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Direct vs. AV Distribution: A Cost-Benefit Analysis

The Benefits of AV Distribution

“Oh, so you’re the middle man.” With implications of inflated costs and unnecessary complexity, this was the disparaging response from an old acquaintance while catching up after a time apart. Putting aside Almo’s “value add” let’s look at the real financial implications of sourcing equipment; considering both the hard- and soft-dollar costs of a purchase order. Hard-dollars are the unit cost of the equipment and freight. Soft-dollar expenses associated with purchase orders include:

  • The time spent getting quotes.
  • Receiving shipments (and associated work interruptions).
  • Reconciling packing lists.
  • Cutting checks.
  • Balancing the checking account.
  • The process of managing cash-flow.
  • Coordinating returns with vendors.
  • Warehousing and staging equipment until all items have arrived for a project.

Each of these soft dollar items has a direct cost in wages along with an opportunity cost from lost employee productivity. There are numerous studies available on the Internet discussing the costs of issuing a purchase order. Some studies show a range of $35.88 for automated purchase orders to $741 for some manual POs. To find your cost per PO, add up the time spent each week on all of the above activities and divide by the total number of purchase orders.

The following tables compare streamlined purchasing of equipment for a modest project through buying direct from manufacturers versus the same purchase from a distributor. These scenarios reflect actual prices of commonly used equipment. The soft-dollar average of $75 reflects the low-end of actual cost per PO as communicated by our commercial integrator clients. The manufacturer names and model numbers are masked to protect integrators and resellers from this information reaching the end user.

 

Scenario 1) Single Source from an AV Distributor

Qty Manufacturer Description Unit $ Ext $
1 Manufacture A Controller / switcher / amp $3,710.00 $3,710.00
1 Manufacture A 7” touch panel $2,340.00 $2,340.00
1 Manufacturer C Ceiling Mounting Plate for Projector $31.33 $31.33
1 Manufacturer D Projection screen $1,286.76 $1,286.76
4 Manufacturer F Remote Sequenced Power Conditioner $124.97 $499.88
1 Manufacturer F Rackmount Power Conditioner / Sequencer $343.72 $343.72
1 Manufacturer P Projector $2,474.73 $2,474.73
2 Manufacturer P Wall Mount for Displays $200.00 $400.00
1 Manufacturer P Ceiling mount bracket for high ceilings $823.08 $823.08
1 Manufacturer P Bracket assembly $274.73 $274.73
2 Manufacturer P 50” Display $839.78 $1,679.56
3 Manufacturer Q Ceiling Speakers (Pair) $214.76 $644.28
Sub Total: $14,508.07
Freight: $500
“Hard Dollar” Total: $15,008.07
1 Purchase Order (Soft Dollar Average) $75.00 $75.00
Total: $15,083.07

In order to provide a conservative estimate of savings: shipping is calculated to Lebanon, KS – the geographic center of the Continental US. Assumed origination point is a warehouse in Pennsylvania, even though closer options are available. This maximizes the distributor shipping cost in this example.

Scenario 2) Multi-source from Individual Manufacturers

Qty Manufacturer Description Unit $ Ext $
1 Manufacture A Controller / switcher / amp $3,710.00 $3,710.00
1 Manufacture A 7” touch panel $2,340.00 $2,340.00
Manufacturer A Freight: $75.00
1 Manufacturer C Ceiling Mounting Plate for Projector $31.33 $31.33
Manufacturer C Freight: $12.00
1 Manufacturer D Projection screen $1,286.76 $1,286.76
Manufacturer D Freight: $200.00
4 Manufacturer F Remote Sequenced Power Conditioner $124.97 $499.88
1 Manufacturer F Rackmount Power Conditioner / Sequencer $343.72 $343.72
Manufacturer F Freight: $28.00
1 Manufacturer P Projector $2,474.73 $2,474.73
2 Manufacturer P Wall Mount for Displays $200.00 $400.00
1 Manufacturer P Ceiling mount bracket for high ceilings $823.08 $823.08
1 Manufacturer P Bracket assembly $274.73 $274.73
2 Manufacturer P 50” Display $839.78 $1,679.56
Manufacturer P Freight: $280.00
3 Manufacturer Q Ceiling Speakers (Pair) $214.76 $644.28
Manufacturer Q Freight: $85.00
Equipment Total $14,508.07
Freight: $680.00
“Hard Dollar” Total: $15,188.07
7 Purchase Orders (Soft Dollar Average) $75.00 $525.00
Total: $15,713.07

Improving the Margins of Error on Your AV:

What would an additional margin of 1 to 4% do for your business? The above comparison favors using a distributor due to a 4.1% lower cost. This assumes per-unit costs are the same for purchasing direct and from a distributor. In some situations, not all, the per-unit cost for an item may be as much as 3% lower by purchasing direct. Running the above comparison with a 3% discount across all products for direct purchases brings the equipment total down $14,072.83 with a new total of $15,277.83. This is still a 1.3% savings by using a distributor. For the sake of brevity, these scenarios do not include every item necessary for a complete system. If we add in racks, cables, and all the other necessary elements for a complete system, the comparable savings would only increase. Additionally, in order to provide an “apples-to-apples”, the mount manufacturer specified above is constrained to the same manufacturer as the display and projector. However, over 80% of display and projector mounts are not supplied by display or projector manufacturers. As such, real world savings will be greater as more manufacturers are added to the mix.

But Wait, There’s More:

The reduced opportunity cost of streamlined purchasing can also result in productivity gains. This has the greatest implications for smaller firms where most people juggle multiple responsibilities. How long does it take a design engineer or sales person to regain full focus on a project after multiple interruptions by UPS, FedEx, and other freight deliveries for a single project? How much time is spent gathering quotes from multiple vendors only to find any potential savings diluted through increased shipping costs? How many “to-do” items are aging on your list and how would your business grow if more of them were completed? Regaining otherwise lost productivity through streamlined purchasing may allow for faster project completion, additional bid responses, selling more jobs, and greater efficiencies in general.

There may be circumstances where purchasing directly from a manufacturer may save a few dollars – perhaps with a single-item box sale. When considering some distributors also provide equipment staging, simplified communication with manufacturers, more flexible credit terms, technical expertise, and education; the benefits extend beyond streamlined purchasing. If you have not looked into utilizing the services of a distributor lately, you may be leaving money on the table.

When Dreams Become Reality

One of my favorite things to design has always been video walls. I love the flexibility they offer. I’ve “worked” on a variety of projects: A basic 2×2 with a single input source, a multi-sized display wall that was shaped to mimic the LA skyline, to a 90+ unit monstrosity with hundreds of input sources. (Notice that “worked” is in quotes) Working for an audio visual equipment supplier, I’ve had the opportunity to partner with various integrators, but have rarely had the opportunity to get my hands dirty. Coming from a background in construction, I always loved the feeling of building something and felt a bit jealous of the installers who got to see the end result first-hand. Sure, living vicariously through shared images is marginally enjoyable, but it’s tough to fully appreciate the work or satisfaction that comes from creating something on your own.

Recently that changed. During Almo’s booth setup at Infocomm, I was finally able to get a little more of the installation experience, and I was in for a rude awakening. The design was put together by Brian Rhatigan, another BDM with Almo, but it was up to me to bring it to life. I was actually excited. In the past, I’d helped on a few basic walls for trade shows, but they’ve always been relatively straight forward, with few or no surprises. Not this one. This one was in the shape of a pinwheel, and I really had no idea where to start. We had sketched out a basic design, with a few measurements based on the mount we were using (Peerless DS-VWM770). The measurements were based on a spec sheet, since the mount was recently released, and I had never even seen it before.   I was still excited….but now with a hint of trepidation. I didn’t think it would be too big of a problem with all the adjustment knobs, etc. that come on the mount.   I figured I’d knock it out in a couple of hours, tops. WRONG!  Even with all of the adjustability, the entire project took the better part of a day to complete…for 4 measly displays.

It goes to show that no matter how good products are (this mount was awesome for this project), there is no replacement for experience. The good thing is, I came away with a better appreciation of what an installer can go through…and more than ready to get back behind my desk where I belong.

3 Important Factors to Consider When Choosing the Right LED Sign

Toddy Todd Pic

There are many factors that go into choosing the correct LED sign, but a few important attributes are commonly ignored. Below are three commonly overlooked factors that should be considered when deciding on a sign manufacturer.

1) Operating Cost

Capital expenditure, or initial investment cost, is typically the first and the most influential factor that most decision makers consider. What many overlook or only give a passing consideration is the ongoing expense of the sign. The larger the sign, the more important this factor becomes over the life of the sign. Knowing that you’re installing an energy efficient sign can save you tens of thousands in operating expenses down the road.

2) Ease of Use / Management

Signs that require proprietary software, or require the purchase of third-party software can add frustration for the end user, a large learning curve, as well as push up the total cost of the project. ADTI offers the flexibility of using their included content management system, SkyShow, or any signage solution that can utilize their standard HDMI input on the SkyPanel system.

3) Ease of Installation

This is a factor that is commonly skipped over, and almost never is considered by the end user. Since it ultimately affects the bottom line, as well as the timeline of the project, I think it’s an attribute that deserves consideration. If the installation requires special structural changes because of the weight, fabrication to enclose the sign for weatherproofing, or modification to allow for extra depth, the money you saved on the lower cost hardware shrinks considerably, or is completely wiped out.

ADTI

The difficulty of measuring the increase in quality in comparison to the increase in cost, can cause endless hours of agonizing research, and can freeze the final decision. Many are drawn in by the low cost LED panels they’ve seen coming out of China, and end user’s tend to lean towards the frugal choice for the initial capital expenditure and ignore the ongoing operating expense of running an LED sign; which can be an expensive mistake. With ADTI, you don’t have to make that compromise. The combination of affordable initial cost, American made quality, IP67 weatherproofing, and incredibly low power consumption, makes for a visually stunning, “no compromise” solution.

 

 

 

 

 

 

Large Format Displays as Window Signage – Is There a Difference?

NEC LCD High Brightness Displays

A couple of months ago, I spoke with one of our Arizona integrators about a window digital signage project for a large retail jewelry store. As we discussed the project, I asked for specifics as to display size dimensions and quickly moved to content, media player, and signal distribution scheme.  The spec seemed relatively straightforward and a bill of materials would be easy to create.

But as I reviewed drawings and artist renderings, I quickly asked myself:

  • What direction do the windows face? Southwest exposure?
  • Coverings shading the windows?
  • Portrait or landscape orientation?
  • City ordinances on night time brightness?

The answers to the above questions quickly convinced me that I was actually dealing with a high ambient light specification than that of a typical within-the-building digital signage project. Additionally, this window project calls for commercial grade, 24/7 displays (for use well into the night after closing hours) that must have the following design attributes:

  • Higher brightness rating than that of a typical indoor display to ensure crystal clear visibility during the daytime
  • Resistant to the effects of high temperatures and direct sunlight that cause an isotropic blackening effect on liquid crystal
  • Advanced heat management to provide proper cooling given high temperatures and extensive operational hours
  • Polarizing film on the displays so as to be seen by polarized sunglasses in either portrait or landscape orientation
  • Ambient light sensors to dim displays in low sunlight or nighttime

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So, as you can easily surmise, we’re now talking about specially designed displays for this project. NEC, for example, manufactures 47”, 55”, and 75” high brightness displays designed for front-facing window display applications.  The XHB Series of displays addresses the above needs with:

  • High brightness (2000-2700 nits) for high ambient light conditions
  • High resistance to isotropic effects from direct sunlight
  • Quarter Lambda Polarizing film so content can be easily seen regardless of orientation or polarized sunglasses
  • Internal heat management and self-diagnostics to insure reliable 24/7 operation
  • Ambient light sensors to dim the panel for lower light and nighttime conditions

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Bottom line—front-facing window signage demands are different from indoor or outdoor models. Be sure to know the application when an end user mentions windows in a digital signage application.  Yes, these panels are an investment, but if you can’t see the displays, why have the signage?

My Visit to LG’s Business Innovation Center

Recently, I was fortunate enough to visit the LG Business Innovation Center (BIC) outside of Chicago at LG’s corporate headquarters. It was quite an experience where all of LG’s newest innovations and product verticals are on display to see and feel.  You really get a chance to experience everything that LG has on their commercial display product roadmap, and it’s there specifically for customers and end users to absorb and engage in the future of their technologies.

lg

For every vertical market there was an LG display suited perfectly for it. Whatever the application, the LG BIC has the full array of products for Hospitality, Healthcare, QSR (Quick Serve Restaurants), Transportation scheduling, Museums/Art Galleries, Indoor/Outdoor Digital Signage, Video Walls, Open-frame OLED technology, LED lighting…it’s all here for the taking.  They’ve even created a new market for “digital décor” which stems from their uniquely designed 86-inch Ultra-Stretch 4K model that is ideal for art galleries, museums and the high-end digital signage projects.

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Most notable was the new OLED display technology that LG recently unveiled. They showcase a cutting-edge 55-inch OLED 4K UHD Wallpaper display that is absolutely unreal! (see Front View) Everyone at the meeting was completely blown away.  No one could believe their eyes when they saw how thin this unit actually is.  This amazing display is literally thinner than a credit card (see side view).  And, not only was it a gorgeous image, but at less than 4 pounds, this stunning display was installed using Velcro (you can also use magnets)!

LG’s 55-inch OLED 4K UHD Wallpaper Display (Front View):

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Yes, I said Velcro! That was not a typo.

You also may notice a black plastic frame behind the actual display (see side view image), but this is not part of the actual OLED display portion and is required for structural stability due to the extremely thin, flexible OLED layer in front of it. This model is truly going to be a game-changer for the industry.  Get ready for a groundbreaking 2016 with LG’s sights set on the future of OLED technology, and the technical developments and advancements that result from those efforts.

LG’s 55-inch OLED 4K UHD Display (side view):

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So next time you are in the Chicago (or Atlanta) area and looking to see the latest and greatest that LG Electronics offers, make the trip to their Business Innovation Center. It will be well worth it, I promise!

For more information on LG’s latest products, please do not hesitate to contact me, Eric Olson, via phone at (888) 420-2566 ext. 4082 or via email at [email protected].

Samsung Broadcast Videowall: What You See Is What You Get

LAS VEGAS - MAY 12 : Welcome to fabulous Las Vegas neon sign with Las Vegas strip road background View of the strip on May 12, 2015

Since moving to Pensacola in 2014 after living in major markets like New York and Atlanta for so many years, flying out of a smaller airport isn’t so bad—with no security lines I can breeze into the airport, grab my regular parking spot right near the elevator in the garage right across from the terminal… and “Who’s bedda than me?” as they say in New York.

Visiting Vegas this time for the NAB Show, (National Association of Broadcasters), it’s the perfect event to showcase Samsung’s new broadcast video wall display solution, the UD55E-S. Looking forward to hearing feedback from dozens of major TV networks and their engineering teams over the next two days, as I deplane I’m immediately greeted by a number of Samsung displays 2 before we even leave the gate area and I’m vividly reminded how rich this destination is for digital signage as it pounces on visitors at every turn. Countless displays clamor for your attention- larger than life images and dazzling graphics promoting the latest acts and long-standing shows on the strip not to mention tantalizing jackpot tickers and even slot machines right in the terminal.  Checking into my hotel, Samsung video wall displays (UD Series) serve as a sleek, gorgeous digital canvas behind the minimalist and modern check-in desk to create the chic, hipster experience at SLS Las Vegas. Samsung displays, tablets and other technology are hard at work supporting the property’s mission for world class hospitality. From the lobby and restaurants, concierge lounge right down to Smart TVs in every guest room, (we’ll save that for another blog).

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Samsung’s UD55E-S displays are calibrated specifically for use by broadcast studios. Factory-calibrated to a low 2,800˚-6,500˚ K color temperature, UD55E-S monitors are in sync with nearly all broadcast cameras and lighting, giving you the confidence of knowing the image on your studio’s videowall is precisely what your audience at home will see. UD55E-S displays also maintain a sharp image and accurate color when viewed off-axis, and the ultra-narrow bezel-to-bezel width of just 3.5mm (about 1/8″) delivers a near-seamless videowall, with maximum impact, clarity and accuracy. In the below images taken at ISE by our VP Marketing, Melody Craigmyle in March, you can see the difference in the images through the eyes of a viewer at home watching a broadcast with a traditional video wall display (right) and UD55E-S broadcast video wall display (left).  Notice how crisp and vivid the content appears on the broadcast videowall unit compared to what the majority of studios are using today.

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For a limited time, we are offering special pricing on IN-STOCK UD55E-S broadcast videowall units, while supplies last. We can help you save money on the product AND reduce installation labor by more than half of typical requirements for traditional videowall panels with Samsung’s extensive factory color calibration and advanced color expert software (included free) and with every UD55E-S. Give me a call or email me today with details about your ON-CAMERA videowall application or studio set client who is ready for an upgrade and I’ll help you confirm if this solution is right for your specific project.

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So whether you call it “Sin City” or “The Entertainment Capital of the World,” Vegas is totally a Samsung town!

Here’s a picture of Almo’s Business Development Manager, Apryl Lamberti and Nancy Onffroy, Samsung’s Channel Manager at NAB on the show floor.

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