Spare Part Pricing for OEMs: Insight 8 – The Pricing Toolbox

Pricing Insight 8/10: The Pricing Toolbox 🧰

Not all spare parts should be priced the same way. And not all pricing methods fit every company.

After covering seven different pricing approaches in this series, one thing becomes clear:
There is no universal pricing method. There is only the right method for the right situation. Here’s a recap of the pricing methods covered so far:

1️⃣ Basic cost-plus pricing
2️⃣ Differentiated cost-plus pricing
3️⃣ Consistency-based pricing
4️⃣ Market-based pricing
5️⃣ Replace-or-repair pricing
6️⃣ Value-based pricing
7️⃣ Lifecycle-based pricing

In practice, most companies will use only a few methods for the majority of their portfolio, while others apply to a limited number of specific parts or situations.

Think of these methods as a toolbox. Some situations just require a simple screwdriver. Others call for advanced power tools. Both have their place — and pricing is no different.

Choosing the right pricing method affects more than margins, volumes and customer satisfaction. It also determines:

✓ Effort required for implementation
✓ Complexity of governance and maintenance
✓ Long-term sustainability of the pricing model
Get the balance between effort and reward wrong, and even a good pricing initiative risks becoming an unbearable burden.

If you understand the reasoning behind Insights 1–7, you now have a universal toolbox.

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💬 Which pricing method creates the most discussion in your organization? Let’s discuss at https://www.linkedin.com/in/berntgunnarson/

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