Strategies for Buying Equipment

[WholeHomeControl]

On 4/30/2020 at 11:48 AM, phantomgordon said:

What a remarkably dumb point. I paid apple...not apple AND and integrator for a macbook.  Just like I want to pay C4 for the hardware. Not C4 AND and integrator for the SAME PIECE OF hardware where the integrator has done little value add TO THE HARDWARE. AND I've said I think integrators ought to be well paid!!!!!!  Just not for hardware.

 

In some sense, this is much ado about nothing.  Many dealers would sell you equipment at whatever margin you wanted, but at the end of the day they know what they need to charge for the overall solution to stay in business and make a reasonable profit.  The (rather arbitrary) breakdown between equipment and service fees is really not consequential.  It's a zero sum game.

 

[phantomgordon]

1 minute ago, WholeHomeControl said:

In some sense, this is much ado about nothing.  Many dealers would sell you equipment at whatever margin you wanted, but at the end of the day they know what they need to charge for the overall solution to stay in business and make a reasonable profit.  The (rather arbitrary) breakdown between equipment and service fees is really not consequential.  It's a zero sum game.

 

for the 1000th time, it's not. We just disagree. Move on already

[WholeHomeControl]

6 minutes ago, phantomgordon said:

for the 1000th time, it's not. We just disagree. Move on already

You are welcome to not respond.  This thread is not just for you.  Customers may benefit from understanding how dealers price projects.

If I sell a customer a controller and programming, I know that I need to charge, say, $1,000 for that solution to make a reasonable profit.  This is true whether I invoice that customer $0 for the controller and $1,000 for the labor, or $1,000 for the controller and $0 for the labor (or anything in between.)   The way I break things out comes down to customary practice.  That's all.

[phantomgordon]

You've ignored incentives among other things.  It's why many dealers (I accept you're very honest and not one of them) push  Crestron and Savant over C4; they make more money on the hardware.

[WholeHomeControl]

4 minutes ago, phantomgordon said:

You've ignored incentives among other things.  It's why many dealers (I accept you're very honest and not one of them) push  Crestron and Savant over C4; they make more money on the hardware.

I take your point, and won't try to convince you to trust any given dealer.  (I wouldn't ask someone to trust me, either - it's a meaningless request.)  I will only say that if a dealer's integrity is compromised, they will have plenty of opportunity to tip the scales of fairness in their favor.  

Let me just add that the current pricing architecture isn't perfect.  But, the alternatives have their issues, as well. 

I don't know where you wound up with your project, but you might be most satisfied with a cost plus agreement, as someone else mentioned a while back.  On whole, I wouldn't expect to pay more or less with that approach, but it seems to jibe well with your take on things.

 

[phantomgordon]

1 minute ago, WholeHomeControl said:

I take your point, and won't try to convince you to trust any given dealer.  (I wouldn't ask someone to trust me, either - it's a meaningless request.)  I will only say that if a dealer's integrity is compromised, they will have plenty of opportunity to tip the scales of fairness in their favor.  

Let me just add that the current pricing architecture isn't perfect.  But, the alternatives have their issues, as well. 

I don't know where you wound up with your project, but you might be most satisfied with a cost plus agreement, as someone else mentioned a while back.  On whole, I wouldn't expect to pay more or less with that approach, but it seems to jibe well with your take on things.

 

That's all very fair. Thanks

[Amr]

Life goes on gentlemen!

In my case when I went for a full home automation solution; and I’m an electronics engineer; I opted for C4! Received a quote and negotiated a cost plus job when I felt prices on hardware were inflated, my dealer was decent enough and transparent, also made suggestions to cut cost, explained pros and cons of every component and add on!

He also suggested that I take parts of the solution as am tech savvy like network and also suggested me to hook up everything and he do programming and integration to cut labor cost? Odd? He gained a very satisfied customer and I did recommend him to tons of my friends

[WholeHomeControl]

58 minutes ago, Amr said:

Life goes on gentlemen!

In my case when I went for a full home automation solution; and I’m an electronics engineer; I opted for C4! Received a quote and negotiated a cost plus job when I felt prices on hardware were inflated, my dealer was decent enough and transparent, also made suggestions to cut cost, explained pros and cons of every component and add on!

He also suggested that I take parts of the solution as am tech savvy like network and also suggested me to hook up everything and he do programming and integration to cut labor cost? Odd? He gained a very satisfied customer and I did recommend him to tons of my friends

This is consistent with the idea that dealers are not so much motivated to maximize absolute profit on any given job as they are to find the intersection of financial viability for them and ultimate satisfaction for the customer.  In other words, they know what margin they need to make on any given job to stay in business, and beyond that they just want to ensure the customer is happy with the price/performance of their purchase.

I'm not saying all dealers operate on this principle; just that this mentality may be more prevalent than most customers think.  It's the road to long term viability.

 

 

 

 

 

[NextGenAV]

I read through this with interest ... I did a job recently for a friend of a friend and went down the route of pretty much giving him the equipment at trade on the assumption that he would install most of the kit and I would program it up. Nothing wrong with that, and I was happy to just do remote stuff.

He gave me back a EA-1 he said he wouldn't need now ... tested to be knackered! dead as a dodo. Of course it 'was like that when I got it' .. hmmm

Decided not to put speakers in a couple of rooms so returned a Traid amp ... a two year old one (which I found on sold listings on eBay)

Couldn't be bothered dealing with anything else so cut my losses at a couple of thousand. It's not always the dealer that is trying to maximise return from the customer.