After sales service

After sales service refers to the treatment of customers in the aftermath of a sales. For example, after being sold a bike, after sales service may involve free bike maintenance for a number of weeks.

After sales service is an important part of non price competition often found in oligopoly. After sales service can be a way to encourage people to buy the product in the first place; it can be used to justify a higher price for the good.

Examples of after sales service

  • Warranty. A common example of after sales service is the provision of a warranty for the good. A warranty allows the good to be repaired or replaced if it breaks down within a certain period of time after purchase.
  • Free service after six months (e.g. car / bike)
  • Advice on how to use the product (Apple care)

The provision of after sales service varies in importance depending on the type of good. For example, after sales service and extended warranties are important for goods like electrical goods and new cars.


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