No matter your time horizon, aftermarket parts pricing policies and management offers industrial original equipment manufacturers (OEMs) the maximum leverage to improve margins and profit.
For most OEMs, a significant piece of their total business comes from selling spare parts, wear parts, and consumables. Labor rates, contract prices, and other service costs are usually controlled and spent by the dealer network. For this reason, aftermarket parts pricing policies must be well thought out and approved by a team willing to challenge the person responsible for aftermarket pricing.
There are three variables when it comes to service pricing:
- Price – how much?
- Timing of changes – when?
- Discounts – who decides and why?
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Related article: Spare Parts Strategy: One of the Three Drivers of Service
About Middlesex Consulting
Middlesex Consulting is an experienced team of professionals with the primary goal of helping capital equipment companies create more value for their clients and stakeholders. Middlesex Consulting continues to provide superior solutions to meet the needs of its clients by focusing on our strengths in Services, Manufacturing, Customer Experience, and Engineering. If you want to learn more about how we can help your organization create or update your spare parts strategy, please contact us or check out some of our free articles and white papers here.
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