Appliance Parts Help And Information
Why Are Spare Parts So Expensive?
- Created: Friday, 10 February 2017 10:57
- Last Updated: Friday, 10 February 2017 10:57
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People will often be astonished at the price of some spare parts and it is true that very many are, we explain why
The first thing you learn, pretty quickly in the world of appliance spare parts and we’d imagine this holds true for most other things as well, is that fast moving, commonly used spares are generally pretty cheap all things considered.
Where the use is high enough and there’s compatible spare parts, also known as patterns spares or hijack parts, there will often be the genuine spare without the very expensive manufacturer packing and sticker available at a much, much lower price.
There’s a problem there though as there will often be really cheap compatibles as well and they can be, well, not so good. We avoid those, we let the people on Ebay etc sell those as they’re often garbage and we don’t need the hassles or complaints about them not fixing correctly or failing shortly after fitting.
Precision And Spare Parts
One thing we should point out (again) is that locating spare parts is a precise thing to do.
Images, often the numbers on the parts and most anything else will often prove useless in locating a spare part. There’s a way to do it and we urge people strongly not to rely solely on images as they will often be stock images, may be out of date and really will often not matter a jot.
What is vitally important is the model number etc that leads to a part number. With the part number there’s all sorts of things we can often do but, it’s just vital to get to that for most spare parts as we’ve explained in many articles.
If you get confused at all or are not absolutely sure, we always advise people to ask us for confirmation or assistance. That often saves errors that neither you nor we want.
Now, back to why parts are expensive.
One reason parts can be ludicrous prices is when manufacturers make limited runs of a product.
Let’s say that you have a ceramic hob and you are the maker of it, you buy in the hob top from Schott or Ceran as all do pretty much and as you know you’re going to make 10,000 machines you order 10,500 ceramic hob tops to allow for damages, warranty issues and some stock of it.
Because you ordered a big quantity let’s imagine you get a price of £100 per unit for round numbers.
Once that stock you have is exhausted and you go back to the supplier and ask for some more but, this time you only want say 50 units, what do you think happens to the price?
Of course, it ramps up massively as the supplier has to set up all the tooling with all the cost to do that just as they did to make over 10,000 units so the price gets hiked.
Again just for round figures to illustrate the point, if it cost £10,000 to set up for 10,000 units it’s £1 per unit made. If the cost to set up is still £10,000 but you only want 500 units then the cost jumps to £20 a unit, twenty times the price.
So the more “exclusive” the product is, the more expensive the more unique components are going to be. And this is all the more so as the machines are no longer in warranty and the initial stockholding is exhausted.
Manufacturers try to avoid this as much as they can of course but, with people wanting all manners of variations be that colour or functionality it is an unavoidable fact sadly.
What it also means is that, where it is no longer economically viable to lace a decent enough sized order for the part, they are made obsolete and this can be at a very early age. We’ve seen some parts being made obsolete at 18 months old, sometimes less.
And, you’ve no recourse if you get caught with that as we explain here, there’s no legislation on spare parts, it is the Wild West and makers can do what they like.
Supplier Went Bust
Another thing that happens and, we saw a number during or in the wake of the last financial crisis in 2008 is that suppliers can go under leaving the manufacturers in the lurch as it were.
Some will just obsolete the parts of course as there’s nothing to stop them from doing that and, where it’s low volume spare parts that seems logical from a cost perspective but if they need the parts they’ve then got to scrabble about looking for another supplier.
That takes time. Often months.
By the time they get a sample, make the mods of tolling and get stuff made it’s a painful, costly and lengthy process so if brands can avoid that, guess what.. yep, they will.
Cost, Cost , Cost
Th thing about spare parts as we often say is, they’re worthless unless you can sell them or you need them.
People don’t wake up and think, “Oh I must go buy a new pump for my washing machine, I need the latest one with the new housing on it” or the same with most any other spare part.
People only look for spare parts to replace a busted bit. Maybe some cosmetic stuff if it looks a bit grubby or the odd oven door seal as it’s a bit off, warped or whatever but, generally unless there’s a problem people would never think about it. And that’s absolutely fine.
What it means though is that the market for spare parts is driven by necessity and nothing else, manufacturers or brands need to hold parts for warranty failures and owner need parts when something breaks.
In turn that logically leads to, nobody is sat with masses of stock. Nobody.
Every single spares supplier keeps what they need, no more and no less.
The primary reason being of course, cost. It costs money to buy the stock in that could sit there, well, forever really if nobody needs it and all the time it’s sat there it’s taking up space and, space costs money as well.
So you see the cost of hoarding parts outweighs not doing so therefore, nobody does it and where they do, they will often charge a lot for the service which leads to, expensive spare parts yet again.
Just In Time
A huge number of spare parts and, keep in mind that there are quite literally tens of thousands of lines, are served with just in time ordering.
Although this industry is more than a little out of date on this score you can see the same thing in the likes of the car industry where parts are not held almost at all, they’re shipped in from massive hubs and sometimes wishing hours of being required.
That’s fine for cars, they’re worth considerably more than your common everyday kitchen appliance.
For appliances which are, in the grand scheme of things, very low value items spare parts are shipped on consignment, more often than not the cheapest (read slowest) way possible with little to no tracking info. It’s really not very good.
But then, you need to consider the costs, most spare parts are less than £30 in value. Shipping alone for an item from outside the country it’s needed in on a courier can cost more than that. We’ve seen instances where the part has cost £40 or so and the shipping from Italy about £75, most people wouldn’t even consider that to be remotely reasonable.
Just in time ordering is used in the appliance industry but, it is limited and we guess some of that depends on your definition of “just in time”.
Getting Around The Problems
What we’ve seen in recent years is a shift in the main spares suppliers to trade supplying items direct to the public and, that might sound great but that brings other problems.
For a start they tend to be more expensive, go figure.
But a bigger issue is that they are limited to their own supply chains. So they will only order a spare part from the manufacturer at whatever that costs or use what they have on the shelf, they won’t go looking at other trade suppliers.
For you, the customer that’s a pretty raw deal as it’s not giving you a lot of options really.
What we do is look across multiple suppliers, usually including the manufacturer directly to get the broadest pool of resources that we can.
Why is that a good thing?
Well it lets us price compare across suppliers, see who has stock and where, what alternatives theres are and compatibles available so we can often get stuff faster and cheaper than many of the big names because unlike most, we’re totally independent and not under anyone’s control.
This allows us to seek out the best deal we can for our customers. To us, that’s a good thing.
We can’t always win of course, sometimes the circumstances as we explain here and in other articles means that it’s the end of the road of there’s no alternative but, we win more than we lose.