Lewis CaliburnD-Tools, http://www.d-tools.comInc. knows success in a competitive AV market requires a deep understanding of not just products but the market, and presents these findings from its customers in an ongoing series of reports.
Available online to systems integrators, the latest, How Do Your Equipment & Labour Profit Margins Stack Up? compares the profit margins of products and labour.
D-Tools’ software platforms help dealers actively monitor their business operations and learn more about their customers, their vendors, and their colleagues to develop better revenue strategies.
According to the data, which was drawn from nearly 1,000 residential, commercial and security integrators who sold systems in the first nine months of 2023 using the D-Tools Cloud business management software, profit margins from equipment sales averaged 43%, while profit margins from labour averaged 55%.
Looking at residential integrators only, profit margins from products and labour were reported at 45% and 57%, respectively.
“It’s clear that residential integrators still rely heavily on marking up their equipment to achieve their desired profit margins,” says Jason Knott, D-Tools data solutions architect and evangelist.
“This tactic has become increasingly difficult as the smart home market faces the continued growing influence of consumer-grade products with publicised MSRPs. Moreover, it is imperative that integrators know their fully burdened labour rates, including all direct and indirect costs, so they can accurately determine their labour margins.”
The possible solutions to the profit squeeze? Execute and strengthen attractive recurring revenue programs and expand into new niche product categories such as high-performance audio and motorised shading, says D-Tools.
Systems integrators can download How Do Your Equipment & Labor Profit Margins Stack Up? and other informative reports free, here.
To see how D-Tools’ business management software platforms can help you gain a better understanding of your business, become more proactive in your approach to the market, boost profit margins and improve every aspect of your business, visit the company at ISE 2024 on stand 2L500.
During the show, D-Tools will demonstrate the new features and capabilities of the latest version of its System Integrator (SI) business software platform, Version 21 (v21).