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

Anixter / Bosch Sells Direct to Amazon on Jan 18, 2017
Anixter regularly says they do not sell direct to end users or that they do not do it anymore. However, over the past year, Anixter has sold Bosch...
Cut in Half, Everfocus Shifts Strategies on Jan 17, 2017
The race to the bottom impact continues. Now, Everfocus, who used to be one of the larger budget providers, is shifting strategies after years of...
Amazon Sales of Hikvision China Cameras on Jan 12, 2017
Hikvision has become widely available in the US, including on popular retail outlets like Amazon, with over 2,600 results: 4MP Hikvision outdoor...
ADI Battles Manufacturer Partners on Jan 11, 2017
ADI is battling their manufacturer partners, building up their own competitive house brand W-Box, while manufacturers still fund ADI's business...
How Axis Can Beat Hikvision on Jan 09, 2017
Hikvision has rocked the industry globally, bullying former video surveillance revenue leader Axis even in the Western world. What can Axis...
ADI "HD Cameras As Low As $29.99" on Jan 06, 2017
ADI has reached a new low - literally. [premium_content] ADI is making no attempt to sell value or quality here, with their email subject...
Distributor's #1 Challenge on Jan 04, 2017
Manufacturers and integrators are not the only ones challenged in the security market, distributors are also impacted, fighting to maintain margins...
The Future of Video Surveillance Distribution on Dec 22, 2016
40+ video surveillance distributors around the world told us what they see as the present and future of distribution. The key positive: solutions....
Hikvision False 'Made In USA', Sold to US Government on Dec 20, 2016
A China State Owned Company, Hikvision products are listed as "Made In United States of America" and for sale to US government agencies, despite...
'Solution' Manufacturers Threaten Integrators on Dec 09, 2016
The race to the bottom has driven manufacturers to become 'solution' providers, threatening integrators. Axis shift to 'solution' sales might be...

Most Recent Industry Reports

Vivotek Favorability Results on Jan 20, 2017
Financially, Vivotek is doing relatively well. The company did ~$130 million in 2015 revenue and 2016 revenue (through Q3 reported) was up more...
PR Firm: Don't Scrap PR Spending on Jan 20, 2017
PR is not dying, warns pleads PR firm. Take 40+ year old industry PR firm LRG, who recently lamented the 'misconceptions' that: Traditional PR...
Getting Started With Your IPVM Membership on Jan 20, 2017
Here's how to get started and get the most out of your IPVM membership. Books for Members All members can download the 3 member-only books below...
Jim Cramer Sucks Up To Knightscope on Jan 19, 2017
Credit must be given to Knightscope. They are raising money right now and despite their $80 million pre-money valuation against a lowly sub $1...
ADT Launches Canopy - Professional Monitoring For DIY Devices on Jan 19, 2017
The intrusion industry has criticized DIY security systems for years, claiming systems like Canary or Scout cannot match professionally installed...
Dahua (Un)Favorability Results on Jan 19, 2017
Dahua, the mega-Chinese surveillance manufacturer not primarily owned by the Chinese government has been trying to break out of the shadow of...
Paxton Hosted Access - Disruptive Low Dealer Pricing on Jan 19, 2017
Paxton is entering the hosted access game, with BLU, at a cost that is a fraction of key competitors. The different approach could be very...
Geovision Launches Direct Cloud Offering on Jan 18, 2017
Add cloud, subtract integrator. Geovision has launched myGVcloud, an offering that allows consumers to buy cameras and cloud services directly...
Anixter / Bosch Sells Direct to Amazon on Jan 18, 2017
Anixter regularly says they do not sell direct to end users or that they do not do it anymore. However, over the past year, Anixter has sold Bosch...
Smart Power Tools For Security Installs on Jan 18, 2017
Installing a smart camera? Perhaps you should use a 'smart' drill. The intelligent appliance / IoT trend has hit power tools. In this note, we...

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