Aftermarket (merchandise)

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Aftermarket (also after-market) refers to any market where the customers who purchase one product or service are likely to purchase a related, follow-on product[1] The concept of a secondary market for merchandise, is related, but not the same. Where an aftermarket refers to a potential follow-on product sale, a secondary market refers to an availability of products due to their re-sale by the end customer.

The existence of an after-market is often a persuasive argument for manufacturers to stay in direct contact with end users. Manufacturers will use postage-paid guarantee cards, for example, to keep track of the address of end-users.

In many industries--automotive, consumer electronics, home appliances--the after-sales servicemarket has ballooned to four to five times the size of the original equipment business.[1]

—Harvard Business Review, 2006

Aftermarket service includes product support for warranties, contracts, and parts sales.[2]

Success of the razor and blades business model relies entirely on profits from aftermarket merchandise.

Examples[edit]

  • Customers who install a software package will constitute the aftermarket for software support services.
  • Buyers of single-lens reflex cameras are an aftermarket for lenses and flashes.

See also[edit]

Notes and references[edit]

  1. ^ a b Cohen, Morris A., Narendra Agrawal, and Vipul Agrawal. "Winning in the aftermarket." Harvard business review 84.5 (2006): 129. See also: https://hbr.org/2006/05/winning-in-the-aftermarket
  2. ^ "Top 10 Things Your CEO Should Know About Service", MCA Solutions, p.3.