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how to structure the $99 sale / see webinar notice below - sign up now
October 16, 2017
how to structure the $99 sale
    On the Standard Residential All in One Agreement, can you tell me what we should put for the Purchase Price?  I don't need the exact dollar amount (you wouldn't know that) but, what do we put in for the purchase price in the following situation:
    Selling a Security System and charging a $99.00 up-front for customer installation fee, and charging the customer $39.99/month for the Alarm Monitoring Services for 36 months.
    I guess my question is, do I need to calculate what portion of the monthly fee goes towards the price of the system and put that in the contract purchase price or?
name withheld
    In your scenario your monthly charge for the duration of the initial term should be sufficient to cover the continuing services [monitoring and perhaps repair service, inspection and maybe guard response, among other RMR services identified in the All in One].  You would not break out what you have calculated for cost of installation and equipment. 
    But, I have recommended what I think is a better business model for this "give away" or "free" alarm installation.  I refer to it was the "free installation" for the basic system.  It's actually a "waiver" of that part of the purchase price attributable to the "basic system installatoin".  Here is how it's structured:
  • you define the basic system [ie, panel, keypad, motion and door contact]
  • you set the value of the basic system, installed [ie, $999 or $1800]
  • the contract provides that the purchase price for the basic system is waived provided the subscriber completes the RMR portion of the contract
  • in the event of default you get to recoup, pro-rata for the waived purchase price
    Keep in mind that your are only waiving the purchase price for the basic system.  You charge for extras and you can also get a few months RMR up front.  
    We call this our contract for the Free Alarm Sale.  It's not on the order form at and you should call our Contract Administrator Eileen Wagda at 516 747 6700 x 312 for this form.  You will be ordering the Residential All in One and when you let us know you want the "free alarm" contract we will make the appropriate modification.  Don't forget to order the Disclaimer Notice at the same time.  All our Standard Form Agreements are completely up to date with our latest changes.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
516 747 6700