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When to institute Service Part Pricing

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trobinson@mappinc.com
Posts: 13
Joined: Mon Aug 26, 2019 3:20 pm

When to institute Service Part Pricing

Post by trobinson@mappinc.com » Tue Jun 23, 2020 5:08 pm

Hello,

We recently received a request for information:

"I am trying to develop an internal standard at what percentage drop in EAU should trigger a change in pricing from a production part price to a service part price? Is there an industry standard?"

Joseph Coatter
JACO Manufacturing Company
joe.coatter@jacomfg.com

Please respond to this forum post or reach out to Joseph directly if you have any insights here!

trobinson@mappinc.com
Posts: 13
Joined: Mon Aug 26, 2019 3:20 pm

Re: When to institute Service Part Pricing

Post by trobinson@mappinc.com » Tue Jun 23, 2020 5:09 pm

Approximately 30% of our business is considered "service" to our customers. To be honest, we don't typically set that volume. When they no longer use items in producing new products, they consider them service. Sometimes we run 10,000 pieces a year, sometimes 50.

We have some proprietary parts in which we don't run many as well. We try to keep a min/max on those so we run at least a shift worth of inventory and keep it for no longer than 6 months. If longer than that or the run time is shorter, we need to adjust the price accordingly.

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