FSIP services – Core Charges
Over the last few weeks, we’ve examined Remanufacturing and Core Purchasing. A couple of terms that comes up throughout these topics are “Core Charges” and “Core Purchase Price”. They are very similar when you hear them, but distinctly different in meaning. They can become confusing. This blog is intended to be brief and add clarity to the difference between a Core Charge and the Core Purchase Price.
Core Charge
A core charge is the extra line item you see on your invoice when purchasing a remanufactured part where you have agreed to return your core (the original rebuildable component). Typically, that line item, or “core charge” is no small amount. It may make you question your purchase. Don’t worry, the core charge is like putting down a deposit on your purchase. It is a monetary incentive for you to return your old rebuildable core. Once your order is placed, we’ll ship out your ordered product and WHEN WE RECEIVE YOUR CORE, the core charge is refunded back to you. For example, if you purchase an $800 product that includes a $400 core charge, your initial purchase price is $1200. However, when we receive your original rebuildable core and its evaluated, you will receive a refund/credit for the $400 core charge. Your purchase price was, is, and remains $800.
The core charge is an incentive to help ensure you will return your core to us. Our Remanufacturing business relies on your returned product. It keeps our shelves stocked, permitting faster processing and shipping times of “like-new” product for our customers at a price typically 50% of new.
Core Purchase Price
The core purchase price is at the opposite end of the spectrum. It’s the price FSIP offers you to purchase your core. You do not have to make a purchase to qualify for the payment. If you have old, broken, unusable electric vehicle cores (like controllers, battery chargers, joysticks, displays/gauges), FSIP may be interested in purchasing them from you, we will offer you a “core purchase price”.
Why is the Value of a Core Charge and the Core Purchase Price Different?
A “core charge” is an incentive for you to send in your core after you’ve received your replacement product. The “core charge” must be significant enough for you to take affirmative action and return the core to us. When enough money is on the line that can impact you or your business, then we (as humans) are generally more proactive. If the core charge was negligible, typically we are more inclined to procrastinate. FSIP relies on your timely core return to sustain our remanufacturing business. Returning your core replenishes inventory and makes remanufacturing a viable new product alternative solution.
The “core purchase price” is typically much less than a “core charge”. It is the price that FSIP is willing or able to pay for your used, broken, or non-functional core. A core’s value is variable, dependent upon the part, its demand, and availability. FSIP always tries to offer a fair price for your cores. If you’d like to find out how much your cores are worth, complete the Core Purchase Sheet and one of our representatives will contact you.
If you have any questions about buying remanufactured products or selling your electric vehicle cores, don’t hesitate to contact sales@fsip.biz or cores@fsip.biz respectively. The final blog of this series will address Electric System Design. Until next time….
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