How Market-Based Pricing Boosts OEM Profits
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. Shifting from Cost-Plus to Market-Based Pricing 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: Price Misalignment 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 ba...