Tuesday, March 23, 2010

Giving warranty on modules and components - pros and cons

Today I got a question: "What warranty do you give on your LJ41-02760A LJ92-01202 Repair Service?"

Warranty is one thing I have always had problems with.

Especially for electronic modules, whether new or serviced.

As I explained the potential customer, the problem is that a faulty sustain board can easily burn a buffer and it would only take a 2-3 seconds to do so. I know it the hard way myself, in fact I still have that Y-sustain waiting for service on my desk.

So how could one issue warranty to a part that can be installed and fried right on the spot?

The simple and logical answer is - one shouldn't!

Then how are customers protected?

Well, in my opinion there are two options here: one is to break the above rule and hope that people , in general, are fair. In my opinion this is how Lehman Brothers, credit crisis and socialism in Russia all started.

The second approach is to not trust people, but turst common sense instead. A customer's motivation to buy product or service is based on a balance of cost, risk and potential benefit.

Presenting or pumping up warranty lowers risk for the customer and they get ready to buy.

Since I don't want to turn to the next Lehman or the next Russia I say we don't touch warranty if we have no control over installation and use process and instead we play with the cost.

I say I offer the cost low enough to get started - even if not profiting - and then slowly building a history and recommendations. Then I increase the price so I can actually make profit.

An independant marketplace like eBay helps a lot for building credit through past sales. if a customer sees 10 other customers being happy before him he'll certainly feel more secure even if I do not offer warranty.

What is your take?


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