Pricing guidance on parts
Use the following guidance on pricing parts that go on H2O equipment.
Proprietary parts - defined as
1) anything that the customer will not be able to source outside of H2O
2) it is extremely hard to source outside H2O
3) it is a safety related item that the customer will not want to take a risk on
Watermaker​ parts
Proprietary parts - 65% margin or 2.86 times the cost
Includes H2O private labeled membranes, bag and cartridge filters, H2O branded proprietary membrane cleaners
Electrochlorination​ parts
Proprietary parts - 75% margin or 4 times the cost
Includes H2O cells, anything related to T/R, flame arrestor, hydrogen sensors,
MSD parts
Proprietary parts - 85% margin or 6.67 times the cost
Includes: Formula 101, Formula 102, cleaning chemicals
Does not include: blower, discharge pump, chlorine tablets
OWS parts
Proprietary parts - 80% margin or 5 times the cost
Summary Chart:
| Target margin (non-proprietary Items) |
Target margin (proprietary items) | multiplier of cost (non-proprietary Items) |
multiplier of cost (proprietary items) | |
| parts: | ||||
| Sales-Parts-WM | 50% | 65% | 2 | 2.86 |
| Sales-Parts-EC | 50% | 75% | 2 | 4 |
| Sales-Parts-ST | 60% | 85% | 2.5 | 6.67 |
| Sales- Parts-OWS | 60% | 80% | 2.5 | 5 |
| Sales-Parts-OP | 90% | 95% | 10 | 20 |
For parts that H2O sells for competitor equipment, please discuss with Aamir Sundrani on pricing.
Surcharges:
-Add surcharge of 3% for credit card transactions
-Add surcharge of $30 for wiring fee (most international customers will pay invoice using a bank wire)
-Add surcharge of $75 for "Rush Delivery"
Know the difference between Margin and Mark-up
Margin:
Price = Cost / (1-target margin)
So if we want 45% margin on a part that costs us $3, the Price = $3 / (1-0.45) = $5.45
Mark-up:
Price = Cost x (1+ target mark-up)
So if we want 45% mark-up on a part that costs us $3, the Price = $3 x (1+0.45) = $4.35
Engineering Rates
Refer to H2O Engineering Rates 2024-2025.pdf
Field Service Rates
For US GOM non-EC related refer to: 2024 Field Service Rate Schedule (Level 1).pdf
For international and all EC related refer to: 2024 Field Service Rate Schedule (Level 2).pdf