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Page 2 of 2 Business Practice PBX is competitive; a buyer’s market prevails, complete with manufacturer’s specials, discounts and giveaways. Buyers can expect good deals compared to PBX list prices, but need to pay close attention to proposals that seem too good. For example, if a seller offers a 20 percent discount off the price of a $100,000 PBX, a buyer might expect to pay $80,000 but the vendor may respond the discount is only $7,000. The seller may have discounted 20 percent from the costs of the system (in this example, $35,000 X .2 = $7,000). Almost no business can afford to discount its labor costs. The seller might explain the costs of wiring cannot be discounted because they use a subcontractor and have to pay for the installation. The wiring costs are set at $35,000 which may include some markup, but nothing like the retail markup on a piece of hardware manufactured offshore: Item | Price | Costs of hardware, software, training, telephone sets, and interfaces with installation | $35,000 | Costs of wiring and installation | $35,000 | Markup and profit | $30,000 | Total | $100,000 | Central Office Centrex Centrex is an alternative to on-site PBX telephone hardware. The Incumbent Local Exchange Carrier (ILEC), local cable operators, and CLECs offer Centrex. Centrex providers offer “virtual” PBX services, run by their own centralized switching, at a price extremely competitive compared with the hardware and maintenance costs incurred from PBX ownership. Often, the CLECs have service offerings not offered by the ILEC, benefiting the consumer. Centrex is usually rented on a monthly, fee-for-line basis. Costs per line can rage from $20 to $25 a month, with volume pricing and long-term contracts achieving better rates. Peripheral Devices There is also a significant market for post-installation peripheral devices and services for owners or users of PBX and Centrex products. Comprised of items as simple as an external bell to complex and sophisticated electronic management tools, it is a constantly expanding market. Well-known products include, but in no way are limited to: - Automatic call distribution
- Voice Mail
- Automated attendant
- Call detail recording
- Modem pools
- Multiplexers
- Headsets
- Display sets (telephones)
- Paging systems
- Least cost call routing
- Network management systems
- Design tools
- Answering machines
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