Surveillance Pricing: MSRP and Discounts

Author: John Honovich, Published on Jul 07, 2011

To compare prices in video surveillance, one must understand and factor in discounting variances. Significant differences exist between manufacturers in how and what level of discounting they offer. Making it more challenging, manufacturers tend to obscure what their specific practices are.

MSRP as Start

Essentially all manufacturers offer a "Manufacturer's Suggested Retail Price" (or MSRP) which is generally the highest price that anyone would pay for a product.

At the same time, almost all manufacturers sell through channel partners to reach end users. That is, the manufacturer sells to distributors, dealers, integrators, etc. and those intermediaries then re-sell to the end user. Manufacturers always sell their products to their channel partners at a price less than MSRP, i.e., 'dealer pricing'. The level of pricing a channel partner receives often varies - primarily based on the ongoing order size and the level of commitment / exclusivity to that manufacturer.

Street Pricing

Rarely do end users pay MSRP pricing, similar to how car buyers do not usually pay 'sticker price'. The actual 'street price' that an end user pays is less than MSRP. How much less depends usually on two factors:

  • The size of the purchase and the negotiating power of the end user (as in any business deal)
  • The size of the standard dealer discount structure

2 Types of Dealer Discount Structure

In the video surveillance industry, there are two general and very distinct types of dealer discount structure. These are critical to recognize and factor in:

  • Traditional Security Dealer Discount: Generally 40% - 50% off of MSRP, this is a very sizable discount from MSRP. For example, a manufacturer using this structure may have an MSRP of $1000 for a camera but might sell that to its best dealers for $500. The effective street price that an end user will pay may be $600 or $650, far less than the MSRP. While the actual numbers vary by manufacturer, region, etc., this is the general structure of this approach. Like its name implies, the manufacturers that typically use this are traditional security companies such as Pelco, American Dynamics, Honeywell, March Networks, etc. However, some startups adopt this approach as it is the preferred one by long time security integrators.
  • IT Dealer Discount: Generally 10-20% off of MSRP, this is a modest discount. For example, a manufacturers with this approach may have an MSRP of $1000 for a camera but might still that to its best dealers for $850. The effective street price might be $950. Like its name implies, this is common with newer companies with a greater IT orientation. Axis and Vivotek are two camera manufacturers who take this approach.

Comparing Prices

When comparing prices, it is critical to factor dealer discounting structure differences. For example, comparing the MSRPs of a Pelco and Axis camera would be highly misleading without factoring in that Pelco's effective street pricing is much lower than its MSRP because of their larger dealer discounts.

In IPVM reports, we always including pricing and typically including references to online pricing which we have found to be the most accurate (though not perfect) way of predicting street pricing. When a manufacturer's products are not available online, we typically make reference to them either using a 'Standard Security Dealer Discount' and an 'IT Dealer Discount'.

2 reports cite this report:

Negotiating Discounts From Manufacturers on May 26, 2016
Is there room for just a little more discount in your purchase order?   This report outlines some common tactics that often work, and do not work,...
Legal Attack on MSRP - Impact on Hikvision, Sony, Pelco, More on Mar 09, 2016
MSRP? Make Suckers Really Pay? Many video surveillance manufacturers set their Manufacturer Suggested Retail Price (MSRP) to far higher levels...

Related Reports

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...
Anixter Sales People Selling To End Users on Nov 03, 2016
Anixter's most frequently heard defense of selling to end users is that they used to do it, but not anymore. However, this was undermined by...
Shakeup of Milestone NA Distribution Team on Nov 03, 2016
Milestone built up their NA distribution sales team in the past year, following building up their manufacturer rep network and then terminating...
The Xiongmai Botnet 'Recall' Will Not Work on Oct 25, 2016
The Xiongmai 'recall' has been the topic of global news, following the unprecedented bot net attacks that use their equipment, among...
Dahua ‘Duplicitous’ Says Botnet Victim on Oct 11, 2016
The victim of the record-breaking botnet, Brian Krebs, is calling Dahua duplicitous in its statements about the Mirai botnet. He says Dahua should...
The 'Last Chance to Save' On Hikvision Is Here on Sep 29, 2016
It is over. After at least 8 across the board price cuts in the past 10 months, including an unprecedented back to back 20% off, Hikvision has...
Get End User Leads for Just $997 A Month on Aug 31, 2016
Scam or opportunity? As trade mags continue to suffer from the decline of print media, they are scrounging for new ways to make money. Rather than...
Integrators Vs Manufacturers Direct To End Users 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...
FLIR Expands Enterprise Distribution Through ADI on Aug 22, 2016
FLIR and Hikvision have been the two top-stocked video brands at ADI, according IPVM analysis and ADI Awarded FLIR "Vendor Of The Year" in January...
Hikvision's Most Innovative Competitor - LTS on Aug 01, 2016
It should sound surprising. After all, as our recent LTS test shows, LTS products are Hikvision with very little changes. But LTS has an...

Most Recent Industry Reports

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,...
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...
XiongMai Master Password List Emailed By Chinese Spammer on Dec 05, 2016
XiongMai created an international uproar as their devices drove massive botnet attacks of major Internet sites. After pledging to recall cameras...
Hikvision Cloud Security Vulnerability Uncovered on Dec 05, 2016
A security researcher uncovered a critical vulnerability in Hikvision's global cloud servers. This vulnerability allowed an attacker to remotely...
Door Operators Access Control Tutorial on Dec 05, 2016
Doors equipped with door operators, specialty devices that automate opening and closing, tend to be quite complex. The mechanisms needed to...
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...
Hikvision CEO Declares 'We Do Not Cut Rates" on Dec 02, 2016
Hikvision has led another press trip to China, and this time Hikvision's CEO is sharing insights into their competitive strategy, including...
Network Security Audit App (March Networks) Examined on Dec 01, 2016
Verifying one's video surveillance devices are locked down against common cybersecurity vulnerabilities is increasing important, as hacks using...
FLIR Acquires Drone Manufacturer For $134M on Dec 01, 2016
FLIR has acquired Prox Dynamics, a Norwegian maker of small military-grade drones, for $134M.  FLIR president Andy Teich provided additional...

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