How We Help, at a Glance

  • Analyse current pricing and discount structures
  • Consolidating and verifying parts data as needed (costs, revisions, categorizations, units and more)
  • Match with best practices
  • Benchmark against competitors
  • Interview stakeholders, including customers, dealerships, and partners
  • Propose a revised strategy, if necessary
  • Assist with or lead implementation and training for stakeholders
  • Follow up and fine-tune as needed
  • Prepare you for potential pricing software implementation

How We Help, A Deeper Dive

Pricing spare parts is easy. Pricing them correctly is hard. Let us share our experience with you.

Spare part sales often significantly impact a company’s profitability, particularly for OEMs with complex products. Pricing strategy and methodology also affect customer satisfaction and several other areas critical to a company’s market success. It can also impact internal efficiency and costs. Yet, we often see that efforts spent on pricing are minimal or, at best, moderate.

Why? Perhaps because pricing is often hard work and the result difficult to measure. It may be outside the comfort zone of the aftermarket management. Additionally, there’s no universal solution or magic software that can do the job alone.

Solution? We at Naviro Consulting have the experience and methodology needed to get you started. Even a small effort is much better than none. Our degree of involvement is always tailored to your specific needs. We can even improve your pricing gradually, guided by an effort-versus-effect analysis and the resources and time available. Our goal is always to provide you with a customized pricing methodology that you can manage independently once our job is done. It will be neither too complex nor too simple for you. We simply call it Adaptive Parts Pricing.

Parts Pricing, time to level up!

Spare parts pricing involves more than just finding the “sweet spot” where prices are reasonable and profits are satisfactory. Your pricing strategy impacts several key areas, including:

  • Total Cost of Operation (TCO)
  • Customer retention (for parts and new products)
  • Inventory turnover and costs
  • Sales of related parts and services
  • Opportunities for retrofits and upgrades
  • Branding opportunities
  • Share of slow-moving inventory
  • Product uptime (cost of preventive and predictive maintenance)
  • Order handling and logistics costs
  • Pricing credibility
  • Influencing product lifecycles (repair, update, replace)
  • Company and product image/market positioning
  • Risk of attracting competitors
  • Claims related to incomplete replacements or inferior parts

So, how do you price parts effectively? There are various approaches, ranging from simple to complex, and the method may vary for each part. Common pricing strategies include:

  • Fixed mark-up pricing
  • Differentiated mark-up pricing
  • Consistency-based pricing
  • Competitor-based pricing
  • Alternative cost-based pricing
  • Value-based pricing

What’s applicable to your business? We can help you determine which methods suit your unique needs. Our approach is structured, yet adaptable to your specific situation. A solid pricing strategy and understanding is a key to success, no matter if a pricing software is used or not.

Pricing of spare parts
Value versus price balance