How about a serious sale?

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Seems the woodworking retailers consider 5% off a sale. When are we going to see 40% off good tools?
For exampkle, Woodpeckers just offered memebers of their e-mail "club" the Precision Router Lift for $269 rather than the regular $289. That's just under 7%.
Is it me or are these "sales" a bit weak?
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with a 5% discount off power tools the profit is probably cut in half.

Maybe weak but if you are really serious about buying the tool this discount may be just enough to close the deal.
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Jewelry has 40% to 80% off sales and more because they mark it up 300%. Clothing is often 50% off at end of season because it will not sell next year. Markups are huge on clothing.
Tools don't work that way. Doubt you will ever see a 40% off unless it is something that is discontinued. This years router bit and clamps will still be in style next year. When I was in the hobby industry, dealers paid list minus 40%. Distributors paid list minus 50% - 10%. Over a certain order size 50-10-2 was common.
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Hi NEM,
Sale? It doesn't even take a sale to suck me in. Just bought me the Grizzly 1023SL on the 31st because of the $100 price increase on the 1st.
Clever bastards.
Now I have to figure a way to unload 462 pounds off the truck & get it into my basement.
SWMBO just smiles.
Lou

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Never Enough Money.... a reality check. I have sold equipment for years and even owned my own tool store. The tool market is so competive you were lucky to make a solid 8 to 10% margin on machinery. You sold machinery as a loss leader in order to sell the accesories that did have a respectable profit margin. I can tell you from the heart, making a living selling power tools and woodworking supplies is damn hard work with little money rewards. There simply is not enough profit and margine to offer such a deep discount. If you think I am full of it....buy your own store and good into business yourself. Discount everything 40% and sell everything below cost and see how long you can stay in business. Believe me people have tried and next thing you know they are filling for Chapter 13 and closing shop. good luck... Mike
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here's a note on franchises....from a small business website:
A lot of people in the franchising field will tell you that franchises have a failure rate of about 5 percent, compared to the 30 to 50 percent failure rate of independent entrepreneurs.
You should be aware, however, of recent studies that question the 5 percent rate. For example, a 1995 study by Dr. Timothy Bates, a professor at Wayne State University in Detroit, found that the franchise failure rate actually exceeded 30 percent and that franchises made lower profits than independent entrepreneurs. Dr. Bates' study also found that the average capital investment of franchisees was $500,000, compared to $100,000 for independent entrepreneurs.
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Undercapitalization is the single greatest cause of failure in small businesses, that's for sure.
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On 3 Jan 2005 16:24:54 -0800, "Never Enough Money"

That does not even pay for the 9.75% sales tax. A 20% is a good sale, but 50% (clearance) off retail is much better.

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wrote:

Once in a while you can score. I went to OSH one time and there was a bunch of power tools on sale marked clearance 50% off regular price. One of the items was a scroll saw that had a regular price of $120. When they scanned the price it came up on the computer as $99 and they gave me 50% of that and they had counter coupons for $10 off so I ended up with a new scroll saw for $49.
--

Roger Shoaf

About the time I had mastered getting the toothpaste back in the tube, then
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A friend is the owner of the local Woodcraft store. He regularly shares his cost with me. The markup on power tools is mighty thin. When Woodcraft does their 10% off sale on Delta, or Jet, the store is losing money on every sale. It's a national campaign that they must participate in. I don't know if HQ reimburses them or not. Many times the prices on Amazon are lower than his cost. He said they make their money on everything else in the store.

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That's BS! I am a WMH dealer and there is nothing with as little as 10% markup except some very pricey high end machines, mostly metal working. We are not forced by WMH to sell at any price. He's right about Amazon as they do sell awfuly cheap. Leigh at MarMachine
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snipped-for-privacy@hotmail.com writes:

I very much doubt your store owner is losing money on those sales--they are usually co-op ventures between Woodcraft, the manufacturer/distributor and the store.
Mark-ups on power tools generally range from 17% to, maybe, 23%, depending on company, state of the market and competition. Anytime a sale knocks off more than 10% or so, it becomes a break even deal--gross mark-up is NOT profit--with luck, but if Woodcraft backs off its 5%, that eases things at the store level, at which point Woodcraft would expect the manufacturer to back off a couple percentage points on their charges.
Power tools were marketed intensely, with competitive throat cutting before the Chinese entry and things have not gotten betterfor the companies (which is part of the reason that just about all U.S. production capacity for such tools is now gone: the rest will leave within 5 years, IMO).
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On Mon, 3 Jan 2005 22:03:20 -0600, "bob"

So how come another independent dealer 15 minutes from my local Woodcraft ALWAYS sells Delta for 10% less than Woodcraft?
Should the indie place a collection plate near the door? <G>
Barry
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wrote:

Not everyone can purchase for the same price. Delta used to have different discount levels for purchases across its line, based on the amount purchased. The dealer in our area had a list for those willing to wait and split his discount.
Don't want to get into franchise limitations, co-op advertising, overhead ....
I'm going to use my Menards 11% coupon for some shop supplies....
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I seriously doubt the Woodcraft chain is not part of some preferred price package, especially since Delta seems to do campaigns with them on a monthly basis.
Barry
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wrote:

I'd be surprised if they weren't taking a markup of some kind at the franchisor level.
Patriarch
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wrote:

advertising, etc?
I'll also bet that Woodcraft isn't the preferred customer that a BORG is....
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George notes:

Woodcraft and Rockler and Woodworker's Supply may not be as "preferred" as a borg in some areas, but sit back and think about how many Unisaws, PM66s and JTAS10s the borgs sell, as compared to those sold by the above three. The same holds true for ALL the upper end woodworking tools, not just the big power tools.
Most large items are bought through the franchisor: the individual store wouldn't be able to swing the weight that, for example, WSC can with 60+ stores to supply. Even with the contracted franchise percentage, the store normally does better to buy through its franchisor. And in many instances, it is contractually obligated to do so. And on smaller items, the company may do its own importing, locating and importing tools and accessories that the individual store cannot even afford to look for. When I left Woodcraft, they had four of the best product managers you're ever likely to find, and these guys spent a lot of time overseas, searching through old contacts and making new ones. Most U.S. stuff was handled by phone,but for first time buys in Germany, or England, or Taiwan, or mainland China, or elsewhere, face-to-face often works better. Not all of those great router bit deals come in over the transom.
Charlie Self "A politician is an animal which can sit on a fence and yet keep both ears to the ground." H. L. Mencken
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I doubt that Woodcraft is losing money on their 10% sales. Otherwise, they'd be out of business.
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Are you guys nuts? The reason there are so many tool retailers and manufacturers is because there IS money in it. Their margins ain't that thin.....
It's a volume versus price trade off and they opt for lower volumns.
Regarding these thin margins reported from retailers (e.g. Woodcraft), I suspect year end kick-backs just like car dealerships get.
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