Spare Part Pricing for OEMs: Insight 7 – Lifecycle-Based Pricing

Spare Part Pricing Insight #7 – Think in Lifecycles 🔄

A brand-new machine and a 15-year-old one don’t have the same value to your customer. So why do they have the same parts prices? For OEMs selling aftermarket parts, a lifecycle perspective isn’t optional — it’s essential. The competitive and commercial landscape at end-of-life looks nothing like launch day.

Two dimensions that shift over time:

Competition changes as the product ages

Competitive pressure isn’t constant — it follows a pattern:

Introduction: Few alternatives exist. Pricing power is high.
Growth & maturity: Volumes rise, third-party (“pirate”) suppliers enter, and price pressure builds.
Fade-out & end-of-life: The installed base shrinks. Some competitors exit — but customers become more price-sensitive as aging assets get harder to justify.

If you compete against alternative suppliers, your pricing needs to evolve as they do.

Customer willingness to pay changes as equipment ages

When machinery is modern and productive, customers accept higher parts prices. As assets age, get written off, and better alternatives emerge, the willingness to invest declines. At that stage, you have real choices:

Reduce margin to sustain parts revenue
Use pricing strategically to encourage equipment replacement
Offer trade-in or upgrade paths to retain the customer relationship

None of these should happen by accident.

A practical tool: lifecycle adjustment factors

Start with a base price, then apply multipliers — up or down — based on lifecycle phase, application, or market segment. This approach works best for OEM-specific parts where you have pricing latitude. For standard components, the market sets the price regardless.

The bottom line:

Competition changes. Customer value changes. Willingness to pay changes.

Your pricing should change with it — deliberately, not by default.

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You’re of course also welcome to contact us at bernt@naviro.se or call +46-70 6888288.