Are manufacturers competing with you?

 

Ken,

Perhaps I am naive or Just plain STUPID but I am glad I did not put all myapples in the security arena.Today I received a call from a client and she was terribly distraught abouta situation regarding being a foster parent, DFACS, and the biologicalparents, I did not ask a lot of questions. She needed a security systemASAP and I told her as soon as I could get a moment this afternoon I wouldcall her back and set up an appointment to come and see what we could dofor her.All this being said and done I also was under the false impression thatsuch leading vendors as Ademco, GE, Visonic, and other manufactures whopreach distribution and dealer support would not release their product towebsite wholesalers, BOY WAS i WEARING THE DUNCE HAT.When I finally was able to contact her a couple of hours later she informedme that they had gone on line and purchased a Visonic wireless system anddid not think they would need my services any longer. Well I should haveknown better so I Googled security.com and immediately found a websitecalled homesecuritystore.com and guess what here were some of the biggestnames at prices as good or better than what some vendors sell it to dealersfor. Hello.So much for the Honeywell's and others standing behind their dealers, withlittle effort articles on how to design, and install it yourself wereavailable at the touch of a few keys.So much for needing a professional to do this for the public.

Wyndle B

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more on are manufacturers competing with you?July 12, 2006

You should be in Canada where if you have been selling the GE name you arenow competing directly with GE – GE is now selling directly to the end userSecurity, CCTV, Card Access and monitoring services. Further the sales teamis telling end users that GE Security direct will be GE’s primary vehiclefor delivering higher end security solutions to the end user and the futureof the dealership programs is being discussed internally.Try talking to a property management firm using GE video or securitysolutions after they have had a direct visit from the GE.If they are doing this in Canada now the States can not be far behind.

Thanks,

Mike Macdonald

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Ken,

I came across this fact last year while trying to get some tech cut sheetsoff of a manufactures web site, I could not remember the web site to justput in the product and could have spent hours going through all the placesthe product was available including direct from the manufacturer links. Itwas the exact equipment I buy through distribution and the pricing was notto bad either. I wrote to the manufacturer and all I received in return wasa phone call from an area salesperson assuring me that being in competitionwas not their intent. After 37 years of survival in this industry I couldnot buy the line that their product and pricing being exposed andadvertised was a good thing for me, free advertising and product awarenessmaking my customer choose me because they already are aware of andencouraged by my superior product selection for their system. No wonder mytech people wait 30 minutes on hold for tech support, our not incompetition with us manufactures must be serving all those that purchasedover the internet and do not have a clue as to proper utilization of theproduct they have purchased. I am very happy that a good percentage of mynew installations utilize US manufactured equipment available only to itsauthorized and trained dealer network. We are not talking light bulbs andthermostats we are talking life safety and security, this is not "read acut sheet" 30 minute I am an expert stuff here. I can not help but feelthat in the long run this marketing strategy may just bite the hand thathas been feeding them for years.

Grant T

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Channel conflict exists and grows, from internet advertising monitoringcompanys that will take over any account using a box to re-translate atthe RJ31X to buy it off the shelf retail store packaged brand name systemsby manufacturers we all very well can recognize. Some manufacturers arenot choosing to control this or find the controls stifling the inevitable since Radio Shack has been doing this for years  why not sell retail too.Some states may mitigate these efforts with licensing, however, many dontcontrol retail sales or self installed systems and there is just too muchto try and control. Many States are lethargic at enforcing due tounderstaffing, funding and even apathy. The retail lobbyist are also verystrong and can over power legislation which I have seen myself in our ownalarm States legislation.Most certainly the low end consumer will effected for the most part. Apercentage of your new sales will be lost in the mid-market because of anattractiveness to a consumers do it your self or low voltage folks doingside work  buying the product retail and installing it on the side so tospeak. Some may be your own installers working on the side or theseelectricians making a buck.1. I would suggest that if this brand channel conflict bothers you so muchor that you are actually loosing sales or are forced to reduce the saleprice of your equipment from a prospects printed out price slam effortsback to you, that you consider repositioning your product and consider toonly carry brands or special series branding which give your companyprofessional identity and not easily shopped for price on the internet.There are executive and premier series products and some excellentprotected brands as well. I believe there is a threat to name brand producton more expensive equipment components.2. Position your company sales and marketing efforts as service centriccompany we really take care of our customers  bring a touch of classthat it is a service business and not a product brand decision. Make surethey know every alarm will need service and how important a good servicecompany is.3. Remember, people use the internet, its not hard and there will be moretools at their dispense so lets not blame them because we are all using theinternet too for comparisons and consumer items to individual degrees. Onyour sales efforts, people innately want to bond to name brands  thatsour culture speaking because we would rather have a Sony widget than a noname. You have a sales job to do. The prospect must believe in yourcompanys referrals, ethics and service in order to shift their naturalattention away from product brand only desires. My sales force rarelymention the name brands of the product unless asked with clear reason orspecifically relevant. We price our proposal as in installed price withoutbreaking out material costs. The only break down we give when appropriateis an installed price per device, like an added motion.

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JR
Competition is coming from all angles. Get used to it. The online dealerselling to the Do-it-yourselfer (DIY) is a small but rapidly growing partof our industry. You can buy anything on the net. There are some that maybe capable of installing a system themselves, but there are more that buythe product, when the online dealer makes it sound so simple to install,only to find out they are over their head. Then the customer is left tofind an installer that is willing to install someone else equipment, choiceof parts, and design. It is usually the language in theinstallation/programming manuals that throw them for a loop. The onlinedealer, buying from the same manufactures as you and I, are getting theprice because of the volume of business they are doing. Don't forget, weare selling to a local market and they are selling world wide. One drawback for the customer is when they buy online, if the dealer is notreputable, warranty and returns may be an issue. The manufacture will notnecessarily have to warranty equipment that has been resold, which is whatthe online dealer is doing. The DIY market is also adding to the falsealarm problem which is a concern for the PD's. Something that needs to bewatched and brought to light.

Bob Worthy,

CPPPresident

Secur Technologies, Inc.Coral Springs, Florida

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Hi Ken:

I love reading your emails. I would like to comment on the on line sales ofequipment near wholesale prices by Wyndie B. Let's face it. This is thereal world right now. You can find almost anything on line and at a greatprice. Here is another website in Massachusetts where a dealer has chosento sell near wholesale prices including downloading Compass software forAdemco panels for $15.00!http://www.lufkinsecurity.com/We must use our experience and knowledge when competing- not price. I haveowned my security business for 29 years. My customers choose me because ofexperience and recommendations. A customer will always be able to find alower price but it is an experienced technician who will troubleshoot thesystem efficiently using years of gut instinct not an on line help desk.Greg SmizerSprint Security

These companies have been out there for years, Time to wake up and smellthe coffee. Even Loews sells GE stuff.

Thank You;

Howard M. Blackman,

1st SecurityPresident

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Most of us are members of associations, maybe it is time for the industryto stand up and fight back. If our national and state associates threatenedto start a boycott of some of these direct retail manufacturers andsupported the ones who do not sell retail we as an industry can stop thisthreat.

Al Simon

competing manufacturers continued

 
Ken I was the one who started this discussion the other night, I have beenin the low voltage industry for roughly thirty five years primarilyengineering,installing, and subcontracting the installation of buildingautomation systems for commercial and industrial applications. We startedbranching out into the security, cctv, access, etc. arenas just before 911so we have not been in this sector as long as some and I have beensurprised at some of the blasé comments that we cannot do anything aboutthis situation and it is the wave of the future. I would have thought thistopic would have ranked up there with the battle over union vs. nonunioncontractors that erupted some time back ( lets not go back there ) butuntil tonight it has been very quite, perhaps some have been too busy toread the emails or they think this is not worth trying to do somethingabout. My father has been in the HVAC business for about fifty one years (he is seventy six and still going strong ) but not too long ago some oftheir mfg.'s started selling on line and contractors across this state gotin an uproar and stopped buying the product, all of the reputable refusedto install it for the buyers and informed them that there was no warrantyfrom the mfg. for them and it was just too bad. This has not stopped themto my knowledge YET but I know it has hurt them. This mfg. was not one ofthe largest to start with and now if HVAC contractors across the countrykeep up the pressure they will probably never achieve this goal and theinvestors at some point will pull the purse strings. One gentleman evenmade the comment that this allowed low voltage contractors and employees topurchase the equipment and under cut the industry ( I guess he has notchecked his license category lately ) but I agree with him on employees andeven the public.We are a specialized group of contractors, that's why the powers abovecreated our license category because they realized that what we do is aspecialty and not just anyone without the proper training can do it RIGHT.The fact that some of our suppliers are now dealing with the public andcompeting with us as I see it is going to result in one of two things, ifthe majority of the public can learn/figure out enough about this industrybecause it is allowed to then most of us will not be in this much longer orthe majority of the security folks can ban together and fight it and makethe stockholders regret ever going down this path. Just because theinternet is the wave of the future does not mean we have to sit on the sideline and let them take our livelihood away and the longer we wait to dosomething about it well you know the rest. This situation can be likened tothe camel with his nose under the edge of the tent, one glance the otherway and the camel is in and fills the tent and its owner is out in the hotsand.I will be sending emails to these mfg.'s, NBFA, and my local assoc. inprotest and will no longer purchase any of their equipment.

Wyndle L. Bates Jr.

Automated Creations Inc.

Low Voltage Contractors

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The 'stick together' remark makes a lot of sense. We found the 'alphabetdistributor' outbid everyone for our local law enforcement's giganticcamera system they had installed at their new 3 story office complex. gofigure.If 80+% alarm customers are serviced by 'dealers' (I still don't like thatname) with a thousand accounts or less.... (I have seen data to supportthis.... but you get the picture). then there is ONE THING, and one thingalone. that we can do that the big- money can't.And that is STOP FALSE ALARMS. ourselves. And prove it. Can you imagine alarge company caring enough to try, let alone allotting the resources to dothis? Small companies have the abilities to KNOW their customers.Every day you resolve every alarm that required a dispatch and send thatreport to the local PD. Faxing would work for now. but our local alarmassociation is in the black. we should be able to afford some kind ofsoftware assistance.. computerize this after all.Show the P.D. that the alarms are real, or user error, or we fixed theproblem promptly.Now you have a better product, provably better. and everyone can know it.That's how you win. And the only thing keeping us from doing it is ourjealousy and discretion. (necessary or not) about keeping our 'customerlist from each other'. we couldn't do this because it would require adatabase at the PD of each companies customers. that others could get theirhands on. or would it? With this, the majority of alarm companies wouldhave something to rally around that sets them off from all the $$$ AlarmCompany . you resolve this ECV stuff. no need . and you regain thecustomer's and the police department's confidence!Wild idea I know. but it would solve so much.

Zeke Lay

Comtec

Oklahoma

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Hi Ken,

I don't know what the big deal is now . all of a sudden. This has beengoing on for years and years. There are hundreds of dealers out there whoare buying equipment at dealer pricing and selling it direct. This washappening back in the 60's and 70's too. Anyone remember Sears sellingalarm equipment? Mountain West Alarm? Home Depot? Look in any homeautomation catalog or website, for alarm equipment. It's all there. Howeasy is it to buy CCTV equipment? Just pick an alarm manufacturers partnumber and plug it into Google or Ebay and see how many websites come upwilling to sell it to you . sometimes at a better price than you can buy itdirect? Why? Because some of these guys are buying equipment in quantitiesthat warrant them getting much better pricing than the small dealer can.And . why not? If you were a manufacturer and could sell hundreds ofthousands of dollars of equipment a year and your competition was doing italso . you'd do it too. Why would any smart business *not* do it? Ifthey're all doing it, what can the small dealer do about it anyway?NOTHING.With the Internet providing a direct link between anyone who can set up awebsite and the end user, the volume of product is tremendous. You can talkboycott all you want but there'd be no one left to buy from. They ALL do itand have for years and will continue doing it.The only thing that may keep you calm about all this, is to realize thatthere will always be those that *don't* want to do it themselves. and thosethat do want to, would never come to you anyway.There'd ALWAYS be a way for an end user to get equipment, if he reallywanted to. To me, these people aren't my customer and never would be. Andif they were "forced" to do business with an installation company becausethey *couldn't* get the equipment, . you KNOW they'd be the biggest pain inthe butt customer you ever had.Oh, and in case you haven't noticed, there are even Central Stations thatwill deal direct with the end user and only charge them $5.00 a month. Lotsof these companies are monitoring accounts for dealers too. I'd bet there'snot a Third Party Central Station out there who's not directly billingaccounts. If you check on it, most of these centrals are also running theirown installation and service company too. And where do you think they gettheir accounts from? Ask them how many abandoned or "orphaned" accountsthey accumulate every year. Then ask them what they do with them. So whyisn't *that* a problem? They're competing with you too!It's just a fact of life. Get used to it.GeneReliable Alarm

Ken,

I had a feeling that this was going to last forever and maybe I can put thelast nail in it.Some 55 or so years ago the NBFAA was formed as a buying group forindependent alarm companies. In the late 40’s wire, batteries and othercomponents were is short supply after WWII and the general expansion of thecountry. At that time the Bell System (AT&T, local and long distanceservices) owned all of the major central station alarm companies and wasbuying up all of the dry cell batteries (that is what we used as anindustry back then and made money changing them regularly) and othercomponents needed to be in the alarm business.Hence NBFAA is created as a buying group to get the attention of themanufacturers on smaller companies.If the time has come again for companies to come together again, thevehicle is the NBFAA AGAIN and those on your list who are not membersshould become members and those who are currently members should send amessage through their state representatives that this is what we want andwe want to see something soon.The point that has to be made here is that the dealers have to be preparedto disregard the relationships that have been made with their localrepresentatives if its going to work at all. If the quantity does notoccur, in product and dealers, the effort will not be worth it.

Bart A. Didden