Profitability: Access vs Video - Statistics

By Brian Rhodes, Published Aug 06, 2014, 12:00am EDT

Where do integrators make more money?

Access control or video surveillance?

With both systems being a core competency of many integrators, we wanted to find out which one generated more profits.

In this note, we asked over 100 integrators to tell us which system was more profitable, and why.

The Breakdown

Most integrators told us that access work is more profitable, with less than 1/4th choosing video:

Access Profitability Drivers

For those announcing access as more lucrative, two keys justify their answers:

  • Highly Skilled: Customer's overall ability to 'DIY' or choose trunkslammer labor is less common with access, due to higher design and installation complexity which resulting in a premium labor rate.
  • Higher Markups: Access hardware and software is often only sold through authorised dealers, and many openings require detailed specification, making the possibility of internet price-shopping and gathering quotes from multiple vendors much more difficult.

Video Profitability Drivers

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On the flip side, there are two common contributors why there is less potential profit in access:

  • More Video Jobs: Several integrators mentioned that video is more popular and more broadly needed by end-users, and access opportunities are much less frequent. As a result, efficiencies are lower across the board, with designs taking more time, installers having less practice, and more hidden costs driving profits lower.
  • Video Easier to Sell: Another key that causes access profits dipping is the fact earning the business takes more effort. The investment of sales people is greater because there is a fair amount of education and justification that must take place before customers sign on the dotted line.

In the sections below, we expand on these key themes with color from the integrator responses:

Less Competition For Access

While video is increasingly characterised as a 'commodity' where pennies determine who wins the job, access control takes designers and suppliers with specialty experience and business partnerships meaning buying options are fewer.

  • "Access control cannot be installed by everybody because it has a level of difficulty that most trunk slammer CCTV installers aren't qualified for. "
  • "If you hand someone a camera, they will eventually make it work. On access control that is not the case. Give someone a door controller and they will probably never make it work so they need us."
  • "The video surveillance market has been so saturated with integrators."
  • "Less competition with trunk slammers."
  • "With so many unqualified and unlicensed people installing video the prices are going down. Access control is typically out of the comfort zone for most of these unqualified people and that gives us the ability to keep our prices stable."
  • "We also do locksmith and door hardware, so usually we can incorporate more products into a project. "
  • "It's slightly more profitable because there are fewer knowledgeable contractors to install it. Everybody and their brother is doing IP or traditional video."
  • "Access is more profitable because the end users generally rely on us totally for service and service is more profitable than installation. With IP Video, many of our customer's network administrators are able to perform basic system maintenance and troubleshooting themselves."

Higher Markups for Access

With more restricted options, buyers cannot just take to the internet and find the lowest price. Even if they can find it in public channels, they often cannot 'Do It Yourself' install and instead contract it to an authorised service installer who likely has limited regional competition.

  • "I would say access control is slightly more profitable based on the majority of the products are proprietary."
  • "We are not able to mark up video equipment as much as access."
  • "Yes, because they are less likely to price shop 2 door controller or a HES door strike online."
  • "CCTV compared to Access Control is more profitable, but the margins for equipment are smaller."
  • "I think it is because of the commodity priced cameras."

However, not everyone sees more profits with access. Integrators shared two keys that impact and makes video a better money maker:

Video Market is Bigger

More video sales mean more familiarity, more practice, and greater efficiencies.  With video 'in demand', access simply takes more effort to turn profits.

  • "Margins can be higher on access but there is much lower volume so not as much money to be made."
  • "We probably do ten video jobs for every one access job, and they take less time per job."
  • "You could say no because clients are slow to make changes to access control but change their video systems and coverage regularly."
  • "Video is more profitable simply because we do more of it. A typical video job will be in the $20K range while access control is in the $3-4K range."
  • "We have much more video installation then access control - it seems in Romania access control is not so appreciated..."
  • "There are far more surveillance installs than EAC installs."

Harder to Sell Access

Because demand is lower, complexity is higher, the new construction process is contracted to multiple vendors working together, access control is a complex deal to make. Even after installation is complete, the expectation of ongoing maintenance and frequent adjustment to system hardware turns many potential customers off.

  • "Much of new construction work is fractured. The door hardware (even the electrified variety) is provided by the Division 8 contractor. The data cabling (to the doors and IP cameras) is furnished and installed by the Division 27 contractor, and the server & PC hardware is usually owner-furnished. The only think left is IP controllers, readers, software & credentials. So, as the scope shrinks, so does the gross profit."
  • "Our (acceptable gross margins) are less for access in order to incentivise potential customers to buy the systems."
  • "Not more profitable to me because of the time it takes to specify and possibly get others involved in the installation, door setup (door closing improperly) and quoting without getting the job because its too expensive for the customer."
  • "We might spend months trying to land a single access control job. Video projects come to us."
  • "With surveillance we control more of the moving parts. With access control we do not do the door works, we do not do any fire integration, we do not do the cabling etc. With surveillance we find a purpose for each camera and build around that in more of a turnkey fashion."
  • "The theory behind the design of a physical protection system based on access control is vast and the deployment of the system is not that easy as a video system."
  • "No - More complex preference programming and more demands from customers in terms of set-up and support make access control less profitable in the long run."
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