Integrators Vs Manufacturers Direct To End Users

By: Brian Karas, Published on Aug 31, 2016

Many manufacturers have increasingly large and hungry sales forces that call on more and more end users. One recent example is Axis ~$20 Billion Retailer End to End Solution Win.

Does this help or hurt integrators? Are integrators ok with this or upset?

We received 120 integrator responses to a survey on this topic, and in this report we reveal which manufacturers were noted as going direct most often, and how integrators deal with this trend.

**** ************* **** ************ large *** ****** ***** forces **** **** ** more *** **** *** users. *** ****** ******* is **** ~$** ******* ******** End ** *** ******** Win.

**** **** **** ** hurt ***********? *** *********** ok **** **** ** upset?

** ******** *** ********** responses ** * ****** on **** *****, *** in **** ****** ** reveal ***** ************* **** noted ** ***** ****** most *****, *** *** integrators **** **** **** *****.

[***************]

Strong ********** *******

**% ** *********** *** moderately ** **** ********* about ************* ********** **** end *****, ** ******** to *** **** ********:

"*** **** ** * practical ******* ** ************* directly ********* / ******* on / ******* ** end *****?"

*******, * ******** ** *********** said **** **** **** ** work **** ** ***** benefit, ** ** ******* in **** ****** *****.

Avigilon *** **** ****** ******

**** ***** "**** ************* ** ****** have *** *********** **** manufacturers ******** ********* / calling ** / ******* to *** *****?" *********** mentioned ******** *** **** most **********.

  • "******** **** ***** **** platform ** ******** *********** and *** *****"
  • "*** ** *** ****** Regional ******** **** *** doing *** *** ********* and ********** ** ***** being *** "*******" * know * *** ** reps ******* ** ** time ** *** ******** and ************ ********. ***** of **** **** ******** with ***-*****. **'* *******."
  • "*** **** ************ **** we **** **** ** this ** *** ** Avigilon."
  • "******** *** *******. ** is **** * ******** problem ******* **** ****** don't **** *** ******* to ******* ** ***** own, *** **** ***** change **** **** ** which **** **** ********* direct ******* ** *** users *** ******* ****** (or **** **** ****) would ** * **** problem."
  • "******** ** *** **** manufacturer **** *'** ***** to ** ********** *** users **** ** ********** agencies ********* ***** ******** bases *** ****** ********** end *****."
  • "******** - **** *** medium **** ******** **** Avigilon ******** ***** **** in ** **** *** project. **** *** *** power ** ********* *** price *** **** **** it ** *** ***** contractor ** *******."
  • "******** ******* ***** ******** directly. ********* *********. **** aggressive/pushy. *** ***** *** happy ** **** ******** from ****."
  • "**** *** ******** ** todays ***********. *********** **** have **** **** ********* Ultrak *** ****... **** have *** ***** ****** as * ****** ** this ******** *** ***** misguided ********** *********."
  • "**** *** ****** *** provided *** ******** **** don't ****** **** ********* needs *** **** ** matter *** *** *** to ******* **** ** won't ****, **** ********* don't ******* *** ***** it *****'* **** *** then ****'** ***** **** it ****'*."
  • "****, ******* ** ******** direct, ***** ** **** customer ** ******* **********, the ******** ******** ** of *** *******."

**** ** ***** ************* have very ***** ******* ***** teams, *** **** *** struggling ** ******** *********** in *** ****-**-***-****** ****** trend, ****** ***** ************* on ****** ** **** up *** ***** **************.

***** **** ************* ******* emphasize **** **** ** not '****' ** *** users, ** **** **** mean *** ****** *** directly **** ****. *******, as *** ******* ***** show, **** *** ********* active ******* *** ********** end *****.

Notably ****** - *********

********* *** *********** ********* ***** ***** and ********* ****, ******* **** *** responses ********* ********* ** going ****** ** ***-*****. At **** *****, ********* (in **) ** ***** concentrating ** ******* *********** and ********** ************* *****, leaving **** **** **** to ****** *** ***** directly. *******, **** **** year,********* *** ******* ******* up ** ********** ********* ** **** ** A&E ***** **** **** increasingly ** ***** *** users.

Some *********** ********** **** ************ ****** ********

** *** *** ***** enough ** ** *** preferred ********** *** * manufacturer, *** *** ******* from *** ************ ********** leads *** *** **** initial ********, *** **** bringing *** ** **** the ******** ** ***** to ***. * ***** number ** ********* ********* some **** ** ***** this ******:

  • "*** ** ** *** been ******* ** ***** additional *****. **** ************* get ** ***** ** customers **** ** *****'* yet ***** **** **** introduce ** ** *** end ****. ** **** seen **** ** **** and ********/********** ******** *** so *** **** *** worked *** **** *** all *******."
  • "** ******* ** **** relationship **** *** ************. We **** **** **** relationships *** *** ********* quite *****."
  • "** *** **** ***** on ** *** ****** for ******* *****. *******, I *** ** ** my *********. **** * manufacturer ***** ** * client, *** **** ***** I *** ** **** they **** ** ** the **** ** ** what *** ****. **** are, ** ** ****, an ********* ** *** sales *****. * **** I ***'* **** **, so * ***** ** well *** ** ** our *********."
  • "** **** * ************ that **** ****** ********* for **, ** ** charge, ** ***** ** generate *****. ** **** another ************ **** ********* feeds ** *****. ****, we **** *** * lead **** ** *** a **** **** ****** directly **** ********* ** you *** ******* **."
  • "* **** **** ********* with * ****** ** manufacturers ** **** **** call ******, * *** placed ** * ***** list ** *********** **** can ****** *** *******." 

However, **** ** *** *** ********

************* ********, *** ***** integrator *** ** *** favorite ** * ***** region, ** ***** ***** integrators ********* **** ********** shut *** ** ***** or ****** ** **** against ******* ** *** manufacturers. ******* ********* ********* first-hand ***********:

  • "************* *** ********* **** the ********** *** ***** time **********. ************ **** a ***** ***** ***** and *** ********** ** in ** *** *** long ***."
  • "*** (****** ******* ************), Panasonic,. *** *** ********** scenario ***** * *** a ***** ******** ****** system ******* ** ** closed *** * ********* rep *** ** * board ****** *** ******* stirring ** ****. ** the *** * ********* (quoted ***) *** ** took * *** ** needless **** *** ****** to ***** **** ** original ******** *** * better ***** **** *********. "
  • "* **** *** ******** with ******* *********** **** pushing ** ******** ** another ******"
  • "**** *** ****** *** provided *** ******** **** don't ****** **** ********* needs *** **** ** matter *** *** *** to ******* **** ** won't ****, **** ********* don't ******* *** ***** it *****'* **** *** then ****'** ***** **** it ****'*."
  • "*.***** ************ *.*** **** thinks **** **** **** they **** *** **** know *** ************'* ******** 3.False ************* ** ***** - ************* **** **** about ******* ******, *** solution ******"
  • "****, ******* ** ******** direct, ***** ** **** customer ** ******* **********, the ******** ******** ** of *** *******." 
  • "*** ******* ******* ** that ***** **** "********* driven ************" ******* * manufacturer *** ** ***-**** the ***-**** **** ***** that **/*** ** * very **** ******** *** trained ****** **** **** knowledge ** *** ************."
  • "************* **** ********* ****** and ******** ******* ** a ********, ***** ** working *** *** ****. Representing * ******* ** an *** **** *** personal ******* ********** *******, not ********* *******."
  • "** *** * ************ sell * ******** *** cameras **** ** **** quoting ****. ** **** the ****** *****, *** cameras *** **** ******** at **** ****. ***** much **** *** ****** to ********** ****. *** then *** ************ **** under **, *** **** the ***. "
  • "********* ************* **** ******** / ******** / ********* to *** ********* ********, then **** ** ** to ******* ***** ********* which ** *** ******** work (***** ******* *** sales *** ******* ** misinterpreted *** ***), *** then **, *** **********, get ***** ******* *** blame ***** "*** ************ said **** ***** ****, it **** ** ********* improperly." "
  • "* **** ******* * prospect *** * ** to *** ****** ******* with * ***** *** from ****. ***** *** minutes ***** ** **** the ********, *** ******** called ** ** ****** that ** *** **** called ** ******* **** dealer (*** ******** ******** of *** **** ***** guy *** * **** bigger ****** **** ** are). * ********** *** Sony ***** *** **** this *** ** **** said ***, ** *** tipped *** ****** ******** off ******* ** **** they *** * ****** chance ** ******* * project **** **** ******** to ** (**** ******* the *****: ** ***** a ****) *******."
  • "*** ***** *** ********* themselves. **** ** ** the ********. **** ** manufacturers *** **** **** for *****. *** *** manufacturers ** **. **** the *** **** **** "who *** **** ** a *****". *** ************ OR *** ************* *** - **** ***** *** lead ** ******* **** like *** ****. "

Distributors **** ** *** *******

******** ** ************ ***** about *************, *********** ********* problems **** ************ ******* direct ** ****. ************ ******* direct, ************ *******, *** been ********** ***** ** integrators ** *** ****.*******'* *** **** **** is * **** *****.

  • "** ** *********. ******* for ****."
  • "*******: ******* ***** * large ******* ** *** area *** ******** *** end-user ****** *** *** spec's ** ***, ** even ***** **** ******* bid ****'* & ***** are ********."
  • "**** *** **** ** issue **** *** *****. Mainly **** ******* *** Graybar. **** ** ***** them ***** ** * always **** **** ** it. **** ******* ** that **** ***’* ** it *** **** **. I **** ***** **** after ** **** * fuss **** **** **** back * ******."
  • "******* ********* ****"
  • "**'** *** ****** **** Anixter ******* ****** ** our ********* ** *** past"
  • "*****. ******** ******** ** registered ***** ** **** them ****** *** ******* Anixter. *** ******* * large ********** **** ******** went **** ******* *** government ******** *** **** it ****** *** ****** an ********** ******** ******* Anixter *** ******** *** customer ** *** ******* them ** ** ***** get *** **********."
  • "*** *********** ************* *** distributors. ******* *** ***."
  • "**** **** ************ **** Anixter"
  • "* ***'* *** ** much ** ** ***** with ************* ** * do **** ************. * have **** ****** **** Anixter."

Trends ****** ** ********

** ******* ************* **** increase ***** ****** *** user ********** *******:

  • *** **** ** *** bottom ****** **** ******** for ************* ** ****** their *** ***** ** well ** ******** **** out ** *** **** market ********
  • *** ******** ***** ** a *** ****** *** end ***** ** ***** out ** ************* ******** for ******** **** **** are ***********
  • ********, *** ******** ***** it * *** **** costly *** ************* ** supply *********** / ****** to *** ***** **** their *** ***********, ********, email, ***.

Comments (11)

From the manufacturer perspective, speaking from personal experience, I can attest to having cultivated a number of end-users directly, but honestly not for any other reason than in the interest of passing qualified, locked-in leads to my integrators and dealers.

Are there manufacturers out there going direct to end-users? Sure, albeit mostly private label brands who seem all too willing to muddy the waters and burn bridges in an effort to scoop up every last sale. There are the OEM exceptions, too, such as those scrambling to generate sales as they enter new markets, see IDIS International Expansion Examined, or Hikvision Launches Direct End-User Sales, but I know for the consensus of OEMs, direct end-user relationships exist primarily as a means to woo dealers & integrators.

Now, appropriately enough, I need to go- an end-user is calling.

"Avigilon pushing their products directly. Confusing customers. Very aggressive/pushy. End users not happy to hear directly from them"

End-users who are interested in Avigilon, but not interested in hearing from them directly?

Definitely... Many end-users are tight with their integrators, and don't appreciate being directly solicited by a brand they are already researching or purchasing. I mean, that's why they have the integrator there in the first place, right? To serve as a (hopefully) impartial third party, whom the end-user pays to handle these matters on their behalf.

Our customers appreciate our manufacturers being involved. A lot of them have been burned by shady integrators that disappeared after the install so having the manufacture involved is a extra layer of safely/support for them.

I can understand cutting out distribution because they are not critical to a project's success. An integrator to install/integrate/service the final solution, however, is critical in most cases.

As one of the survey commentators wrote, a manufacturer can only quote product prices, not solution prices. Very well stated.

I can understand cutting out distribution because they are not critical to a project's success. An integrator to install/integrate/service the final solution, however, is critical in most cases.

An integrator is critical, but is his margin on product critical?

Is the integrator's margin on product critical? No, it is not. With the flattening of the world via the Internet, we should all agree there is no significant margin on today's security products not readily apparent to the customer. The end user can simply Google the part numbers and get pretty close to integrator pricing.

As I have said many times, if you want to sell cameras, stop selling cameras. Instead, sell what cameras can do. A friend of mine, until recently from outside this industry, went on his first security sales call. He was going up against a 29-camera and DVR quote for $8000USD. Cut and dried, product-only pricing. My friend walked out with an $14,000USD sale. How? Rather than selling cameras, he sold what the cameras could do. In this case, the customer is a daycare center, and he sold the fact that parents would have the ability to remotely access some of the cameras and monitor the goings on while they were at work. "Big deal," you might think. "Most any VMS can do that." Sure, but did the other integrator explain that? How many daycare centers provide that service to parents?

(Right now, that integrator is probably believing he lost the sale because his quote was too high. Nothing could be further from the truth)

Does someone buy a drill for the desire to own a drill? No, they buy a drill because they want holes. Don't sell drills; sell the holes your drills can make!

Previously in this space (scroll down after clicking the link), I wrote how you can buy an arterial stent online for ~$25USD. Should this cause panic among cardiac surgeons? Does such internet pricing "cut into the margins" of medical professionals? Of course not. Because you aren't buying the catheter, per se, but rather the expertise in knowing WHICH catheter, WHERE it should be placed, and the EXPERTISE needed to get it there.

(And if you think camera placement doesn't have value, check out the work by Stephen Bond. What he does -- providing better coverage with fewer, higher performance cameras -- bends my mind)

My advice to integrators is to STOP SELLING CAMERAS. Instead, sell your expertise and experience regarding threat analysis, surveillance design/visualization services, installation/placement/optics expertise, network engineering, storage management, training, repair, and maintenance. And also integration with other systems the customer may have.

When you are selling all that, the margin on the camera becomes no longer critical.

(I am not advocating selling directly to end users with this post; I am only responding to the question whether integrator markup on hardware is critical)

Disclaimer: These are my personal opinions and not necessarily those of my employer who pays for this IPVM subscription and frequently doubts his wisdom in allowing me to post my opinions.

No, they buy a drill because they want holes.

But what do they want the holes for? Maybe we should sell them that.

Do any of you integrators still actually just "sell cameras" or any hardware and stay in business due to that margin? If so, how do you remain in business since it can't be from just that margin? Recurring service contracts? Change orders? I am not bashing or anything I am legitimately curious.

Note: Integrators can and do remember for long periods of time such misdeeds as notes in your posting...

An integrator is critical, but is his margin on product critical?

Yes

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