Buy 'em while you can

[nailshooter41]

Just picked this up:

wanting to buy Festool, you should get it now. I know they had a price increase recently that scared a lot of people, but they are now closing ranks. I am guessing this will go the way of another (German manufacturer) Stihl chainsaws and a few other choice tools that want to tightly control their product and its bottom line.

This is a great move for Festool as it makes sure there will never be price competition on their tools, parts, service, etc., so they can price as they want. It should cut down on their distribution costs as it will be able to drop ship dealers what they want.to send them. With a locked down system following the Stihl model, I can only imagine what tool repairs and parts will cost. My DeWalt/Milwaukee/ Porter Cable authorized repair center here is already $75 bucks an hour. Following the Festool pricing model, I can't imagine what "factory authorized service" will cost.

I know they told me at WoodCraft a couple of weeks ago that they cannot keep the Domino or the Rotex sanders on the shelf no matter how many they get. But they can't sell the circular saw, router, jig saw or other tools nearly as well. Yet when they buy the Dominoes, they are forced to buy a certain amount of other products as well.

Can't wait to see how long Woodcraft holds onto that product line when they are forced to sell $1400 Domino machines and $700 6" sanders.

And wait until you have to buy a full Systainer system with accessories with every purchase.

I wonder if they will do to Festool what they did to Akeda. Absolutely sell the hell out of the product for a few years, support it in every way, and when they do get their margins for one reason or another, they drop the line.

I noticed too, that Amazon is already taking off all Festool products, including the ones from affiliates.

That can't be good. Get 'em while they're hot!

Robert

[J. Clarke]

How are you getting all that from a statement that Festool will no longer sell directly to end users?

[Leon]

IMHO I view this as a boost to the retailers that carry the products. Now that I can buy Festool at 4 locations within 15 minutes of my home I can more easily find Festool than Milwaukee, DeWalt, etc. Festool has been around for quite some time but has not really pushed the brand name like they have in the last couple of years. I had always heard of Festool but don't recall touching one until early last year. I think that now that the network has been developed there is really no need to deal with the "home office" to find the product. Personally if I was a retailer I would not want to be competing with my supplier. I would be very suprised if the dealers did not know that this was going to happen when they signed up.

This is the only way I have ever known Festool to operate, but then again I have only been looking closely at the line for the past couple of years. In a way I like and respect the fixed pricing. It guarantees you that your local retailer will not be higher than the guy across town or the guy on the internet. It is easier for your local supplier to get and keep your Festool business and you dont have to worry about paying more from your local guy over the guy across town. While the pricing can be high, you can rest assured that where ever you buy it will be the best price that you can get. Anyway you will still be able to buy direct for most anything except the initial purchase of a tool if you choose to do that.

It should cut down on their distribution costs

I'm not sure I follow.

Could it be that Woodcraft makes the different Woodcraft stores buy a certain amount? IIRC the individual Woodcrafts store are obligated to buy a certain amount of product directly from Woodcraft.

I can see that because of the large network of dealers, now that Amazon is at a disadvantage because they have to ship to you rather than you being able to go to the local dealer and getting the tool, and they have no price advantage.

Either way, Woodcraft is only 1 of 4 or 5 different suppliers that I know of that handles Festool within a few minutes of my house.

Time will tell.

[Leon]

Did you miss this lone?

We will continue to offer spare parts and repair service to you directly after April 1st, 2008, in order to guarantee our commitment to the best service in the industry.

[Frank Boettcher]

lower than the price at the retailer?

I ask because that is not normally the case. Normally, if a distributor is asked to tie up dollars in inventory, service parts, and provide shelf space and advertising, co-op or otherwise, there is usually an agreement that they will not be undercut by direct sales from those they represent.

I would think the cost of the tools will depend on how much competition is in the distribution chain and any MAP agreements the distributors have with Festool.

Frank

>

[dpb]

Leon wrote: ...

That's fine for those in major metro areas -- there's no distributor within 250 miles I'm aware of so if can't go Amazon or similar w/ the included regular shipping, I'm definitely out of the market--not that I think they're worth the price differential, anyway for anything that's not absolutely unique (and I don't much like loose tenons as a generally philosophy, anyway, but that's just me... :) )...

--

[Robatoy]

That would be suicide from a marketing stand point. Where would the incentive be? At a grass roots level, my countertop business will charge full-pop to a retail customer. The customer then has the opportunity to try to get a better deal from one of my dealers without my company having the unfair advantage. The dealer then gets to make a choice as to how much to give away from his profit margin. He also knows that my cost to him will give him a healthy bit of room to move. I will everything I can to make sure the dealer gets the gig because he will be calling me again and again. One retail customer is just that.. one retail customer. Large projects, like the new hospital in town, I deal with directly, regardless.

I think Festool understands the concept of a 'marketing honeymoon' quite well. They were in control of their reputation from the beginning, had a handle on production quota, and now they think it is time to have the harvest before the economy goes for a complete shit. Making hay while the sun shines, because it is going to be piss-down rain in 6 months.

Besides, price-fixing is frowned upon by the regulators and that wick has been burning for a while.

That's just what it looks like from where I am sitting.

If Festool is going to force quota, the price and profit will collapse because the retailers under fire from their competitors will start discounting to the point they won't make any money. Honeymoon is over. Next!

[J. Clarke]

Come on, if you can afford 700 bucks for the tool then 20 bucks for shipping isn't going to break you.

[dpb]

:)

[cdubea]

Interesting in that the closest dealer to me is called "The Best Things", where the connoisseur shops!

That will give you and indication of where there pricing is going.

Not that I was planning on buying any Festool products anyway.

Chris

[Lew Hodgett]

Not to worry.

Many years ago I was employed by GE in what was known as "Agency & Distributor Sales".

The "Agency" part of the business covered parts of the business that sold products directly to the end customer and paid the distributor a commission.

The "Distributor" part of the business covered products sold to a franchised distributor, who then resold them to the end market.

The free market was best served by selling to distribution since distributors were free to sell at whatever price they deemed best.

It took about 5-10 years, but ALL those agency products were converted to distributor products, and everybody benefited. GE, the distributors, and the customers.

Agency sales works in the real estate, yacht and a few other markets, but by and large, distribution, left to freely compete in the market place, serves everyone more effectively and at over all lower cost.

Lew

[russellseaton1]

As others have said, how are you reading so much into their decision not to sell their tools direct to the customer? Many companies do it this way. Can you call up DeWalt or Jet and buy a tool direct from them? No, all of their products are sold through their dealer network. But I think you can get parts from Jet. And Grizzly uses the opposite method of having no dealers and you can only buy direct through them. Seems to me both work.

Seems to me no one is harmed. Woodcraft and Japan Woodworker and many other Festool vendors sell the tools online for the same price. Festool USA was just competing with its numerous vendors who sell online. And for the people who are crying because Amazon does not have Festool anymore, big deal. Japan Woodworker sells the tools and has free shipping on Festool last time I got its catalog. And no sales tax if you're outside California. This is where I will buy Festool from in the future if I buy more Festool. Cheaper than locally by 6% sales tax and the shipping charge the store charges me to get a Festool product. No one in the US is unable to buy a Festool product if they want it. Delivered right to their door for the same cost as buying it anywhere.

Festool I'm sure uses the various legal means to fix prices. Price fixing isn't illegal if done in ways the law allows. I'm a big fan of price competition but for Festool its not really an option. Oh well. As for the tools getting even more expensive, they could do that anyday of the week whether they sell them direct to the customer or not. None of the numerous, numerous Festool vendors is being closed down because Festool stops selling direct to the customer. So the competition, or lack thereof, remains the same.

[Leon]

AAMOF I have seen several of on line dealers offering free shipping on Festool products in the past providing a minimum was spent. IIRC any tool would be a minimum spent. IIRC McFeeleys was one.

[Leon]

No. Everyone is/was the same price except with the discount introductory price on new tools.

[Leon]

Actually I doubt any price increase will be seen over NORMAL increases. Buying local is of no advantage of buying direct and buying direct is probably more expensive with shipping added over local. If Festool cannot compete in the market place with other brands the price MIGHT come down.

[Leon]

Festool I'm sure uses the various legal means to fix prices. Price fixing isn't illegal if done in ways the law allows.

And this is not really price fixing either as there are alternative brands available. If all brand tool manufacturers got together and said all 3/8" drills will be priced at $100, that would be price fixing. GM's Saturn has specific pricing also.

I'm a big fan of price competition but for Festool its not really an option. Oh well. As for the tools getting even more expensive, they could do that anyday of the week whether they sell them direct to the customer or not. None of the numerous, numerous Festool vendors is being closed down because Festool stops selling direct to the customer. So the competition, or lack thereof, remains the same.

Exactly

[Bonehenge (B A R R Y)]

McFeeley's ships Festool everywhere.

[nailshooter41]

Don't know if that was pointed at me or Sr. Clarke, but I missed it.

Good for them.

Robert

[Robatoy]

[nailshooter41]

AMEN! Can I get a witness?

Out of all the tools I own, all the way back to my Millers Falls, Bluegrass, etc., I have never, ever seen a tool maker "up" the quality of their tools, except Jet. They were the Rikon of their day when they were in blue wardrobe, probably even less quality than that.

Large Tool makers all go one of three philosophical ways in their life cycle:

1) We will make good tools, never change, and hope we survive and do well. BUT, we will NOT sacrifice our quality. Example: Lie Nieson, Starret, Mitutoyo, (and for now, Festooll) etc.

2) We can make good tools, but we want a bigger spread on the margins, and we need more units out to make that. The market will only take so much, so our margins will come up by making the tools lesser quality in manufacturing and materials. Example: DeWalt, Porter Cable, etc.

3) Somewhere in between #1 and #2.

I think people have too much of an emotional attachment to their tools and forget these manufacturers are just that. They are moving units through a system, not making dream tools. If the product is good, the margins are good, and the market it there, it is a home run. But for all these guys care, they could be making bags of pancake batter.

There is no ancient European guild of craftsmen that guide the tool design for any of these companies, they are just selling widgets.

I simply don't believe that Festool will be any different that the others that have put themselves in this position. Sooner or later there will be some friggin' in the riggin'.

I'm betting on Fein. You?

They are one of the largest tool makers in Europe with several manufacturing facilities. Revamp the line, come up with some spiffy new colors, balance and clean up the cast parts a little and who knows what could happen.

I guess the best thing about the Festool invasion is that it might get some of the tool manufacturers off their butts and get the quality of manufacture up.

Robert