Markups / Margins Tutorial

Author: John Honovich, Published on Apr 16, 2012

How much an integrator marks up a product when they sell it to a customer has a big impact on both the total end user cost and the profitability of the integrator. Equally importantly, markups have been going down significantly over the last decade - good news (sometimes) for end users and bad news (most of the time) for integrators. In this note, we explain the basic forces and issues in marking up products.

Calculating a Markup

****'* *** ** ********* * ******:

  • ********** **** * ******* - ********* **** * ************, *********** or ********. *** *******, *** ********** **** $*,*** *** ** indoor *** ******.
  • ********** ***** * ******* - ********* ** ** *** ****. For *******, *** ********** ***** **** ****** *** ****** *** $1,500.
  • *** ***** ****** ** *** ********** ******* ***** **** *** price ****. ** *** *******, ** ** * $*** ****** (i.e., **** *** $*,***, ****** *** $*,***).
  • *********** *** **** ***** **** ** *********** *******. ** *** example, ** ** * **% ****** ** *** ****** *** sold *** **% **** **** ** *** ******.

Markups ** ***** *******

******* *** ***** ******* ****** *** ** ********. ***** **** track ******* **********, *** ******* *** ****** *********.

  • ****** ********** = ***** **** - ***** **** / ***** Paid
  • ***** ****** ********** = ***** **** - ***** **** / Price ****

********* ** *** ****** *** *******, *** ***** ****** ** 33% - $*** ****** ******* ** $**** ***** **** ******** to * ****** ** **% ($*** ****** / $**** ***** paid)

******* ****** ** '*****' ** '*****'. *********, *********** ****** **** speak ** ******* ***** *********** **** *** ***** *******. *******, be **** *** *** ********** ** ********* *** *** *** create ********.

Factors ********* *******

* ****** ** ********* ******* ****** *******:

  • *************** ** *** ******: *** **** ********* ** * ******, *** ***** *** margins **** ********* **. **** **** *********, * ******** *** benefit **** ********* ********* *** ********** ********* ******** ***** ****. For ********, ***** ************ ***** ********* **** ***** ******* **** remote ******** ******* ** *** ****** ***** **** ****** ** suppliers ***** *** ****** *** **** **** * ***.
  • ************ ** *** *******: ** ********, **** ******** *** **** ** *** ******* of *******, ************ **********, ******** (*.*. ****, ******). *******, ****** can ** ****** ******** (*.*., ****). *** ******** ** ** especially ********* ***** ****. ** * ******* *** ** ***** checked ******* ******, ** ** **** ****** *** * **** to **** **** ******* (*** ********* *******). **** ** *** many *********** (*** ****** ** *****) ****** ** ********* ******** with ******* ************.
  • ********** *******: *********, ********* *** *** ******, ****** ******* ********* **** reduce ********** *******. *** ******* ** **** ** ********** *******. ** ********, ********** ********* **** ******* ****** ** ****** markups *** *********** *** ****** ***** *** *** *****.
  • **** ** *** ********: *** ****** *** ********, *** **** ******* **** ** squeezed. ***-**** ** ****** *** ****** ******** ******** ****** **** manufacturers *** ** **** *******. ***** ***-**** *** ** *** most ******* *******, **** *** **** *** ***** *** *** the **** ** * *** ******* ******** ****** ***** ** reduce *******.

Included ** ******?

***** *** ***** ***** ****** ****** * ***** ******, **** often ***** **** ****** ***** *** ********. **** ********* *** value ** * ***** *** *** **** ** * ******, it ** ********* ** ******** **** *** ****** ********:

  • *******: * *** ******** **** ****** ********, ** **** ***** and ****** ** ******* ** ********. *****, ********* ******** ***** low ****** ******** ****** ** ** *******. ******* *********, * manufacturer *** **** ********* ******* ** **** ** *** ******* was ****** ******* * *** ********** *******.
  • ***********: *********, ******** *********** **** ******* * **** ******** *** product********. ** *** ******* ***** ** ***** ** ** ******** 6 ****** *****, **** **** ** **** **** ** ****** to *** *** ****. *******, **** ** *** *********. **** suppliers **** ***** *** ****** *** ****** ********** **** ** refuse ** ** ** **** ** ***.
  • ********/********: **** *********** **** *** ****** ********** *** ******** *** handling ** ********, ****** ******** **** ** ** *** ***** of *** *******.
  • ***** *******: *****, ** ** ********** ** **** ********* *** ********, they **** ******* *** **** ** ***** ******* ********* ** the ***** ** *** *******.

******* * **% ** * **% ****** ** ****** ** worse ******* ************* ** **** ********** ******** *** ******** ** that ******. ****** **** ** ********* ***** ***** ******** ******.

Actual *******?

** *** ****** **** ** **** ******, ********* ****** **** ***** ******* ***** ** *** ****** **** survey *******.

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports

Power Drill Selection Guide on Dec 06, 2016
Boring holes is a basic part of running cables for most security system projects. To do so, you will need to choose the right drills for various...
Milestone Favorability Results on Dec 06, 2016
In our second installment of manufacturer favorability results (first was Pelco), we turn to Milestone. 100+ integrators rated and explained what...
Pelco Favorability Results on Dec 02, 2016
This is the first in a series of studies of manufacturer favorability. 100+ integrators rated and explained their views of each manufacturer. We...
Distributor Offers Local Job Site Delivery on Nov 30, 2016
Local distribution branches are a big differentiator for many integrators, as they facilitate quickly picking up supplies locally without having to...
Top Surprises in the Video Surveillance Industry 2016 on Nov 29, 2016
  The top 3 surprises of 2016 for integrators surveyed by IPVM were: The race to bottom, repeating 2015's Top Surprise Result New -...
Solutions to 5 Common Access Control Problems on Nov 21, 2016
Effective security is more than just good equipment. In fact, thousands of dollars in electronic access control can be wasted if they are not used...
Top Manufacturers Gaining and Losing 2016 on Nov 21, 2016
Hikvision has been the top gaining manufacturer in IPVM's annual integrator survey the past 2 years (see 2015 results and 2014 results). Can they...
Access Control Markups 2016 on Nov 09, 2016
  Access control markups have remained solid, according to new IPVM integrator survey results. Response Breakdowns We asked...
Genetec Expels Hikvision on Nov 08, 2016
Genetec has removed support for Hikvision devices, deeming them 'untrustworthy', citing customer concerns about Chinese government ownership /...
Favorite Access Control Credentials 2016 on Nov 07, 2016
When it comes to the most popular way to unlock an access controlled door, which credential type holds the favored spot among integrators? The...

Most Recent Industry Reports

Knightscope - $122,509 Revenue, $2.5 Million Loss Seeks $20 Million Investment on Dec 09, 2016
The robot that ran over a child, Knightscope, wants money and they need it. Investors can invest as little as $1,000 to participate and...
The Russian SMP Security Robot on Dec 08, 2016
A Russian manufacturer, SMP, has a commercially available outdoor security robot, at a lower price and with much less marketing than their main...
How Hikvision Beats Its OEMs on Dec 08, 2016
Hikvision GM declared that they are not aggressive with their competitors. But some of their own OEM partners disagree. Inside, we reveal a key...
Dahua Discontinuing H.264 Only Products on Dec 08, 2016
Dahua has taken a stand for H.265 and is discontinuing its H.264 only products. We examine the shakeup inside this...
IP Networking Course January 2017 on Dec 08, 2016
This is the only networking course designed specifically for video surveillance professionals plus it includes live training, personal help and...
Hikvision vs Dahua Mobile Apps Tested on Dec 07, 2016
With smartphone use and low-cost video recorders surging, many user's main interface to their surveillance system is their phone. With mobile video...
Paxton Drops US Reps, Plans Major Expansion on Dec 07, 2016
Paxton is gearing up to make a big run at  US access control success. The first step they have made is to cut all US Rep Firms, in anticipation of...
Axis Partner Elder Care Video Analytics (Smartervision) on Dec 07, 2016
Can video analytics be used to improve the care of the elderly? Axis and a video analytics startup, Smartervision, are working together to do so....
Sony IP Camera Backdoor Uncovered on Dec 06, 2016
A backdoor has been uncovered in ~80 Sony IP camera models, attackers can remotely enable telnet on the camera, and then potentially login as root,...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact