4 ms·
Don't assume that the retail price of a replacement part is the BOM cost used by the manufacturer. It's likely integer multiples (if not an entire order of magn
by HeyLaughingBoy 6y ago
Don't assume that the retail price of a replacement part is the BOM cost used by the manufacturer. It's likely integer multiples (if not an entire order of magnitude) higher.
e.g., the replacement cost of a control board in my furnace is around $800, IIRC. I could probably build it for about $30 in parts (ignoring the software in the microcontroller). However, to someone who's evaluating buying a new furnace vs. repair, that $800 is a hell of a lot cheaper than a new furnace.
- extrapickles 6y agoThe control board for my furnace is ~$150 (gas/condensing). $800 sounds like that includes labor of installation since they are somewhat annoying to replace as you practically need to take half the furnace apart to do so.
- bluGill 6y agoWhen you buy a replacement you are paying for their entire replacement parts chain. Try buying a replacement part for a 10year old computer, if you can it will be more than a new computer.
- hippich 6y agoThat makes sense, but then why the same market dynamic does not work between retail sales and car parts makers? If the end customer is ready to pay 10x for the part, yet the maker of that part struggles to keep costs down - something weird is going on.