45% its what the market will bear."
  • "Margins anywhere between 28% to 50% depending on the if it a bid or current customer."
  • "Today's consumers are pretty knowledgeable. They can easily figure out a model number and reference the average pricing online. I stick to the 20-25% mark-up simply as it's easy to justify that number as a reasonable profit to a customer."
  • "I try to stay between 20% on the low end (if I need to stay low on cost to win the job) to 40%, so 30% would be the average. I feel that, especially at the low end, the cameras are becoming a commodity and are easy to price out (online). So customer are better informed and won't tolerate exaggerated markups."
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MC
Marty Calhoun
Nov 05, 2017
IPVMU Certified

 

Margin= Net Profit after all expenses including Administrative Overhead, Vehicles, Gas, Workmans Comp, Health Package and Labor costs. 

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U
Undisclosed #1
Nov 05, 2017
IPVMU Certified

I’m surprised you don’t want gross profit margin.  

Operating and net profit margin are interesting, but because not COG expenses are not directly correlated to sales, some arbitrary time-period averaging of fully burdened cost can skew things month to month.

Do you calculate your net profit margin before any sale?

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