# Spare Parts Attach Rate and Aftermarket Revenue Calculator

> Source: https://netray.co/tools/spare-parts-attach-rate-aftermarket-revenue-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Project aftermarket parts revenue and gross profit from your installed base, new shipments, retirements and how many customers buy from you.

## Category

cost-finance

## Industry

Industrial Machinery

## Audience

- Aftermarket manager
- OEM service director
- Product manager

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Machines in the installed base today

**Key:** base

**Type:** number

**Default:** 600

**Min:** 0

**Step:** 10

**Unit:** machines

#### New machines shipped per year

**Key:** new_per_year

**Type:** number

**Default:** 60

**Min:** 0

**Step:** 5

**Unit:** machines

#### Annual retirement rate of the installed base

**Key:** retire

**Type:** number

**Default:** 6

**Min:** 1

**Max:** 50

**Step:** 0.5

**Unit:** %

**Help:** Minimum 1 percent. Based on a typical machine life of 15 to 20 years.

#### Annual spare parts and consumables spend per machine

**Key:** spend

**Type:** number

**Default:** 7500

**Min:** 0

**Step:** 250

**Unit:** $

#### Share of that spend captured by you (attach rate)

**Key:** capture

**Type:** slider

**Default:** 45

**Min:** 0

**Max:** 100

**Step:** 1

**Unit:** %

**Help:** The rest leaks to distributors, copy-part makers and the customer's own stock.

#### Gross margin on parts

**Key:** gm

**Type:** number

**Default:** 38

**Min:** 0

**Step:** 1

**Unit:** %

#### Years ahead

**Key:** years

**Type:** slider

**Default:** 5

**Min:** 1

**Max:** 15

**Step:** 1

**Unit:** years

**Outputs:**

#### Retirement rate as a fraction

**Key:** r

**Expr:** retire / 100

**Format:** decimal

#### Installed base after the horizon

**Key:** base_n

**Expr:** base * pow(1 - r, years) + new_per_year * (1 - pow(1 - r, years)) / r

**Format:** integer

**Description:** Closed form of annual retirements plus annual additions.

#### Total parts market in your base

**Key:** market

**Expr:** base_n * spend

**Format:** currency

#### Your annual parts revenue

**Key:** revenue

**Expr:** market * capture / 100

**Format:** currency

**Primary:** true

#### Annual gross profit from parts

**Key:** gp

**Expr:** revenue * gm / 100

**Format:** currency

**Primary:** true

#### Annual revenue leaking to others

**Key:** leak

**Expr:** market - revenue

**Format:** currency

#### Value of one extra point of attach rate

**Key:** point_value

**Expr:** market / 100

**Format:** currency

**Chart:**

#### Parts revenue vs years ahead

**Type:** line

**X:** years

**From:** 1

**To:** 15

**Steps:** 15

**Series:**

- revenue
- leak

**Disclaimer:** Simplified model with constant spend per machine and constant retirement rate. Real spend rises with machine age and usage.

## Content

**Intro:** For many machine builders the installed base is worth more than the next sale. This calculator estimates parts revenue from machines already in the field and shows how much leaks away when customers buy elsewhere.

**Sections:**

#### How to use it

**Body:** Enter the number of machines in service, how many you ship each year and the share that retire each year. Add the annual spend per machine on spare parts and consumables, and the share of that spend you currently capture. The attach rate is the key lever: it is the percentage of aftermarket demand that comes to you rather than to distributors or copy suppliers. Choose a horizon and read your parts revenue, gross profit, revenue lost to leakage and the value of one more point of attach rate. Compare today's installed base with the one in five or ten years to see the effect of growth and retirement.

#### The math

**Body:** With a retirement rate r, the base after n years is the old base times (1 - r) to the power n, plus yearly additions times the sum of survivors, which is (1 - (1 - r) to the power n) divided by r. Market equals the future base times spend per machine. Revenue equals market times capture. Gross profit applies your parts margin. The retirement rate is limited to at least 1 percent because the closed form divides by r. If you have actual age data, use it instead: machines older than the warranty tend to spend much more than new ones.

#### How to read it

**Body:** With the defaults, the base grows from 600 to roughly 800 in five years and the value of a single attach point is about 60,000 a year, which helps justify spending on a parts web shop, kitting or serial-number-based recommendations. If leakage is greater than revenue, prioritize availability and lead time, since customers usually buy elsewhere when your parts are slow or expensive. Remember that serial numbers captured at shipment and registered at installation make the base visible; without them you are estimating blind.

**Bullets:**

- Track parts sold per machine serial number.
- Bundle wear parts into annual kits.
- Quote from the parts list tied to the as-built BOM.

#### Common mistakes

**Body:** Teams often assume the whole installed base is still alive and in service, which overstates the market. They also use a constant spend per machine even though older machines consume far more parts than new ones, and they confuse attach rate with fill rate. Another trap is counting warranty parts as aftermarket revenue. In an ERP, make sure installed base records, bill of materials as built and sales history by serial number are linked so this model can be fed from facts.

**Cta:** Where installed base, as-built BOM and parts orders sit in an ERP, we can build a read-only agent that calculates attach rate by model and customer.

**Faq:**

#### What is a typical attach rate for OEM spare parts?

**Answer:** It varies widely by product, age of machine and how proprietary the parts are. Proprietary wear parts can reach very high capture, while standard catalog items such as bearings and filters are often bought elsewhere. Measure your own by machine serial number.

#### How do I estimate the retirement rate?

**Answer:** Divide one by the average expected life in years for a rough rate. A 16 year life gives about 6 percent. Better is to use survival data from your serialized shipments and service records if you have them.

#### Should consumables be included with spare parts?

**Answer:** Yes if you sell them, as they often form the most stable part of aftermarket demand. You can run the model twice, once for consumables and once for repair parts, because their margin and capture rates differ.

#### How can I raise the attach rate?

**Answer:** Typical levers are faster delivery, parts kits tied to a service plan, recommended parts lists by serial number, an easy online catalog and competitive pricing on the top items that customers compare. Test one lever at a time and measure.

## Search terms

aftermarket revenue calculator, spare parts attach rate, installed base revenue model, OEM parts capture rate, aftermarket parts revenue forecast, machine installed base retirement, service revenue per installed machine, spare parts leakage calculator

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