Their original cost for that part is miniscule. BUT! That's the cost of that part, being delivered to the assembly line, in bulk quantities, at a regular, predictable order cadence from the upstream supplier, over an unchanging delivery route, with minimal inventory kept on hand. Essentially, everything they can do to reduce the cost.
None of those things are true for a replacement part you order. It's an entirely different logistics chain, with entirely different costs.
The only reason that Miele spare parts are so fucking expensive is because they make a lot of money with service. They don't want people fixing their own machines for 20€, they want to have a Miele service person come and swap the part for 250€.
EDIT: And don't tell me that logistics for a heating element are hard. All Miele washers have been using the same heating element for 15 years or so, it's a drop in replacement for the previous version of the part, and it's probably also the single part that breaks most often. That part should be easy to stock and the cost to do so should be trivial.
But heating elements are very simple parts, and I bought it from a reputable local store, so I don't really worry that I'm getting an unsafe part. It's probably going to fail in a few years due to corrosion just like the original part (we have very hard water), and then I'll swap it again.
I am not sure if that is what you mean, but to me it sounds like they might have purposefully put there so that it works like a thermal fuse.
Also, the costs were not so absurdly high 20, 40 or 60 years ago!
Huge profit margin, but you're able to produce much more cheaply than a competitor. Some would say you earned that margin, and in a fair and open market if someone else can also produce them for $10 you'll see prices start falling quickly. If they can't, I don't see how it's a "scam" for you to make money in that scenario.
Again the same strawman. There is nothing "fair and open" in price gauging replacement parts in a market where buyers cannot compare quality, reliability, durability and TCO across products, replacement parts, repair services and guarantees.
How are you not saying that they're making too much money and it's therefore "a clear indication" that it's a scam?
I'd love to be told why I'm wrong rather than just "hurr durr strawman"
Selling replacement parts with an unreasonable markup is a form of bait and switch: the customer buys the product thinking that it will have a given TCO over its lifetime. Only after some time the customer learns that the TCO is much higher when a replacement is needed.
You twisted my words by claiming that making a profit is not a scam.
Just get a household appliances insurance policy.
I have some Miele kit, and I have an insurance policy.
If something breaks, I call the insurance company, get a code. Then I call Miele and book a service appointment using the code. As a result, I have never paid a thing to Miele, not parts, not labour. But I still get official Miele engineer and official Miele parts.
And for some of my older Miele kit (10+ years), they've been out a lot, because the insurance company still deems it more economical to repair than to get Miele to ship me a new one.
If the goal is convenience, then definitely. Home insurance policies are quite a lot more expensive than actual repair costs are likely to be. Which of course is expected, the product being sold is peace of mind and convenience -- both of which people happily pay a premium for.
Hahaha that's a good one... especially as we're talking about Miele here. ;-)
And you're factually wrong anyway.
I didn't say "home insurance", I said "household appliance insurance". Different thing, unless your home insurance happens to cover appliances.
My household appliances insurance is not expensive. It covers 5 appliances, unlimited call-outs, and you don't get screwed at renewal time if you've claimed on the insurance.
As I said, I've had Miele out A LOT over the years and I've never paid them a penny, and trust me on some of my older large appliances they've pretty much replaced 100% of the internal parts.
Either way, the insurance company will turn a profit from premiums. I'm glad this policy has paid off for you, but "reducing costs" is not a good reason to purchase insurance. Insurance reduces risk and makes expenses more predictable.
Put the two together - insurance and appliance servicing company = your described scenario.
e.g. I have a Samsung 970 EVO Plus SSD drive that has just failed, and lost some of my important data. Its got a 5 year warranty and is only a year old. I doubt I will bother to go through the warranty claims hassle, because the end result is not worth it.
I would have to send it back to Samsung, with my commercially important data on it locked in the chips, and get back another drive which it seems is not particularly trustworthy to rely on again. I've had 2/5 Samsung SSD drives fail and won't be using them for anything important again, I've just ordered a Hynix to replace it.
Another case, I have had a washing machine fail under warranty recently, again about 1 year into a 5 year warranty. It took 7 weeks and many frustrating phone calls before someone came around to actually fix it. Next time I won't bother to get a new washing machine, I will get a second hand one, and when it breaks I will get another second hand one immediately so I don't have the problem of not having a washing machine for sooo long.
My sister in law's oven failed with the self cleaning lock activated. It's an in-wall unit so the repair tech could only think to start cutting apart the wall. Instead, I took a hacksaw blade and painstakingly sawed off the lock. Since I was already committed, we then pulled out the unit and bypassed the failed thermal switch long enough to "unlock" the mechanism. That probably saved at least $1200...
Any insurance is a conflict of interest. The entity responsible for paying out is the same entity responsible for if/how much you get paid out. Any for-profit insurance company is incentivized to pay out as little as possible, if any. Any litigation is likely to cost way more than the payout.
* Except group catastrophic
Ultimately, it's a math problem that must have a positive answer for the insurance company. If 100% of policyholders make claims, you generally pay that profit yourself.
However, in group catastrophic policy, the numbers add up. Substantially <100% of people file claims, so premiums can be set much lower, effectively giving you protection against an unlikely scenario at reasonable cost.
My grandfather was an actuary, and constantly griped that low-deductible policies shouldn't even be called "insurance."
If you want to create something like a national health benefit, do so. But don't confuse people by mislabeling it.
This is not fundamentally different from low-deductible policies. (Which may do more, proportionately to cost, to improve predictability if most variance is the number of frequency of low-cost events)
Not necessarily. Simply holding onto large piles of other people's money can he profitable - eg banks.
What are you on about ?
Let me spell out how my appliances insurance policy works:
1. I call $insurance_company and say "my appliance is broken"
2. $insurance_company says "Ok, here's a code, call Miele, give them the code"
3. Miele sends out engineer with parts who fixes the appliance
4. I sign engineer's job sheet.
5. The end.
To reiterate: - At no point have I given Miele my credit card.
- At no point have I given the Miele engineer my credit card.
- At no point have I received a bill from Miele.
- At no point have I paid Miele in any way shape or form
- $insurance_company has taken care of everything, 100% of everything, every single time.Mine is about 350 a year, but they work out a rate per-appliance and then give a discount on the total, so you can pay more (or less) depending on how many appliances you cover.
> Are you positive this insurance, over the years, is cheaper than what you would have paid Miele directly?
Absolutely.
A Miele call-out will set you back 150 call-out + 100/hour, plus parts on top.
Or (if Miele agree) you can pay a "fixed-price" 300 which covers parts and labour (but again, this is subject to Miele's agreement and that agreement is given on a per call-out evaluation).
And as I said, one of my Miele appliances is 10+ years old, they've been back a good few times replacing increasingly major parts each time, so now the only thing 10+ years old about it is the external casing !
Even if I bought the "official" Miele parts myself, I value my time at greater than zero ! So its still cheaper than me buying the parts and spending a half a day pulling out appliances and fitting parts.
And given the price of new Miele appliances, its not exactly like after 5 years I could afford to replace everything with brand new appliances, since that would cost A LOT more than 350x5.
It sounds like you have a lemon appliance and were fortunate that you had the insurance.
I've had exactly one home appliance failure in the last 10 years - an old fridge that finally died.
The second category would be dishonest agents, which try to avoid payout and have windfall profits and basically skirt the line where lawsuits and reputational damage make that kind of profit impossible. Long term operation as such a business is challenging due to word of mouth, so they must often rebrand or change business names, or just make their products too confusing to understand.
I bought it for 20€ from a reputable local electronics parts dealer. The part I got for 20€ was a high quality 3rd party heating element compatible with Miele washers.
Other manufacturers manage to sell spare parts at more reasonable prices. I just checked a random washing machine from Siemens, and they sell the heating element for 28€. Not quite as affordable as the aftermarket part I got, and they'll probably charge 5-10€ for shipping, but it's a lot more reasonable than the Miele part.
If it was out of the very generous warranty, I expect it would cost loads.
Reminds me of the Planet Money multipart story where they made a tshirt, from scratch. Bought cotton from a farmer, shipped it to a textile industry, contacted a tshirt making company, shipped it to the US.
The bulk of the cost in the end came from transporting the tshirt from the harbor to the store where it was sold.
It's hard to think about physical reality when that's how most of your life is.
The reason that spare parts are so expensive has nothing to do with the cost of logistics or the scale of mass-production. The warehouse can simply order an extra pallet of parts and leave it on a rack as spares. Hell, this is probably what all of these businesses do.
The real reason the pump costs 100 pounds is because the customer has no reasonable alternative, so they will (begrudgingly) accept that before spending 400 pounds on a brand new machine.
If they found out the specific part number of the pump and ordered something compatible from an alternative supplier (I used to go to this effort when younger), it generally ends up costing around 1/5 of the price of an official one.
Note that being unable to profitably replicate the part does not necessarily mean that the part is naturally expensive, or that the OEM already sells it at a reasonable price. The part could just as well be hard to reverse engineer and QA for a third party, or the effort to do that might not be worth it given unknown level of demand, etc. OEM can actually have a natural price advantage over third parties in such complex parts.
If the part is only used say in a single model of dishwasher, there will never be enough demand to justify the creation of an aftermarket one.
Cars as an example, the key here is to allow the market to MAKE replacement parts, and compete to selling them. Stop vendor lock-in
If I want to buy replacement part for my car I often have a selection of 3-5 different vendors making the replacement in addition to the OEM.
You can not tell me that appliances, electronics, etc are that much different from cars that similar solutions can not be found. Especially given that most of these things are just off the shelf parts that the OEM combines into a product anyway
Getting a plastic wheel for my dishwasher's lower roller shelf is $12 from a third-party source (it's $16 from the manufacturer). It's like four grams of plastic. But the rarity of demand just doesn't make it make sense to keep in stock.
(That sort of thing has me halfway convinced to buy a 3D printer. I just don't have anywhere to put it yet.)
Hell even Paper has DRM now, see the Latest Dymo label printers
If the third party parts went through the same certification process, they would be more expensive than genuine parts.
I am not buting this reasoning - the assebly line costs money to run, worker's time and salaries need to be paid, quality control and warranty to be done. A part sold by itself needs none of those things.
While you are taling to me about how difficult logistics of a $200 part justifies a 500% markup, i can buy a $3 led from China with free shipping. This doesnt add up
> A part sold by itself needs none of those things.
A part sold by itself needs so many more things!
Where do you store it? How do you organize it there? How do you keep track of your inventory? How do you re-order new inventory? How much do you re-order? How long do you typically have to store? How do you source substitute suppliers when your original goes out of business? How do you QC stock? Etc. Etc.
All of that for multiples of the part count that goes into a single model, because you sell more than one model.
You can buy a $3 LED from China (see sibling comment for economics on free shipping) because you're buying the current model / whatever version they feel like giving you.
"Part specs may be subject to variation" doesn't work so well with more complex systems.
I am sorry but these questions come across as extremely silly - this is not rocket science, even manufacturers of beer have to figure out these things, if you can't manage a warehouse, you would not be able to be any kind of serious manufacturer in the first place.
Check warehouse rates or spot freight shipping.
That means if a new requirement appears to add something in the warehouse, space needs to be added. In some cases space does not exist around the plant, so you need to get some space in a warehouse somewhere else, most probably managed by a third party with higher costs, then integrate an inventory management software with that third party warehouse. This is already very complex for a manufacturing plant with zero budget for IT projects and the cheapest IT people needed to keep the lights on.
So customers can only order replacement parts while assembly lines are currently doing production runs?
And comingling parts with completed machines? Heh. You have no idea of the distribution chain of b2b retail goods vs b2c service repair and such.
6-8 weeks repair time is still common, especially nowadays.
Or, if you really want to stamp down about it, you do not allow them to recoup delivery costs and that's their punishment for making an unreliable machine in the first place.
This means simply that parts won't ship and service is only done at approved manufacturer facilities. OH wait...
This was 2018.
International shipping is not even close to being a level playing field:
"Arcane rules established by the 144-year-old Universal Postal Union make it possible for a Chinese e-retailer to send a package across the Pacific to a customer in the U.S. at a cost lower than what an American competitor would spend to ship the same item to a neighboring state"[0]
[0] https://www.bloomberg.com/opinion/articles/2018-10-18/trump-...
If they all had to provide all the parts at a reasonable cost, they'd figure out a way to get it done. I'm sure Siemens, say, can figure out a way to ship a part by part number efficiently, considering its already on a shelf somewhere.
And if you a company don't want to pay for that? Use a standard part. Now it's not your problem.
It'll never happen, but it's nice to think about as the world drowns in piles of ruined single-use equipment, while the money spent on replacing them flows endlessly corporate pockets.
What’s “too cheap” in your situation is the highly automated, continuous conveyance, mass production line that can take in parts by the container load and pump out fully-functioning dishwashers for less than a week’s wages.
What is the basis for this assetion? What data or information have you used to come to this conclusion?
The last appliance part I bought was the motor for my gas dryer. Several parts places had it. Amazon had the best price by a small amount and I got an exact fit OE motor in 2 days for $114. A year later, that price has soared to $109 and is now available for next-day delivery.
How much less do you think it should possibly cost to be able to order an exact fit ~10 pound, ~1/3 HP dryer motor on a Sunday for Monday delivery? $109 seems like an incredible bargain to me, even if Amazon and Frigidaire pocketed $20 each of pure, obscene profit.
https://www.amazon.com/dp/B0053Y3A8M/ref=cm_sw_r_cp_api_glt_...
Problem solved.
But they make it really hard to get the parts.
In 2010 my Fisher-Paykel dishwasher broke. I called the repair service. They charged a little over $100 to tell me that it would cost DKK 6500 ($950) to replace the two broken water softener modules. I spent a long time time searching for a place to buy those modules. Eventually I found a place called Leeds Applicances (closed now) that would sell it to me for £68 + VAT + £20 shipping. I took me maybe 30 minutes to replace the modules, just a lot of connectors and tubes that had to be connected the same way.
Before that I had a dryer that started to make a horrible rattling sound. I refused to just replace the dryer and took it apart. I was some nylon wheel on the belt drive that was worn out. But no one was selling a replacement. I spent about a month complaining to the importer and in the end I went on my bicycle to the Zanussi importer in an industrial area outside Copenhagen and after waiting in their office for a long time I was allowed to buy this piece of nylon for $50. It probably cost less than $1 to produce and they had newer sold one to a consumer before.
Sure, ordering and delivering all the parts separately and individually would be more expensive, but let’s also not pretend that selling and shipping spare parts is prohibitively difficult and costly.
Usually retailers will offer "room of choice" delivery in the UK for these sort of appliances, which means that the dishwasher will be delivered into the house which often requires a 2-person delivery. If you required an item such as a dishwasher to be delivered to a flat for instance, rather than just dropped off curbside outside a block of flats, that would typically require a 2-person delivery in the UK (See services such as DX 2-Man as an example of this type of operation).
Secondly, there is often a requirement for light assembly (i.e. simple installation, removal of packaging, plug in the appliance) which is usually a paid addition by the customer. As soon as you do this, it's often more effective to have all deliveries be 2-person rather than split up the delivery territories (although if you are going through a pallet network, depending on the item and service required, you may be able to split these).
If you don't need this and just want it dropping off outside the customers home (curbside delivery), the cost would usually be c£40 via a pallet network.
The prices I've given are pretty normal commercial prices for a large item delivery to anywhere in the UK (excl. some parts of Scotland).
I gave a 2-person price because I was assuming some sort of 'white glove' service would be required for this, i.e. not just a curbside delivery but there would be an expectation to deliver the item to the kitchen, including if the person lives in a flat for instance. If a 2 person delivery wasn't required, the price would be closer to £40 for a curbside palletised delivery these days.
You might be able to get 15 dishwashers in a van, but delivering to 15 customers in 4 hours is way beyond what is realistic for this type of delivery (you simply won't get the delivery density required). A typical van delivery cost from a regional hub would be c£25-£30, but then you also have to consider the trunking cost from the NDC.
(Logistics is my day job, which is why I have a good idea on the costs of pallet networks, van networks and 2-person delivery networks, all of which I have received recent quotations for or calculated the costs of)
With spare parts, you have to keep the machinery and the knowledge to produce spare parts around for a X years, or make sure your parts won’t degrade for X years, predict how many you’ll need, produce them up-front, and pay for storage.
That worked reasonably well when machines had fairly standard replacement parts. If your part doesn’t change for years, keeping manufacturing knowledge is almost free, and predicting the number of parts needed easier because of the law of large numbers (if you sell ten variants of a design, you may know you’ll need 100,000 ± 10,000 replacement widgets, but for each part that may mean 10,000 ± 5,000, so you’d have to stock 10 × 15,000, knowing you likely won’t need 40,000 of them)
However, current hardware production is very flexible. Making a part slightly different to slightly improve a design is doable (examples in electronics: ASICS, custom battery sizes, custom LCD panels). Do that ten times in a single design, and the resulting device is significantly better.
I think this kind of regulation will trigger a lot of innovation in hardware manufacturing, and may still lead to products that are (slightly) worse if you ignore repairability.
Honestly, I would be very tempted by appliances/cars that said "we've been using these parts for 20 years, and expect to do so forever so replacement parts won't be an issue". I believe some European car makers did that very thing.
Yes, it won't have certain definitions of "better", but repairability is a feature.
Give me a datsun sunny with standardized injerctors and a catalytic converter, then keep making the same thing with the same frame with a drop in standard 100hp electric motor and however many 12V 200Ah drop in lithium batteries I want to carry. If it's unsafe, add a roll cage, and a 5 point harness. If it's still unsafe lower speed limits, design better roads, and only let people who are highly trained drive.
Or a 250cc twin motorbike with 15 hp that weighs 110kg
Or a raileigh pusbike with a 3 speed sun gearbox, drum brakes and a brazed chromolly frame that will still be working after a carbon frame has turned to shards from UV or an alu or hi ten frame is cracked due to corrosion and work hardening and on its 10th drivetrain.
Or the same kettle or toaster or microwave that's been made for decades with simple dials and switches but without changing the shape for no reason or a byzantine menu to reverse engineer back to power and time (the only things that mattere and the interface often used in the 50s).
Make TVs a simple display with a standard mounting point for a standard power supply and a general purpose computer.
This seems like a problem that could be solved by standardizing the parts among multiple models (possibly between different brands), so if legally mandating availability of replacement parts encourages that, it might not be a bad thing.
If you want your own part, you have to either make it available, or you have to make it reliable enough that you don't need to.
That would remind the incentive to have parts that fail be profitable. Making unreliable and unserviceable devices should cost you more.
Let them sell us autonomous cars for $1,000 which need a $5,000 subscribtion to drive. Oh, you want to put child i a car, the car won't start unless you add a child add-on.
Oh, you need to go to the hospital, because your wife is giving birth, that will be extra $5,000 one-time fee.
Of course the sheet metal frame, motor, and controls are the same but on a dumb appliance those rarely fail. on a "Smart" appliance those the replacement "smart" controls can be more costly than the entire replacement unit
Not terribly surprising but I didn't expect everything to be exactly the same across that many know and unknown brands
This can be an advantage as sometimes you can flash default firmware to turn a cheap yumcha monitor into a better one.
Lets be real here, the companies want you to buy a new product, and expensive parts are just one of the parts of planned obsolescence.
It would be 180€ to get it repaired, spare parts are not available even aftermarket/Ali baba/... But then I know I'm going to need to call them once a year or so - so instead we buy a miele which is a higher initial price but longer lifetime in every test a d at least decent reparability.
Put it in the same container as all the others.
Send it to the same retailer.
If one part fails a lot, shove a crate full of those in the same container.
Maximum cost: Add the fraction of your products that need repairs over wholesale.
If lots of machines need repairs you've fucked up and should he paying more or figuring out better logistics.
> Are you telling me that all that steel and plastic and motors and controllers and labor and profit and shipping and everything is actually 75% of the cost, and 25% of the entire value of my dishwasher is tied up in the value of that one part, the one that happened to need replacement?
You're forgetting that the spare part also needs similar logistics, shipping, support, etc. around it, so you would expect ordering one of every part separately to cost far more than ordering a single machine even before they put any further markup on it.