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Sourcing OE Brands vs Aftermarket


11/17/2008
By Gary Goms

Warranty, performance, reliability all factor into the decision.
 
In today’s highly competitive automotive service markets, independent shop owners must often decide whether to buy a replacement part from an aftermarket or original equipment (OE) source. In some instances, the lower price and more tolerant warranty of aftermarket parts might be had only by accepting a sacrifice in performance and reliability. The OE part, on the other hand, might purportedly offer superior performance and reliability, but at the sacrifice of accepting a higher price and a less tolerant warranty policy.

For any progressive shop owner, the difference between buying aftermarket and OE is often reflected in the number of parts warranties and comeback calls that must be absorbed by the shop’s bottom line. In general, most shop budgets will only accept a comeback rate of not more than 5 percent without affecting the shop’s overall profitability.

A CASE STUDY
A recent experience of mine has indicated that times have changed for aftermarket parts. Although I’m officially retired, I’m often called upon to solve difficult diagnostic cases like a 1988 GMC C1500 pickup truck that was experiencing sequential fuel pump failures. In this case, the retired owner of the well-maintained GMC had the truck delivered to the door of my shop with the explanation that the engine had suddenly stalled. He also said that the current fuel pump was the third fuel pump that had been installed in the past several years. Several tests confirmed that the 12-month-old fuel pump was locked up and not pumping fuel. Thus began my decision to purchase an aftermarket or OE replacement.

OE VS. AFTERMARKET
A neighboring shop had performed the second and third fuel pump replacements, using an aftermarket pump on the first replacement and an OE-brand pump available through his local jobber’s parts distribution system on the second replacement. The first pump, which was evidently an aftermarket pump, had been installed by an out-of-town shop.

In this case, the diagnostic issue was to explain why a low-pressure electric fuel pump that has a normal life expectancy of more than 100,000 miles on a throttle-body fuel injection system was failing at approximately 8,000-mile intervals. My neighboring shop thought that the original aftermarket replacement pump had been defective and that replacing with an OE-branded pump would solve the problem. At this point, the one-year warranty on the jobber-supplied OE pump had expired, leaving the owner to foot the bill for still another replacement pump.

As with many OE versus aftermarket purchasing decisions, I was confronted with choosing an aftermarket pump with a more tolerant warranty policy, which was ideal for a high-risk situation like this. Or I could buy an OE pump from a dealership that may not have a tolerant warranty policy and bet on the higher quality carrying the day. In either case, another pump failure would cost my shop about three hours of time to test the pump system, pump out the extra-long 30-gallon fuel tank, lower it to the ground, replace the pump, inspect and clean the electrical connections, and re-install the tank.

THE LOOSE BAFFLE
Given the high failure rate of pumps for this truck, I wasn’t leaving any stone unturned in solving this vexing series of fuel pump failures. Following my standard procedure, I tested for a voltage drop through the recently-installed fuel pump relay, inspected the wiring from the relay to the pump, and thoroughly cleaned the fuel pump ground bolted to the top rail of the frame. After removing the pump from the tank, I found that it was missing the inlet screen, which protects against jamming the pump rotor assembly. Another inspection revealed that the inlet screen was missing was because the plastic fuel tank baffle was no longer anchored to the fuel tank. The loose baffle battering against the fuel pump might explain, in part, the truck’s multiple fuel pump failures.

AFTERMARKET FITS THE BILL
Next, I discovered that my jobber’s premium pump line had supplied an OE-branded fuel pump. Although this quickly disposed of the OE versus aftermarket dilemma, I suddenly was confronted with locating the optional, extra-capacity fuel tank for a 20-year-old pickup. Time and money being a factor, I recalled that I had served on a product review committee for a company that builds and supplies replacement parts for old, but popular, vehicles like the 1988 GMC pickup. I called my local jobber, requested the aftermarket brand, and had a brand-new, updated fuel tank delivered the next day ready for installation!

RISK AND LIABILITY
Many years ago, a fellow member of the Automotive Service Association of Colorado and I were speaking to students at a well-known vocational trade school in Denver. A student broached what he saw as an ethics issue of rebuilding a rotating electrical part like an alternator in-house as opposed to installing a new or remanufactured part at a much higher price to the customer.

My fellow member responded quite brilliantly by saying, “There’s always a question of risk and liability in any repair job. Regarding risk, let’s say that you’ve saved your customer several hundred dollars by installing new brushes and bearings in his old alternator. Regarding liability, let’s say that if your rebuilt alternator fails during a weekend trip, you might be asked to repay towing, lodging, and other consequential expenses. So, what’s more profitable for you and more cost-effective for the customer, the bench rebuild or the new or remanufactured replacement?”
That statement has always stuck in my mind and the essence of risk and liability is the basis for the OE versus aftermarket choice.

The above example of the fuel pump failure on the 1988 GMC pickup is a typical example because the labor to replace the pump amounts to at least several times the cost of the pump itself.

In earlier years, the electric motors used in many aftermarket and OE fuel pumps were under-capacity and simply didn’t deliver acceptable longevity. Unfortunately, as many OE suppliers upgraded their pumps, many aftermarket suppliers lagged behind. This resulted in aftermarket pumps acquiring a reputation for poor reliability. The issue became such an issue in shop owner’s minds that aftermarket distributors began adding the OE pump option to their electric fuel pump cataloging.

On the other side of the balance sheet, many aftermarket distribution groups offer nationwide warranties on many of their parts lines.

So, when an independent shop installs a new aftermarket fuel pump, he can rest assured that the pump can be warranted on the spot by an associated service dealer.

CHOICE AND CIRCUMSTANCE
Although I’ve used electric fuel pumps to illustrate the nuances of choosing between OE versus aftermarket parts, that same rationale extends to other parts as well. As for choice, many independent nameplate specialists prefer OE parts because they’re competing directly with local dealerships on quality and price. As for circumstance, an independent general repair shop performing an electronics repair might be forced to buy an OE electronic part that isn’t available through aftermarket distribution, or he might be forced to use an aftermarket part on the basis of immediate availability.

Regarding sourcing of aftermarket or OE parts, I tend to buy from a supplier with whom I have enough purchasing power to carry some warranty clout. For aftermarket suppliers, I prefer staying with one or two jobbers while with OE, I buy from the nameplate supplier who provides the best counter and warranty service. The fact of the matter is, I rarely shop for price and I rarely change suppliers unless forced to do otherwise.

Gary Goms is a former educator and shop owner who remains active in the aftermarket service industry. Gary is an ASE-certified Master Automobile Technician (CMAT) and has earned the L1 advanced engine performance certification. He is also a graduate of Colorado State University and belongs to the Automotive Service Association (ASA) and the Society of Automotive Engineers (SAE). 
  Previous Comments
avatar   dennis duncan   star   10/5/2009   4:39 PM

Just one from me,G.M. offers a long list of parts,that when installed at a G.M.dealership comes with both parts and labor,do you have feed back on this program?? Thanks Dennis















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