8 Pitfalls To Avoid When Reselling Security
By Jim Roddy, president, Business Solutions magazine and Innovative Retail Technologies magazine
On the final full day of VARTECH 2012, I was a man on a mission. Several VARs I talked with in the morning said they were interested in adopting video surveillance and security solutions but they wanted to know the pitfalls first.
So, my mission today was to gather as much information as I could on that topic. I talked with representatives from vendors, distributors, and resellers and took notes as fast as I could. Here’s some of what I heard:
- "If you compete head-to-head with analog security dealers, you’ll get killed,” a reseller told me. Analog dealers have lower labor costs because they are more efficient installing cable, so don’t try to compete on price. Focus on the interfaces – IP video with POS and/or access control for example – which will benefit your customer. Analog dealers can’t compete with IT resellers interfacing capabilities.
- If the job requires significant cable to run, subcontract it. The reseller who brought up this point to me said he deploys his own cameras, but for big jobs he outsources cable installation and rents lifts when necessary.
- Stay in your vertical. Bring security and identification solutions to the verticals you already know.
- There will be some new equipment to learn about and install, but you should mostly leverage the technology you already sell. Several vendors at VARTECH (including a cash drawer manufacturer) showcased solutions that enhance and integrate with video surveillance and other security products.
- Beware of the licensing requirements in the states you’ll sell security. Requirements vary from state-to-state. “Even if your state doesn’t have licensing requirements,” I was told, “there are some fundamentals related to running cable you should learn. They’re not difficult to understand, but you need to seek them out.”
- Before you start selling security, seek to fully understand the customer ROI or the security benefit for them. Don’t just pitch the cool features of the technology.
- “Megapixel cameras gobble up memory” I was told, so be sure to install a camera that is efficient with its monitoring functionality. For example, a motion-sensing camera will begin recording even when the wind blows a tree branch in view of an outdoor camera. A camera programmed to monitor only human forms and cars may be a more memory-friendly option.
- When I asked resellers how they broke into video surveillance or encountered a unique install, their answer was consistent: “I lean on my distributors and the manufacturers. I call with questions, and together we solve the problem.” For example, standard cameras in a nightclub were dysfunctional because dance floor strobe lights distorted the video feed. The reseller said the manufacturer recommended a special wide dynamic camera with adjustable compensation. I’m not sure what that means either, but the nightclub owner said he realized ROI on the install in six months by catching two thieving bartenders.
So those are the eight pitfalls I uncovered. But what about the upside to reselling security? One reseller who was willing to share numbers with me said in his larger grocery POS installs he adds on revenues of $30,000-$40,000 to each sale at a margin of 25-35%.
That’s everything I could gather in one day at VARTECH. I’m sure in the future you’ll hear more from BSM Chief Editor Mike Monocello on the topic of pitfalls when reselling video surveillance. Check out Mike’s list of IP Camera Pitfalls To Avoid plus Sales Advice in the recently published BSM Annual Guide To POS & Payment Processing (see page 12).
VARTRECH, the annual conference for BlueStar, was held Oct. 5-8 on the Carnival Imagination cruise ship traveling from Miami to Nassau, The Bahamas. For more articles and videos from VARTECH 2012, go to www.BSMinfo.com/InsideBlueStar.