How Market-Based Pricing Boosts OEM Profits

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HOW MARKET-BASED PRICING BOOSTS OEM PROFITS
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The business landscape is becoming more
competitive every day, and to cater to this
challenge, OEMs must step up to bring new
strategies to enhance their profitability. In a
traditional setup, OEMs relied mostly on
cost-plus pricing methods. But, as the times have
changed, OEMs need to be increasingly dynamic to
have a flexible approach towards pricing
structures. Thus, the epc catalog and e-parts
catalog are needed which is emerging as a
powerful tool for OEMs to optimize their
profitability and have a competitive edge.
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This did not reflect the actual market demand for
the product or the value that was placed on the
product. It meant that there were chances the
products were overpriced or underpriced, both of
which are bad for profitability.
Traditionally, OEMs pricing was defined by
adding a pre-calculated profit margin on the
production costs. Being a straightforward
approach, this pricing mechanism brings its own
set of limitations
This pricing structure was less responsive
compared to the epc catalog and e-parts catalog
pricing as it relied solely on production costs.
This pricing method did not account for the value
added to the product or the value it provides to
consumers. A product that is uniquely designed
may attract a higher cost in the market.ectetur
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ut labore et dolore
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