D-Tools offers findings from their customers in an ongoing series of reports, the latest of which has just been released and is named “How Do Your Equipment & Labor Profit Margins Stack Up?” The report compares the profit margins of products and labor.
According to the data, which was drawn from nearly 1000 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 percent, while profit margins from labor averaged 55 percent. Looking at residential integrators only, profit margins from products and labor were reported at 45 and 57 percent, 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.
D-Tools will be at ISE 2024 in stand #2L500. During the show, it will demonstrate the new features and capabilities of the latest version of the System Integrator (SI) business software platform, Version 21 (v21).