Why Central Vac Retrofit Installs Are Worth It

In an industry headlined by transcendent home theaters and omnipotent control systems, central vacuum may be the least cool category available to custom integrators. Coolness aside, however, central vac can be an extremely reliable and profitable cornerstone of an integration business. And in the current market, that's what many integrators need.

Several consumer electronics product categories, including flat panel TVs, have fluctuating margins. While a client isn't likely to invite friends over to see his new central vac system as he would with a flat panel TV, he's just as likely to be satisfied with it. The margins that integrators earn, meanwhile, are likely to remain steady.

"A lot of dealers are very techy," says Paul Runyan, sales manager for Beam, a manufacturer of central vacuum systems. "But the bottom line is that consumers get central vac. It's not really electronics; at the end of the day it's a vacuum cleaner. But it's a product that dealers can make a lot of money on."

The dealers who appreciate this tend to offer central vacuum mostly to the new-construction market. There's a 70 percent to 30 percent new-construction to retrofit split in the central vacuum market, according to Runyan. Given the recent slowdown in homebuilding, though, integrators who only do central vac in new constructions will have fewer jobs on which to bid.

"The retrofit market makes a lot of sense for integrators," says Greg Calderone, general manager, floor care, for H-P Products, the maker of Dirt Devil and Vacuflo central vac systems, "especially in a downturn building market."

Logical though it may seem, not a lot of integrators seem to be embracing retrofits. There is a perception among integrators, to put it bluntly, that retrofitting a home for central vacuum is a pain in the butt. After the walls go up it's too difficult to run tubes and find locations to place outlets and it's not worth the time and effort, according to many dealers.

Those who think that way are wrong, says Bob Mariano, owner of Cyclone Home Systems, Inc., a Berlin, Conn.-based integrator. "They're a little afraid of retrofits," he says, adding that with a little education they'd learn that it's not that hard and it's extremely profitable.

Up to the Challenge

Rico Dubach, president of Bountiful, Utah-based Swiss Boy, says virtually any integrator can learn to become efficient with retrofit central vac installations. "If an integrator is comfortable running wire in existing homes, central vacuums are a small step from that," he says. "We have found it easier to install vacuums into existing homes than intercoms and trying to put speakers into every room is more challenging than installing three or four vacuum inlets."

Not all houses, though, can be easily retrofitted for central vac. For some integrators, this creates a red flag for the product category. It's not a valid concern, says Bill Corwin, sales manager for A-Tech Easy Living Store in Des Moines, Iowa. He says A-Tech has evaluated over 10,000 homes for central vac installations and "we've turned down about three."



Similarly, Mariano says he's been doing central vac for 25 years and "can remember only two or three times I've had to turn away from a retrofit."

Dubach says Swiss Boy can do a retrofit in any home, "it just depends on how bad the customer wants it!"

Corwin, Mariano and Dubach have been doing retrofits for years, so they may be more equipped to make it work than the average integrator. Still, the average integrator shouldn't have much of a problem, says Mariano. "Houses built in the last 25 years are easy," he says. "The homes are pretty standard. The two-story colonials have closets that open up to the second floor, for instance. There are little tricks for everything."

He adds that if integrators are working with good central vac manufacturers, "all they need to do is reach out to them" for retrofit support. He says good manufacturers have seen all the obstacles and know the easiest ways to overcome them.

The southern part of the country, for instance, is more difficult, according to Mariano, because many homes don't have basements. "But there are dealers in Florida doing retrofits," he says. "They're coming up through the garage, running pipe through the attic and dropping it down."

In difficult homes, Dubach adds that Swiss Boy often uses the back of closets or furnace flue chases to run pipe vertically.

Corwin agrees that manufacturers can help integrators overcome most obstacles. "They know all the tricks of their top retrofit installers," he says. For instance, if an integrator is located in an area where the local architecture creates a challenge -- no basements in the South, adobe in the Southwest -- manufacturers can reference their successful installers in that area.

One manufacturer, Runyan, says the biggest challenge for integrators doing retrofit central vac is the time factor. "It does take longer than new construction," he says. "Also, you need to have confidence in your installation crew [because the jobs are more complicated than new construction jobs]. You overcome this with training from manufacturers and by looking at the profit potential."

Challenge Pays Off

Not only do integrators get paid more for retrofit central vac installations versus new-construction, they get paid immediately. "You make full margin, not paying a builder," says Runyan. "And you get paid that day."

Builders often have lines of credit or have structured payment plans with their contractors. Homeowners do not. That means when the job is done the integrator should walk out with a check. "That's huge in terms of cash flow," says Corwin.

As far as getting paid more, Mariano says Cyclone typically charges about 30 percent more for retrofit labor than it does on its new-construction jobs. "It's a little more difficult. Your technician has to be a little sharper," he says.

Since the installations are more challenging, a key to maintaining the profit margin becomes good training. If his technician "knows exactly what he has to do," Mariano says Cyclone does retrofits in less than one day. "He'd spend five or six hours if it's a typical colonial; three to four hours in a ranch," he says, explaining that good training prevents wasted time.

Dubach agrees that the margins are higher with retrofits and cites dealing with homeowners versus builders as a major reason. "[Homeowners] place more of an emphasis on quality than price," he says. Other benefits of retrofits, he notes, include not having to deal with change orders as often and usually not having to make multiple trips.

Dealing with homeowners also allows integrators to present upgrades directly. Selling central vac upgrades, says Corwin, is as simple as "putting yourself in the place of the homeowner and thinking about how you would want to use the system."

Most up-sell items, according to Dubach, have margins of over 50 percent and require no additional installation. Some upgrade opportunities include:

Vacuum pan. An automatic dust pan, of sorts, this allows homeowners to quickly sweep up rather than fire up the vacuum. It's usually installed in kitchens. "These are harder to install into existing homes. We charge $150 to $200. This is a popular item," says Dubach.

Quietness. Clients can upgrade to a unit with an engine that makes less noise. "For example," says Mariano. "Beam has a standard unit and a serenity unit. You can up-sell the customer on quietness."

Garage accessories. Tool sets specifically designed for heavy-duty garage cleaning are popular.

Extra attachments. Homeowners won't want to lug attachments from floor to floor, so any client with a multilevel home is a candidate for extra attachments.

More power. Just as retailers can up-sell customers to more powerful portable vacuum cleaners, integrators can offer up central vac units with more sucking power.

Extra units. This isn't really an upgrade opportunity, but integrators should be aware that some homes that are extremely challenging to retrofit are candidates for multiple power units. That way, the installer will have to run less tubing. An extra unit can mean an extra $600, according to Corwin.

Hose hiding. "One of the biggest issues clients have with central vac systems is ‘where do we put the hose?'" says Mariano. H-P Products recently got the rights to distribute the Hide-A-Hose Retractable Hose System with its Vacuflo brand. "We've sold a lot of them already," adds Mariano.

Other tech categories. Eighty percent of central vac clients are satisfied with the technology, according to Runyan. "That's the highest I know of for any product." That satisfaction provides tremendous leverage once integrators have their foot in clients' doors, he says, allowing integrators to present their full spectrums of installation offerings to clients. "You really don't get to meet with the end consumer when you are doing new construction," he adds.

Sizing Up the Market

Customer demand for retrofit central vac installations is on the rise, says Mariano. One reason he cites is that consumers seem to be realizing the health benefits of the technology, including reduction of airborne allergens and general maintenance of air quality.

They're also realizing that it's even possible to add central vacs to their current homes. Mariano sees evidence of this while exhibiting at home shows. He just attended one show at which he "was blown away" by how many homeowners asked about central vac. "We sold 22 central vac systems that weekend and a majority of them were retrofits," he says.

Even if the market isn't growing, as Mariano perceives it to be, it doesn't appear likely to drop. "I would say it's steady," says Corwin, "and it has been from the time we started the business in 1979."

Actually, it's both steady and growing, says Calderone. "I anticipate that the retrofit central vac market will be a good one for integrators, as it has been steadily increasing over the past few years," he says.

It helps that there isn't a lot of competition. When offering central vac, integrators don't have to compete against big-box retailers like they do with audio, video and control products, points out Runyan.

Mariano says the only real competition that integrators have when selling central vac is the portable vacuum market, and he doesn't deem that to be significant. "The portable industry has really declined," he says. "The quality of the machines isn't the same as it was 30 years ago."

Runyan, who works for Beam which also makes portable units, doesn't agree. "In terms of air quality, though, portables leak and central vacs do not," he says, pointing out a fundamental difference. However, he says the bigger competition comes from other technologies homeowners can invest in for their homes, joking that the Jacuzzi is central vac's top competition. "Our problem as an industry is really consumer awareness."

Mariano agrees, adding that he wants the central vac industry to invest in a campaign to raise awareness among consumers of the possibility to retrofit homes for central vac. "We have a great opportunity because the portable industry isn't there," he says. "If these guys [industry leaders] would step up to the plate, it would explode."

An awareness campaign might also lead more integrators to get involved with retrofits. Right now those who are offering retrofits are enjoying very little competition from area installers. For integrators like A-Tech, Cyclone and Swiss Boy, the lack of competition allows them to maintain healthy margins. Still, Corwin, Mariano and Dubach recommend that integrators think about adding retrofit central vac to their arsenals. It's good for the industry because it builds awareness and creates satisfied integration clients, they all say.

"Central vac is hands down the one [product category] that customers love a year after they get it," says Corwin. "If I can put something in somebody's home that they will appreciate one, two or five years later, I have a better shot of getting referral business from them."

When it comes to integrators deciding to do retrofit installations of central vac, according to Runyan, it's just plain logical. "The name of the game for a dealer is it's profitable for them," he says. "Central vac doesn't have the issues other product categories have where margins are declining. It's a very stable, good growth opportunity for dealers."