The cost of everything seems to be rising, and the AV and lighting industry isn’t immune. If you’ve been trying to cost up an AV project recently and are finding it hard to pinpoint what a reasonable cost might be, you’re not alone. In this article, we explore why this might be happening, and what you can do to ensure you’re getting the best value for money.
In this article, we'll cover:
Why are my AV & lighting quotes fluctuating so much?
There are several potential causes of changing supplier costs, such as higher labour costs, material costs, import costs, and increasing overhead expenses due to the rising cost of living and energy crisis.
Worker shortages
Many companies have been adversely affected by strikes and worker shortages, which have caused operational disruptions and put a strain on their ability to deliver on quotes. Not only have these labor-related issues had a direct impact on the company’s ability to meet demand, but they have also caused indirect repercussions such as delays in shipments, overworked staff, and supply chain disruptions. This has resulted in increased costs for AV and lighting supplies, as well as a decrease in the amount of stock available.
Changes to manufacturing and import
The rise of tariffs, sanctions, and other trade restrictions have made it more expensive to import materials and components from outside the country. This has led to a decrease in the availability of certain materials, and an overall rise in prices. Additionally, the increased cost of energy has caused higher production costs, meaning many manufacturers have had to pass on these costs to the end user.
According to a recent survey by AVIXA, the Audiovisual and Integrated Experience Association, “88% of AV providers have seen their labor costs increase in the past year, and nearly 30% report their labor costs have increased by 25% or more.”1
This has resulted in an increased demand for domestic production, and as such, suppliers have raised their prices to cover the cost of labour and materials. Many companies have also had to adjust their business models in the face of rising costs and changing customer needs. All of this has resulted in fluctuating, and often higher, overhead costs that are passed on to customers.
What can I do to protect myself from rising costs?
If you work with a regular supplier, there are steps you can take to deal with these fluctuations and protect yourself in the long term. Even if you're working on a one-off project, the following points are still applicable as they can be scaled up or down accordingly.
Agree on preset pricelists
One option is to get your supplier to agree on a set pricelist for a set timeframe, so that you know the prices won't change for a certain amount of orders or spend. Most suppliers will lock in the price of their quote for a set amount of time anyway, usually 30 days, but asking for a 3-6 month pricelists can help manage fluctuations in costs if you’re likely to place multiple separate orders.
This can be a beneficial strategy for both parties, as it provides a stable point of reference for both you and your supplier. This can also ensure that the supplier can predict stock levels more accurately for you, leading to fewer delays in shipping and overall project turnaround down the line.
Request price matching
You could also look at competitors and bring competitive prices to your supplier to see if they can match these, or alternatively, go straight to the manufacturer if installation isn't an issue. This will help you investigate the market and get the best value for money. Note that while material costs can often be negotiated, installation costs and labour time charges may be less flexible.
Buying direct from a manufacturer
If you're considering importing your own materials without the help of an established supply partner in order to save money, remember that shipping items individually rather than in bulk can cost more and therefore offset any cost savings made on the products or materials. Also, if you’re going solo, always make sure to have a strong, up-to-date technical drawing for your total solution, so you don't miss out on any vital pieces of tech that are needed for your solution to work.
DIY vs. professional installation
As per the point above, you might be able to save some money by taking on the installation of your own materials, however, make sure you consider the longer timescales and loss of expertise you’d have to overcome. Reputable AV companies often stand out due to their combination of implementation expertise and industry-recognised brand partnerships. This allows them to buy materials at a lower cost than independents can, enabling them to price up larger projects at a lower cost.
Don't buy the brand - buy the solution
Professional suppliers and installation experts also know exactly what products are actually needed, and which are ‘vanity buys’, simply based on the reputation of a well-known brand. A good AV company can deliver a great end result using any brand of product, thanks to their in-house expertise and ability to innovate and develop bespoke systems for specific customer needs.
Benefit from experience
AV companies have a team of experts on staff to help each other solve even the most complex problems. Keeping this team constantly available will, of course, affect the total cost of your quote. If you are keen to take on a project solo but want to benefit from your supplier's knowledge base, ask them if they offer consultation work for a set fee. This can help you keep your project moving along. They might be able to help with troubleshooting, specific integration questions you might have, or even deliver detailed technical drawings for your project.
Create better briefs
Expected labour time can heavily impact any AV or lighting integration quotes you receive from AV suppliers. If there’s any scope creep or additional integrations are identified as needed during the project, this labour time can increase significantly and therefore impact the overall cost of the project. To ensure the quote you receive reflects the final bill, it's important to provide a comprehensive brief to your supplier and discuss it thoroughly.
Check out this article about how to brief suppliers or download our free briefing template to set off on the right foot.
Future-proofed budgeting
In addition to these options, you could also consider budgeting and forecasting the costs associated with the AV and lighting you require. This should include ongoing maintenance costs that you may not have initially budgeted for such as potential repairs outside of warranty periods, or future upgrades to the system.
Additionally, you should consider the cost-savings that can be made by ensuring your initial installation is future-proof. This would involve investing in up-to-date equipment and materials that can help you stay ahead of the curve. While the initial outlay may be higher, the long-term investment could be more manageable as you will have the benefit of the latest technology and fewer unexpected maintenance costs.
Perhaps your budget could accommodate potential changes in installation and material costs over a few years, rather than just for a single project. Ask your finance team for advice with cost projections if you are likely to set aside large budgets that will need to cover multiple separate projects.
There are a lot of factors leading to fluctuating costs in the AV and Lighting markets at the moment. By taking the necessary steps and doing a little bit of legwork, you could be saving yourself a good chunk of money and headache in the long run.
At Hutchison Technologies, our team is here to ensure that you get the best possible quote for your requirements, and to create amazing end results. We also offer a range of consultancy services and additional support, from full project design and delivery to ongoing maintenance and support. If you have a project in mind, get in touch with us today and let us help you make it a reality.
1 AVIXA. “AVI Insights - Workforce & Workplace Survey.” AVIXA, July 2020, www.avixa.org/insights/workforce-and-workplace-survey.