The Future of Video Surveillance Distribution

Unfortunately, whereas video was (and still remains) a large volume category for distributors they could count on for decent margins, that is obviously a big challenge now. Akin to the intrusion category where a distributor would accept lower margins in exchange for a dealer that would historically buy his other needs at better margins, video has become that necessary evil also. Meaning, distributors are being forced to accept minimal margin on video while they attempt to capture other elements of that dealers needs (think wire, cross training for Access, Commercial AV, etc, categories that haven't suffered the same scorched Earth price invasion tactics... yet).

Agree on all points.

In an Amazon-driven world, the answer has to be that distributors will be hurt by what is more and more a commodity industry. When IPVS was new and not widely understood, distributors could serve a function by closing the knowledge gap. And distributors also helped vendors with the tedious task of taking orders and delivering product.

So in 2006 it made a lot of sense. But fast forward ten years, and most of us reading IPVM have turned the crank by deploying dozens if not hundreds of "solutions" of our own -- and our idea of a solution will NEVER match a distributor's vision; none of their quotes above rang desirable to me.

Distros are suffering for the same reason why we don't have as many IPVS vendors/marketing reps (or Circuit City and Good Guys for that matter) around anymore; we just don't need as much advice on what technology to buy thanks to on-the-job experience and IPVM (and Consumer Reports on the personal electronics side).

Distributors needs to show more value than providing something as as vague as "Solutions". What they really need is a hot new and less understood industry innovation. And that's a rare nugget! Selling to consumers would add volume, but the average sale will be tiny by comparison, increasing the overall cost of sales.

Now the only question is: When and what vendor will cut the distributor cord and go direct? Don't just pick on China...any vendor could (should?) do it at any time to cut out the middleman and lower their prices to the integrator market.

I think it would be interesting to see how many integrators would take the opportunity to do so if freely given the choice to buy off Amazon, from the vendor, with free shipping, lower costs, and full RMA support?

Distributors already suck at advice, I would never trust a Counter persons advice on installing a 200+ door access system and then integrating a few IP cameras, NO WAY...

They are not technical savvy enough to even program an Ademco # 101 Panel (which by the way never needed programming)

The distributor margins are not as high as many may suspect, so the points of what a manufacturer would need to invest in to be successful- Staffing to field calls/accounting/finance/RMA (the ability to return equipment hassle free) that distribution in varying fashions provide would neutralize any perceived big savings of buying "direct". The fact is for non-project business, distributors have conditioned a JIT (Just In Time) service expectation that many manufacturers would struggle to emulate. It is that analogy why no clear Pelco-of-Lore successors have surfaced.

That being said, the Chinese lead invaders could care less about a conditioned market. It is why they are stirring so much dust. Sticking with low technical service products that have low failure rates PLUS offering direct credit would be a disrupter of an even larger scale.

I'm of the opinion that distributors are more greatly affected by the race to the bottom than integrators.  I don't know what distributor margins look like but I imagine they are rather low.  A 200 camera project consisting of Panasonic/Axis projects is substantially more revenue than a 200 camera Hikvision project.  5% margin on $200k is always better than 5% margin on $40k.  At least the integrators revenue remains untouched on everything beside the cameras/NVRs.

If the distributors choose to be solutions providers they should accept the responsibility for failed designs, oversights, poor product selection, etc.  In that case the short term revenue (and margin?)  increase is likely to be trumped by the long term costs of those failures.  As integrators we assume those risks daily.  Pushing boxes for low margin may be better than having higher risk, higher margin "solutions".

Beware the trunk slammers(TS).

TS Foreman: TS Tech #1, I need you to go over to the Amazon Locker and pick up the parts for this job in the morning.

TS Tech #1: Which locker did you send this to?

TS Foreman: The one by your house, here's the bar code. There should be 2 Hikvision 4mp domes and one Genetec SV-16, also make sure the customer signs the cybersecurity waiver.

TS Tech #1: Why do we need that? Its a stand alone camera system with no internet connection? Only 2 cameras!

TS Foreman: IDK...someone could probably fly their drone over the site and perform a MITM attack over blue tooth with some raspberry pi and beagle bone devices running some really cool python code, that's why. 

TS Tech#1: Roger that! Hey, what do I do with these Mercury panels?

TS Foreman: Give them to TS Tech #2, he just bought a Lenel server at a pc recycle place.

If distributors switched to "solutions" would that mean they become INTEGRATORS?

Ok, who is the customer's "trusted advisor" if they do not want to invest in a consultant?   As an integrator it is always my goal to be that person.

Poll results - interesting but not surprising divergence: 89% of distributors think it is a good idea for them to sell solutions but a far lower 39% of integrators agree.