What is the profit margin on landscape lighting?

25 Mar.,2024

 

If you’re looking for an additional service to offer clients that complements your design/build projects, consider landscape lighting. Lotus Gardenscapes, based in Dexter, Michigan, started providing low-voltage lighting early on at the request of their customers. Traven Pelletier, owner and designer of Lotus Gardenscapes, says in the last two years landscape lighting has become more common along with the outdoor room concept. He says as these projects become more complex and high-end, these installations typically include lighting.

Gardens of Babylon Landscapes, based in Nashville, Tennessee, has been offering landscape lighting for 10 years now.

“It was a natural progression for us as our company and clientele grew,” says Tim Nebel, operations manager for irrigation, lighting & audio for Gardens of Babylon. “Lighting helps to extend the time our clients are able to enjoy their outdoor space and offers an element of safety in the nighttime – it’s a perfect fit for us as we help to create outdoor living spaces that can be enjoyed anytime, day or night!”

GreenPro, LLC, based in Jenks, Oklahoma, started offering landscape lighting six years ago

“It’s a great add-on for us,” says Dakota Williams, co-owner of GreenPro. “It’s easy to do while we’re out on the job site. Ultimately, it enhances what we do in the evening time. People enjoy their landscapes and outdoor spaces during the daytime, but if we can extend the depth of the property and make it more secure during the evening that’s just a plus.”

Nebel and Williams say they’ve noticed an increased demand for landscape lighting.

“I think just the whole staycation thing, everything outdoors is blowing up and more people are wanting to extend their time outside,” Williams says. “That’s what lightning does. It extends the time outside you’re able to not only see but you can go outside and sit and have a glass of wine in the evening, and then not just be sitting in the dark, or just on the back patio. You can enjoy that ambient lighting all the way to the edge of the property.”

Pitching Clients and Profit Margins

Photo: GreenPro, LLC

Thanks to landscape lighting’s popularity and practical aspects, it’s often not too hard to sell to clients.

Nebel says they provide information for outdoor lighting with all of their sales pitches.

“We provide information about our landscape packages with every landscaping consultation but typically customers know they want lighting from the beginning of the project,” Nebel says.

Williams says they include lighting in every landscape they do. He calls it their teaser set where they install five to seven lights as part of their package and he says customers always add more after they see it.

Pelletier says lighting isn’t a hard sell to clients as they’re often requesting it. Currently, they don’t list the lighting as a line item in their proposals, but Pelletier says he’d like to move to this.

“I think this year I’m going to encourage the team to include it as a base package,” Pelletier says.

As for the profit margins for landscape lighting, Williams says it is awesome, ranging from 50 to 85 percent.

“Use it as a high-profit addition,” Pelletier says. “You can mark it up significantly and generally the install times are pretty short.”

Landscape Lighting Design Concepts

While landscape lighting is not too difficult to sell, it does come with the challenge of having to be installed during the day but the full effect can only be seen at night.

Photo: Lotus Gardenscapes

“It definitely can be a challenge but to alleviate this issue, we provide our clients with a free 48-hour lighting demo so they will have the time to feel the full effect of what an outdoor lighting package will look like at their home before they purchase it,” Nebel says. “We install lighting anytime and will make adjustments as needed, particularly for uplights and floodlights.”

Williams says you cannot fully adjust the lights in the daytime and know that there are no hot spots in the system. Hot spots occur when you’re not washing or grazing properly.

“There are some tricks that you can use like you can use a green laser on the end of a light and shoot it,” Williams says. “That laser will show you where it’s going to project, but nothing beats going back out at dusk and fine-tuning those light fixtures just so you could avoid hot spots.”

Light color temperature is another aspect you have to consider. Pelletier says they tend to stick to warmer light colors for their designs. He says cooler lights can be used in more modern or more commercial settings, but he’s never had a client request cooler lights. Williams says the best light color temperature depends on what plant material or surface you’re lighting.

“For the more modern look, where you’ve got your light stones, we usually go with a 3,000 Kelvin,” Williams says. “When you’re doing more greenery plant material like your holly, your cypresses, you want to stick to 2,700 K because it’s a warmer temperature or if you’re lighting a brick surface or something with red.”

There are numerous lighting techniques, but the site will determine if some are possible.

“If you’ve got a water feature and you light through it, you can get some pretty amazing dramatic ripple effects on the hardscape at night,” Pelletier says.

Some of Williams’ preferred landscape lighting techniques are moonlighting and hanging lanterns from trees.

“Moonlighting is absolutely amazing,” Williams says. “It’s hard to do properly because if you’re not 20 to 30 feet in the tree moonlighting down then you’re actually blinding people because that light can be so bright.”

Photo: GreenPro, LLC

Williams encourages landscapers to get creative with the lighting design and figure out how to illuminate a space without having a downlight create a hot spot.

“One of the biggest mistakes I see with lighting design is path lights and I was there with my company in beginning,” Williams says. “We would throw in a billion path lights. Every five feet there’d be a path light, and it literally just looked like an airport in those front yards.”

Best Practices

If you’re installing landscape lighting in an existing landscape, Pelletier says it’s fairly low-impact so there’s typically not an issue with damaging the space. Williams says it comes down to where the trenches are going and how you’re trenching.

“We like to do a garden refresh, if you will,” Williams says. “If we’re doing their beds, then we’ll pull out the mulch. We’ll start from scratch. Hopefully, they don’t have annuals and sometimes they do so we just have to work behind them. It’s just being very careful.”

Williams encourages other landscapers to get with the manufacturer to learn how to install the lights properly to avoid callbacks. He says most callbacks are going to be caused by connections and how you laid the wire. Pelletier suggests trying a small install at your own house to get a feel for the work.

Williams says some of the common mistakes that occur when installing landscape lighting include putting wires directly in the ground, not in a conduit, and using indoor wire nuts.

Photo: GreenPro, LLC

“I’ve seen electrical tape, I’ve seen them not even use any kind of tape and they just twist the wires together,” Williams says. “Voltage drop doesn’t happen as much with LED lights but I still see it occasionally where they have run from a transformer that’s too far out and they’ve got too many lines pulling off that one run so their lights are not all the same luminance.”

One main mistake Pelletier says to avoid is buying low-budget products at Lowe’s or Home Depot because they do not last. He advises buying a quality product that has a warranty.

“Use quality products and don’t cut corners on the installation, especially when it comes to your wiring connections!” Nebel says. “Be open to visiting your clients at night so you can fine-tune the placements in a way that you couldn’t do during the day.”

“Look at it as a real opportunity to enhance your designs and make the landscape really pop,” Pelletier says. “It can make a huge difference in a good design, to see it with that light at night. I would also say have a good photographer and get some photography of your best projects done with the lighting on at night because it’s just such a dramatic effect. For a marketing tool, it’s a great addition to have those pictures in your portfolio or on your website.”

This article was published in the May/June issue of the magazine. To read more stories from The Landscape Professional magazine, click here to subscribe to the digital edition.

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When a custom installation company has been in business for 41 years, it’s rare to find a new product category that it hasn’t already explored. But that is exactly what happened at Audio Video Systems (AVS) when the Plainview, N.Y.-based company was introduced to landscape lighting four years ago.

Audio Video Systems is one of the largest custom installation companies in the U.S., reporting $20.8 million in revenue in 2018, enough to make AVS the No. 7 company in the CE Pro 100.

Tied in closely with leading architects, the company serves the New York City market, from Manhattan to sprawling mansions in the Hamptons, with fully integrated systems featuring audio, video, networking, control and security.

“We have always been asked by the landscape architect or electrician to tie in landscape lights as part of the whole-house control system, but it was the last thing we would have ever thought of us doing,” admits Alan Shupack, sales manager/project manager at AVS.

“When you show it to a customer, it is a no-brainer. Coastal Source has the best landscape lights anyone has ever seen.”

— Alan Shupack, Audio Video Systems

Shupack, who has been involved in consumer electronics since the late 1970s, says AVS was looking for something to replace the falling margins in control and interfaces when a local rep introduced them to landscape lighting from Coastal Source about four years ago.

Jon Bowman, national sales director at Coastal Source, says profitability is one of the key reasons integrators are drawn to the product line.

“Profitable items have been eroding over time in certain categories for integrators. They’re looking to get into product categories that allow them to regain that lost profit margin. A number of integration companies are already doing projects outdoors and landscape lighting is just a natural progression. The Coastal Source system is a profitable segment, and many integrators are seeing great success with it,” he says.

Shupack recalls, “As a new product category that we had never been involved with before, what stood out most to us was the product quality. This was the best we had ever seen. If we were going to get involved in something we had never done before, having a product that is really exceptional and unique helps how we approach the business. When you show it to a customer, it is a no-brainer. Coastal Source has the best landscape lights anyone has ever seen.”

Coastal Source’s bullet, wash and path lights are made of solid brass with simple Plug+Play connectors. The connectors are gold-plated IP68 submersible with five layers of protection. It uses 12-gauge direct-burial copper cable that is marine tinned so if a cable is nicked, it prevents corrosion from spreading throughout the cable, according to Bowman.

Franco D’Ascanio, Coastal Source president, notes, “Typical landscape lighting cable is zip cord made of two parallel cables varying in gauge from 16 to 12. We use heavier gauge wire in one jacket so we get less voltage drop, then we tin plate it.” 

Getting Engaged Early

To become a go-to source for landscape lighting, there were several hurdles AVS had to overcome.

First was getting educated in the category. Coastal Source requires integrators attend a multi-day intensive certification and training program at its R&D facility in the Florida Keys or at its northern New Jersey Experience Center.

The company also offers a design service for integrators with a seven- to 10-day turnaround for lighting design on complex projects based on blueprints, AVS also realized it had to actively introduce the concept of outdoor lighting early in the conversation with the designer, architect and homeowner, because the custom installation company is not typically the contractor asked about landscape lights.

“We need them to consider us as the ones to provide the landscape lights. The No. 1 challenge with this category is getting ourselves in the conversation at the right time to introduce landscape lights.

“We have to really get out there and push it to get their attention. Typically, landscape architects are the ones who spec landscape lights, so everyone, including the architect and the clients, assumes they are going to be the contractor,” says Shupack.

Related: Coastal Source Scales Up High-End Outdoor Audio, Lighting Lines

Bowman believes one key to success for any integrator is to designate a product champion inside the company, such as AVS did with Shupack.

“Having somebody that can understand the design, sales, estimating, and know how to navigate our website and all the resources there is valuable. If you can find somebody on your team that can absorb all that and then help others, it has proven to be successful,” says Bowman.

D’Ascanio adds, “Getting in upfront is critical. If you come into a project late, the odds are that change orders from other contractors on the job have mounted and the price has skyrocketed, so it’s a lot harder to get a sizable product addition.”

Working With Electricians

Another obstacle AVS had to overcome is figuring out how to not intrude on the electricians’ revenue. AVS works closely with electricians, who are given the lighting schedule from the architect and usually purchase the lights.

“Getting the electrician on board with us is a helpful tactic,” says Shupack.

When there are electricians involved with the landscape lighting, AVS partners with them by introducing the higher-end Coastal Source lighting to the client. Shupack says it is not uncommon for some of AVS’s larger projects in the Hamptons to have $75,000 in landscape lighting.

Sales Tactics Include Demo Kit

Whether it’s a rooftop garden in Manhattan or a large estate in the Hamptons, AVS is successfully selling outdoor lighting using various techniques, including bringing clients by homes of previous projects. But the best sales technique has been to use the Coastal Source demo kit.

The kit consists of 12 of Coastal Source’s most popular fixtures with the cables and transformer.

“If it is an existing home, we actually take a demo kit to the home. First, we let them hold the fixtures and explain what makes Coastal Source different and unique. Once a client gets their hands on the incredibly well-made products, the quality speaks for itself,” says Shupack.

Read Next: Sound Advice on Outdoor Installs from Coastal Source President Franco D’Ascanio

For the actual demo, AVS will isolate a specific tree that the client wants an uplight on, then leave the kit for a couple of nights so the customer can see what it looks like.

D’Ascanio says integrators report sales closing ratios “in the high 90 percentile” after using the kit.

Simplifying Installation Process

From an installation standpoint, Shupack says AVS has not encountered any problems. The company has three wire specialists on staff, but also uses electricians or outside contractors to run the wire.

— Franco D’Ascanio, Coastal Source

“We want to remove the bottleneck of installation. The system can be installed very quickly by someone who does not need a high level of skill.”

“The low-voltage cable specification for burial is 6 inches or less,” notes D’Ascanio. “We are not talking about digging really deep trenches. The code was written that way because the history of buried low-voltage cable is that the connections have been the weak link. That’s why we focus so importantly on solid connections.”

The only other unique installation situation AVS encounters is when lights need to be mounted in trees. In those cases, the company uses tree climbers or tree service companies with an aerial lift to suspend the lights.

“A lot of what integrators do is very technical and requires a fairly high level of expertise, if not an extreme level of expertise. And those complex installations can take a long time,” says D’Ascanio. “We’ve created a system built around Plug+Play cables. From the outlet to the final fixture and LED lamp, the system fits together very smoothly and reliably.”

He adds, “We want to remove the bottleneck of installation. The system can be installed very quickly by someone who does not need a high level of skill. Integrators can turn these jobs over quickly without bogging down the installation team. That has a major effect on profitability.”

What is the profit margin on landscape lighting?

Making Landscape Lighting a Profitable Revenue Source

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