Can anyone make any money doing this?

I am getting totally frustrated here. I have been doing alarms for about 15 years and have had 12 people working for me down to three now, but that is by choice. For about the past two years I have been trying to install HAI systems and others but every time I do someone under bids me on 90% of the projects. At the end of the day these customers go on line and say I am charging to much of a mark up because they look at what the internet guy is selling the stuff at and alot of time it is below my cost! Several times now I am gettng more and more calls to install HAI systems that people bought on line and make all sorts of make shift things work. Is this the new trend?

programmergeek said:

I am getting totally frustrated here. I have been doing alarms for about 15 years and have had 12 people working for me down to three now, but that is by choice. For about the past two years I have been trying to install HAI systems and others but every time I do someone under bids me on 90% of the projects. At the end of the day these customers go on line and say I am charging to much of a mark up because they look at what the internet guy is selling the stuff at and alot of time it is below my cost! Several times now I am gettng more and more calls to install HAI systems that people bought on line and make all sorts of make shift things work. Is this the new trend?

Click to expand...

I think that as technologies become more well known the hardware moves to the category of commodity items. You may remember when PCs first began to appear stores dedicated to selling computers were the norm. Now computers are sold everywhere and the dedicated computer stores are rare. I think the same will apply to HA hardware.

I don't fight the trend - I sell the hardware at cost or let the customer provide it - and sell them my expertise - you can have the same bottom line without having to make money on the sale of the hardware.

Shoppers have been around for awhile. My margins certainly aren't what they used to be in some categories but, there's still some points. If you're letting your clients beat you up, you need to grow a pair. They want gear at cost and yet still want to be able to count on you being around in a year or two. Better explain what the margin covers. If you're bidding against dumb competitors who underbid, don't worry, they'll be gone in no time.

Agreed, sell your expertise.

Maybe contact the clients that you didn't get, to find out how their installs were differrent from what you estimated. Be honest, people will respect that.

Can you get hardware cheaper? Are you using the right distributors?

Are you taking too much time on the installations?

Maybe you can seek out a higher class of clients, ones who appreciate quality work and will pay more for it.

Related thread.

If you are a dealer trying to compete against distributors selling the same products you will never be able to compete on the hardware pricing. Distributors buy direct and are supposed to sell to dealers at dealer pricing and retail customers at retail pricing but many distributors sell to retail customers at dealer or less cost under other names. How else can all of these retail sellers (JMAC, ISS, Survalent, Beach Audio, Spytown, Price Pros etc) be selling for less than you can buy the products for?

I have the same problems when I work for two friends who are installers. We all work for an alarm mfg and people can buy the hardware cheaper on ebay then we can buy it for with an employee discount. What truck does it fall off of which may literally be the case? They also cant compete against a Slomins or ADT for the basic systems advertised for $99 or "Free". They have to find customers who want something specific that Slomins and ADT dont want to bother with. Also they try and get upgrade business from existing or new customers. They take over more big name accounts after the 5 years from people who are dissatisfied with the service of the big guys. One thing that they have is after hours service so people dont have to take off from work.

Its not easy to make money doing installs nowadays and that is why all of us dont do it full time even though we would prefer to work for ourselves. You are lucky if you can scratch out a living on your own as its not an easy thing anymore.

One thing you may consider is sending a follow-up letter to customers who did not accept your quote asking if there is anything that the winning bidder was not able to provide etc. While it probably would not be a good idea to go in and change something (probably cant anyway) it might get you a referral if that customer was not satisfied with the install but has a friend that wants a similar system done right.

Frederick C. Wilt said:

I think that as technologies become more well known the hardware moves to the category of commodity items. You may remember when PCs first began to appear stores dedicated to selling computers were the norm. Now computers are sold everywhere and the dedicated computer stores are rare. I think the same will apply to HA hardware.

I don't fight the trend - I sell the hardware at cost or let the customer provide it - and sell them my expertise - you can have the same bottom line without having to make money on the sale of the hardware.

Click to expand...

Frederick, are you doing installs now?

AutomatedOutlet said:

Frederick, are you doing installs now?

Click to expand...

A few - I retired recently but if something comes my way that I can handle I'll take it on. I am working with a local electrical firm to help expand the company into the HA arena - the goal being to become a one-stop shop for the local builders needing both HV and LV wiring. They are also expanding into the "green" energy arena - solar and wind power.