Are higher profit margins derived from equipment or labor? Data from D-Tools’ award-winning business management software settles the debate.
CONCORD, CA and BARCELONA, SPAIN — January 25, 2024 — D-Tools, Inc., the leading provider of core business management software catering to the needs of the systems integration market for 25 years, knows success in a competitive AV market requires a deep understanding of not just products but the market. 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. D-Tools presents these valuable findings from their customers in an ongoing series of reports. Available online to systems integrators, the latest, “How Do Your Equipment & Labor Profit Margins Stack Up?” compares the profit margins of products and labor.
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 labor averaged 55%. Looking at residential integrators only, profit margins from products and labor 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 publicized MSRPs. Moreover, it is imperative integrators know their fully burdened labor rates, including all direct and indirect costs, so they can accurately determine their labor 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 motorized shading. Systems integrators can download “How Do Your Equipment & Labor Profit Margins Stack Up?” and other informative reports free by going to https://www.d-tools.com/resource-center/industry-insights.
Where to See D-Tools at ISE 2024
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, please visit us at ISE 2024 in stand #2L500. During the show we will demonstrate the new features and capabilities of the latest version of the award-winning System Integrator (SI) business software platform, Version 21 (v21).
D-Tools, Inc. is a leading provider of business management software for electronics systems contractors worldwide. For more than 25 years, D-Tools’ award-winning solutions have empowered thousands of low-voltage systems integrators to streamline their business operations for greater efficiency and improved profitability. Boasting an integrated product library complete with up-to-date specifications and unique dealer-specific pricing, the D-Tools Cloud and System Integrator™ (SI) platforms enable end-to-end management of the systems integration project lifecycle. From sales and system design through installation and ongoing service, D-Tools’ purpose-built software products ensure accurate detail that directly benefits the bottom line. For more information, visit www.d-tools.com.