Few structural asymmetries are as consistent in industrial B2B as the one separating equipment margin from aftermarket margin. The difference has been documented across different sectors and by different firms over the past ten years, with convergent conclusions that most mid-sized industrial companies still fail to fully internalise.
BCG published in 2025 its work Aftermarket Services Drive Growth for Industrial Manufacturers with a central figure. Aftermarket generates a gross margin of 48 per cent and represents 26 per cent of revenue in mature manufacturers, with a compound annual growth of 12 per cent in parts since 2019. BCG's second study, European Aftermarket 2030, frames the figure in lifecycle terms: aftermarket equates to roughly 40 per cent of total sales of an item of equipment over its useful life, with margins between 30 and 40 per cent.
A complementary observation from Deloitte and McKinsey, contrasted in successive studies between 2024 and 2025, offers the EBIT conversion. The EBIT generated by aftermarket activity in mature industrial companies stands at around 25 per cent, against 10 per cent of EBIT generated by sales of new equipment. The proportion is 2.5 to 1, which means that each monetary unit of aftermarket revenue is worth, in operating profit terms, two and a half times the equivalent unit of equipment revenue.
The strategic consequence is direct. The industrial company that systematically captures the aftermarket of its installed base operates, in economic terms, two distinct businesses: one of low margin and high volume, dedicated to equipment sales, and another of high margin and substantial volume, dedicated to sustaining that equipment over its useful life. Consolidated profitability depends more on the second than on the first, and yet the internal strategic debate concentrates mostly on the first.
The frequent operational error is to delegate aftermarket to the technical-service area, which operates on operational efficiency criteria, not on commercial-capture criteria. The consequence is that aftermarket is executed when the customer requests it, but is not managed as a business that requires specific commercial leadership, articulated value proposition and capture metrics by account.
Three elements compose a functional aftermarket-management system. Active visibility of the installed base, with data on use, age, maintenance cycle and technical composition of each asset in operation. A specific commercial proposal for recurring services, contractual maintenance and parts supply, articulated with the same rigour as the new-equipment proposal. Commercial responsibility assigned per significant account for aftermarket capture, distinct from new-sale responsibility.
For general management, the implication is threefold. Recognise aftermarket as a business unit with its own leadership, budget and objectives. Invest in installed-base visibility systems that turn the operational knowledge of technical service into actionable commercial intelligence. Modify the incentive system to reward aftermarket capture, not only new-equipment sales.
The standard objection is that aftermarket in many sectors is exposed to competition from independent suppliers and specialised operators offering cheaper maintenance. The objection is accurate and resolvable. Defending aftermarket demands a differentiated value proposition, based on specific knowledge of the equipment, performance guarantees, integration with the product update cycle and, in many cases, usage data only the manufacturer can contribute.
Treating aftermarket as a principal business and not as an accessory service is one of the decisions with the greatest available impact in mid-sized industry, and one of those that meets the most organisational resistance in internal deployment.