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Can anybody give me a idea of the profit margins in the Air Conditioner Spare Parts (Replacement Components) Market in UK/Germany/Europe?
For example by how much % does a company like Carrier/Mitsubishi/Samsung etc jack up the prices of its spare part (like compressor, coil) over its manufacturing cost.
I believe that the companies sell their new air conditioning units at a low margin. However, they charge a huge mark-up on the spare parts during the after-sales service.
Yep, 40-50%Quote:
Originally Posted by Smart1234
Why?
How much do you want to charge extra for your spare parts?
I don't want to charge anything extra, i am just curious to know the facts.Quote:
Originally Posted by Brian_UK
Correct me if am wrong
First the manufacturers sell the spare parts to the wholesalers like HRP at margin of about 15-20%.
Then the wholesalers mark-up the prices at least by 20-25%.
Why can't the spare parts get cheaper ? Why do companies need to charge so much extra ?
Storage costs
Air conditioning units like split systems or VRF systems indoor units & outdoor units will only be stored at wearhouse for the shortest possible time & any old stock can be discounted to move it after a few months of storage to keep storage cost at minimum.
Spare parts although smaller size have to be stored for much longer periods of time & the manufacturer has to provide spare parts by law so there is not much scope for reducing storage cost.
Most air conditioning contracors & large endusers demand next day delivery of spare parts & failure to comply will have a negative impact on the sales from these important customers.
Therefore the manufacturers & distributors can use spare part availabilty as sales tool but at the extra cost of storage.
Air con suppliers make next to nothing on kit, 12% mark up is usual, That may sound alot but when you consider storage, sales support, technical back-up etc the margin is all but gone. Spare parts are a way to claw back some profit, and remember suppliers are not regestered charities. 50-100% can be the norm.
Vendors/representatives/distributors holding grasp of spare parts are actual holders of sevices - we depend on them entirely. And consider yourself happy to have such ones - probably, even competing with each other in your big countries (India, UK, etc) - ready to sell you the wanted spare parts.
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