Elevator secrets mean more than you think, if you are in the process of buying an elevator for a building project. You need help! But despite pushing the help button none is to be found because there are dozens of dirty little elevator secrets the major elevator companies don’t want you to know about.
That should be no surprise, after all the elevator industry is more cloaked in darkness than the Illuminati or the New World Order. They tend to hide what they do and lurk in the fog regarding important items like: costs, timelines and motives. So, in this blog post I will shine some light on just two of the biggest elevator secrets. You will also be given tips on how to shed some much needed light yourself on an industry that desperately needs it.
But first, why do they hide the information? Let me tell you, it is not an evil plot devised by a cat stroking Bond villain. It is a more mundane motive. Money. If you, the consumer, are not given clear factual information, the likelihood is you will make poor decisions regarding vertical transportation. Also, you will become more reliant on the elevator company itself for the limited facts that are available. So your decisions will be made with few and skewed facts and that will ensure you bleed money and they get richer. The result is overall lifetime cost of an elevator becomes much higher than advertised. So let’s get started with just two elevator secrets.
The first of many elevator secrets is the real profit for the major elevator companies is based on keeping you under their thumb regarding a maintenance contract. Otis in a recent SEC filings said, “New Equipment and Service, which, for the year ended December 31, 2019, contributed 43 percent and 57 percent of our net sales, and 20 percent and 80 percent of our total segment operating profit, respectively.”
Did you get that? That means is that new equipment or elevator sales while important is no where near as profitable as the maintenance. And to keep the money rolling in, unknowing customers are being pushed into making decisions that increases the profit of the elevator company through the maintenance contract not the elevator itself. How do they do this?
The vast majority of people that ride in an elevator don’t give it a second thought. The doors opens, they walk in, push a button and go up. They do not care about the mechanical means of conveyance at all. But, selling up to a different type of elevator conveyance can make a bigger profit for elevator companies through the maintenance agreement. So…they push specific elevator types that increase the maintenance contract price. This is despite most riders or building owners not caring a wit about how they get from point A to point B.
So, when I personally speak to people that are being oversold on the type of conveyance it makes me a little steamed. Let me be blunt. If you are being sold a traction elevator (the kind with ropes) for a low-rise application you are most likely being oversold and more than likely being taken advantage of.
Why? Because the long-term maintenance contract for a 3-stop hydraulic elevator is around $200 per month (depending on where and other factors). For a 3-stop traction it can be $600 or more per month (depending on where and other factors). Need more convincing? Do the math. The lifespan of a typical elevator is 20 years (240 months). With hydraulic maintenance cost around $200 a month, that is $48,000 over the lifespan of the elevator. A traction elevator on the other hand, at $600 a month is approximately $144,000 over the lifetime.
Now you know why they upsell unwitting customers on traction when often it is not needed. They will even discount the initial sales price on traction units to make less upfront as a way to garner longer, more profitable returns. A real quick note, hydraulic elevators are not inferior just less expensive to maintain. Also, this is not a screed against traction units. Sometimes they are needed. We just honestly assess your project and make recommendations rather than selling you up to something you don’t need.
But that is not the end of the elevator secrets and profit motives. When the light bulb goes off and you realize you have been duped into overpaying and try to get out of the contract so you can competitively shop it, you can’t. That is because part of that cheap up front price usually includes proprietary parts in the elevator system. In simple terms, proprietary parts makes it impossible for anyone (other than the elevator company you bought it from) to maintain it. You are stuck. The elevator with proprietary parts requires special tools programmed for your specific elevator. There is no advantage to these tools at all they are just the keys to a prison you cannot escape from.
There are also lots of other contractual tricks of the trade to keep you locked in as well; like auto-renewals. Auto renewals are common place with almost everything now-a-days. Phone service to online entertainment auto-renews all the time. But elevator maintenance contracts often auto-renew with an annual increase built in and if you miss the tiny renewal window, you can’t get out. The contracts are often multi-year (usually 5 years) and are very lopsided in exclusions and other factors.
The second of the dirty little elevator secrets is the major elevator companies don’t really manufacture elevators at all, at least not in the way we generally think of manufacturing. They do produce some components, but in real terms they are bundlers of other companies parts and pieces. They crate them, ship them and screw them together on site, but the elevator is not manufactured at all, and the parts they actually make are limited. Believe it or not elevator companies have admitted that the real “manufacturing” takes place at the jobsite.
Think about it this way, if General Motors only crated up parts and dropped them off at your front door, you would not consider them to be a manufacturer. That would be a preposterous notion. Then in cold or heat, rain or snow, a mechanic would meander to your house at their leisure and cobble all those parts together in a process that takes months in your driveway. You would laugh out loud if cars were “manufactured” that way. Yet that is what is done regarding elevators.
This truth reveals a couple of realities. The elevators they sell are screwed together with very little supervision, inspection or quality control in dark and cramped environs and in all sorts of challenging conditions. Also, the safety and quality of the elevators rests in a single inspection at the end of the process when they are either given a green light or a punch list of code violations to fix. If that one inspector, in one visit misses something, they just do. Also, the code inspector is not necessarily looking for fit and finish, just functionality and code compliance.
Because traditional elevator companies just really gather elevator components from others, then anyone can buy those components and provide a better, truly manufactured solution. That’s what happens with a modular elevator. We purchase the same or comparable parts, and actually manufacture an elevator in a factory. It is much faster, greener and safer.
Inside a modular unit you will find the same parts because there are precious few elevator component producers. Where different parts are used, due to the level of regulation in the elevator industry, they are all high-quality. All must pass muster of regulating agencies and the elevator code. We just produce the product in a much better and smarter way.
What ultimately makes the difference is that modular elevators are actually manufactured in an assembly process. They are not pieced together in less than optimal working conditions. Imagine that! They are inspected daily for fit and finish. They are always plumb and square because checking quality is as easy as walking the factory floor. The units are produced horizontally so inspections are routine and daily.
Also, because it is manufactured you decide when it arrives. It is then shipped and is placed on-site. This ends workplace interruptions and the elevator is no longer holding up other’s work. They free up work space and the elevator is off the project’s critical path.
The set is less than a half a day. The startup less than a week. And get this, the elevator can be used for construction in some cases! A better elevator because the process is better. Same quality components, manufactured smarter.
Below is an honest list of things to look out for on your next elevator purchase. However, it is a bit self-serving. We feel MEM is the best alternative for quality, safety and cost-effective vertical transportation. However, your decision must be made based on facts and below are some to consider. So, look over this info to avoid some of the dirty little elevator secrets and feel free to challenge us with questions about our process and products:
Finally, consult, challenge and discuss. Biased? We are. But not regarding the conveyance type. We will be honest and fair. On our factory floor you will find hydraulic elevators and even roped hydraulic units as well to meet your needs. Our bias is based upon modular being a better way to produce elevators, not the elevator itself. We will recommend what you need and price anything else you want or have speced in.
If you are curious and would like more information just click the button below. In 24 hours we can produce a thumbnail price for any project. Remember with us there are no secrets! Just straight forward talk from people that care about you and your project that are highly experienced in the elevator industry.