Surviving Dwindling Profit Margins

April 24, 2014 Jareikus Agnew

Surviving Dwindling Profit Margins

It’s not breaking news that profit margins on hardware are dwindling, while the idea of embracing this uncomfortable shift as a means for industry growth is a noteworthy concept to give consideration. It is beginning to become painfully clear that even though many integration firms are still making decent revenue, something is going to have to change in the future as profit margins are starting to be less reliable to drive a firm’s bottom line. The AV industry is surprisingly still in an earlier stage of development than most realize, and it is time to grow and express business value and assume the role of trusted AV professionals rather than product middlemen.

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Here are some things to consider when preparing to embrace these changing dynamics:

  1. Face Reality.  Face the reality that hardware margins are eroding head-on.
  2. It will be a balancing act. Every firm does not have the same business or compensation model, so keep that in mind when thinking about strategy. Some previously established systems may be pertinent in the transitioning process, as well as being prepared to embrace new ideas and techniques.
  3. Slow and steady wins the race. Trying to do an expensive and fast overhaul of business operations is not suggested given the fact that no one can predict the exact direction the industry is going. It is best to constantly review business practices to see which areas need immediate attention.
  4. Don’t see change as failure. Remember to embrace hardware dwindling profit margins and creative progression to take a step towards continued success. Some see this shift as a failure of the established systems, but it is actually am overdue maturation of a growing industry.
  5. Maintain service value. Show potential customers that the service and expertise provided by your firm demands a premium regardless of the products used. Also, focus on creating an immersive and customer focused experience in all projects rather than just talking about the various products available in inventory.

As we move forward remember that in this world change is inevitable, it is the way you handle the change that separates the failures from the successful. That being said, margins on hardware can still be more robust by using unique solutions such as NanoLumens displays.

Photo Via Lending Memo

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