Why Is Festool Allowed To Fix Its Prices?

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I bought a Tundra on July 16 last year, Sticker was around 33k+about 1.4k for ttl. I drove out for 28k less trade in. I imagine I could get a better deal today on the same vehicle but probably not on a car.
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"Tom Watson" wrote:

It depends.
If Festool transfers ownership of the product directly to the end customer, then the retailer becomes an agent and is not allowed to set price since they never assumed ownership.
There are several legitimate ways to accomplish this, including post sale rebates to the retailer.
My neighborhood hardware store is a Festool retailer.
They maintain a display, but no stock.
All orders are shipped over night from a Festool warehouse in Las Vegas.
OTOH, a manufacturer who attempts to dictate terms and conditions as well as end market price of a product owned by some one else, in this case a retailer, is skating on very thin ice.
Not uncommon for offshore suppliers to try to dictate end market pricing, but it is cumbersome and not very cost effective in the US market.
As a result, usually gets abandoned after a few years.
HTH
Lew
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replying to Lew Hodgett, HarveyWildes wrote:

As far as I can tell, this is the best answer. My (U.S.) company is not allowed to tell resellers what to charge for our products. Once we sell product, it is no longer ours, and the new owner can sell it for whatever they want. Any attempt to tell the new owner what to sell the product for is considered to be anti-competitive. The argument that Festool sells dealer expertise in the price, and uses that as a reason for price fixing the basic tool price is also anticompetitive, since not all buyers will want that service. You can certainly include service in the price of the tool, but you can't use that as an excuse for price fixing. The only way that I can figure out that what Festool is doing is legal is if, as this poster suggests, Festool somehow is maintaining ownership of the tool until it is delivered to the ultimate customer, perhaps with sales incentives or rebates involved. That said, if that is not true, then small dealers without a legal department often cannot prove/resist illegal pressure from suppliers, and in many cases it may not be in their best interest to do so - I'd imagine that dealers do fairly well with Festool sales. If it were in anyone's best interest to pursue the issue, it would be a large seller like Amazon, but their Prime memberships already provide a competitive free shipping, tax-free price, so they may not care either.
Price fixing regulations are designed to protect consumers. Consumers are the ones being harmed by price fixing, and consumers do not have visibility to the negotiations being held between Festool and their dealers, so it is very difficult for a consumer to assert anti-competitive practices. That's why government regulators get involved. Clearly regulators in the U.K and Australia think that Festool is misbehaving, so I would not be surprised to see action in the U.S. at some point. In the long run, it could end up either jacking up Festool prices or reducing the quality, but when Dominos are already selling well for $875 because they are the only tool on the market that does what they do well (I'm not counting biscuit joiners as real competition), there is clearly a business opportunity for other tool companies if they can figure out how to provide a competitive tool that doesn't infringe Festool's patents. If another tool manufacturer sold a tool that performed as well as a Domino at half the cost, with fair quality but perhaps not with the same service or expected life, I'd buy the less expensive tool.
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caedfaa9ed1216d60ef78a6f660f5f85 snipped-for-privacy@example.com says...

Perhaps you are. The notion that this was forbidden was the result of Albrecht v Herald Co, which was overturned by State Oil v Khan.

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On Fri, 24 Jul 2015 17:43:30 -0400, "J. Clarke"

In the Uk they control the price through dealer rebates and stock control
If the dealer sells below a set price they lose either some of the discount/ rebate or stock becomes unavailable
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Good explanation here http://www.lanepowell.com/wp-content/uploads/2009/04/petranovichm_007.pdf
Rule of reason. Looks like you can dictate the price it it is higher than the competition.
https://en.wikipedia.org/wiki/Rule_of_reason The rule of reason is a legal doctrine used to interpret the Sherman Antitrust Act, one of the cornerstones of United States antitrust law. While some actions like price-fixing are considered illegal per se, other actions, such as possession of a monopoly, must be analyzed under the rule of reason and are only considered illegal when their effect is to unreasonably restrain trade. William Howard Taft, then Chief Judge of the Sixth Circuit Court of Appeals, first developed the doctrine in a ruling on Addyston Pipe and Steel Co. v. United States, which was affirmed in 1899 by the Supreme Court. The doctrine also played a major role in the 1911 Supreme Court case Standard Oil Company of New Jersey v. United States.
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replying to Ed Pawlowski , HarveyWildes wrote:

Thanks for the Petranovich URL - Looks like our lawyers are being more cautious than needed - I'll have to follow up on this at work :).
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On 7/24/2015 1:44 PM, HarveyWildes wrote:

Things to consider, first is that most of the dealers have a pretty extensive selection/inventory of the product. That in itself, especially with Festool, is a sizable investment "if" the dealer is actually buying the inventory. FWIW SawStop is the same way and I know for a fact that the industrial model of the SawStop is not stocked for resale by the dealers. In fact you can't buy the industrial model from any other dealer other than the one that covers the area that the saw will be sold and delivered to. There is a chance that both SawStop and Festool sell their products on a consignment type basis. If this is true the fixed pricing is understandable. And if I were a dealer I would not necessarily want my competition selling for less than me. As a consumer I would love to buy Festool at a better price but I can appreciate the fact that I can buy my Festool products from whom I wish and not have to worry about whether I am paying more than somewhere else. I don't have to worry about shopping price.
Concerning your comment about an interest in buying a product that does the same as the Domino at half the price with a "fair" build quality I would say that if you are going to be an occasional user that might be a consideration. But consider this also. The quality of the Domino surpasses any tool in my shop. It performs a function that absolutely needs to be precise and continue to be precise. I bought the Domino assortment initially, emptied the 5mm and 6mm sizes many years ago and have bought a replacement "case" of 6mm and I am running low on my third replacement case of 5mm tenons. There are 1,800 5mm tenons in a case. With that in mind and considering that there are typically two mortises cut for each tenon my Domino has seen over 10,000 plunge cuts. The machine still looks new and cuts like new. There is absolutely no slop anywhere and the mortise locations are still precise. And I am still using the original bits and none have been resharpened.
Now in this example I am not saying that another type tool at a lessor quality would not be a good choice but when you need absolute precision you are going to be better off in the long run going with the Festool Domino. You really don't want a tool that is going to start cutting sloppy mortises.
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replying to Leon , HarveyWildes wrote:

With regard to fitness of use, you are absolutely right with regard to the Domino. Festool hit a home run with it, both in terms of design and execution, and they deserve to reap the benefits. It's a great tool - everyone who uses it agrees, though not everyone can claim 10,000 cuts (that is seriously impressive)! Maybe I'll get one some day, although I wouldn't use it to it's potential. But if another tool came on the market that did -most- of what a Domino does, and did it accurately, but maybe not as quickly, and would last until my kids took it away because it was too sharp (say 1000 cuts), I'd be OK with that.
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Well, I had 2 plate joiners/ biscuit cutters, both PC brand. In about 17 years I cut about 2500 slots. I find that the Domino is so superior that I use it more and more. It really adds strength to joints and better aids alignment. I use it a heck of a lot more than I expected when I bought it. It elegantly solves problems.
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caedfaa9ed1216d60ef78a6f660f5f85 snipped-for-privacy@example.com says...

What the Domino does is cut a few sizes of mortise, very quickly, easily, and efficiently, without any setup to speak of.
You can get the same _results_ with a shop made jig and a plunge router. The tradeoff is in the time to make the jig and the setup time to use it. If you're making custom cabinets for a living it's easy to justify on the basis of time saved. If you're a hobbyist, a few scraps and some time are a lot cheaper.
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I wonder however how many mortises you could cut in a single size with a single bit. For certain my single 5mm bit has cut 8,000 + perfect mortises. When I bought my Domino I knew I would use it but was clueless that I would use it as much as I have. Even as a person that sells 80 percent of my work I do this for fun and certainly my volume does not come near a living, and the time savings has paid for the tool countless times.
My work has increased in quality because I have the Domino. The Domino lets you focus more on designing and building the desired piece vs. doing the same and with complicated jigs. A lot of the type of work that I do with the Domino was not even on the radar when I bought the tool. What I normally would have used a plunge router for with or with our jigs I do with the Domino. Basically what I am saying here is that I value my free time and that the Domino solves more problems than I ever could have imagined without the needs to design and build jigs. I use it in more ways than I imagined when considering the purchase. I think that some of the jigs needed for a plunge router to do the same cuts that I make with the Domino one might need to be more skilled to design and build those jigs than need be to simply make the complicated cuts with a a Domino.
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In article <729365498459608725.798858lcb11211-

If you're using the same bit that Festool uses you should get the same number unless you manage to break the bit. Nothing magic about a router bit.

Yep, like I said, if you're doing it commercially in volume and getting paid for it, it justifies itself on time saved.

No question once you've got such a tool you find uses for it. But the request was for something with less durability and more limited capability and I was merely pointing out that jigs and a plunge router provide that option.
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On 7/26/2015 9:48 AM, J. Clarke wrote:

Well there is nothing about a router bit, but the domino bit is considerable different than a router bit. The whole plunge process probably makes 20 back and forth passes while plunging. The side of the bit past the first 3/16" or so from the tip does no cutting. I used to do a lot of plunge cutting for Steve Knight and typical two wong carbide blades hardly made it past 400 plunges 2" wide. Once I went to an end mill bit I upped that to at least 1,000 cuts.

Agreed but once you actually cut a thousand or so mortises the price of the Domino seems insignificant.
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@swbelldotnet says...

So you don't plunge it more than 3/16 in a pass. The point is that there's nothing that prevents you from sticking a Domino bit in a plunge router.

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On 7/26/2015 2:17 PM, J. Clarke wrote:

A side note here the Domino bits screw on to a male threaded shaft so they are hollow on the screw end and they are just less than 10MM in diameter so they might fit in a 10mm collet. And those bit's are designed to cut in a sweeping arc, they may not cut as well or last as long cutting in a straight line. The cutting end is rather unique.
I understand that all of this could be done with a plunge router but some of us prefer to be spending more time actually building something other than jigs. ;~) I think a jig is great if it saves you time.
But seriously have you got a jig that will allow your plunge router to cut these? Keep in mind the bottoms of these mortises are 27mm from the very end of these pieces of wood, not the surface that the mortise begins. And the 5mm bit will not cut a 27mm deep mortise. The bit has a shoulder that prevents this deep of a plunge cut. The mortises have to be cut "after" the 1/2" deep and 1/2" wide section of material is removed.
https://www.flickr.com/photos/lcb11211/11051045046/in/dateposted-public/
Then those mortises have to match and index properly with these.
https://www.flickr.com/photos/lcb11211/11051074714/in/dateposted-public/
Now, for another example. I am going to assume you have a biscuit cutter. I'm also going to assume you have cut hundreds of slots for biscuits. Before you bought your biscuit jointer did you seriously consider cutting that many biscuits slots before you bought it? Did you consider or actually build a jig and use a plunge router to cut that many slots before buying the biscuit cutter?
If your goal is to build 6~8 pieces of furniture for your home in a decade your suggestion makes a lot of sense if you have the skill to design the many jigs necessary to make the multiple types of mortises that you may need to cut. In the last 4 years I have built 11 large pieces of furniture for our home and never would have had the extra time to build the other 25 or so pieces in the same period for my customers. With the Domino my production has probably increased 500 percent. And Sketchup plus Cutlist Plus have been significant times savers too.
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On 07/26/2015 5:08 PM, Leon wrote: ...

No, but I would simply cut a standard tenon on the rail and the matching mortise on the stile instead...same end result although I'd probably not both with cutting the tenon down but leave it full width as it would take more handwork otherwise.
I don't quite get the purpose of the overlapping front edge, anyways, though??? One's got a but joint visible from the front either way so there's no difference in precision in length or squareness or anything to get the fit...
--


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Those rails and stiles are for the back face frame of a cabinet. The lap joints allow me to rabbit the pieces to form an indention for the back panel to fit into. The floating tenons reinforce the joints.
Here is how that fits together https://flic.kr/p/hQxWqZ https://flic.kr/p/hQxWWt
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@swbelldotnet says...

I'm pretty sure the Incra on the router table could handle those. Might use up some scrap getting the adjustment right.

Plunge router isn't the right tool for biscuits. But no, I've got a biscuit joiner but I hardly ever bother with it. Thinking about it, I _could_ have used it for something today--thanks for reminding me that I have the thing.

My goal is to relax and take my mind off of work by doing something creative that I enjoy. Furniture is a side effect. Building a jig accomplishes my objective just as effectively as making furniture.
I don't really care about "increasing my production" and since I've already stipulated that the Domino is easy to justify in any kind of production environment I don't really understand why you are so defensive about it.
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On 7/26/2015 8:18 PM, J. Clarke wrote:

Yet another tool... ;~) Getting more complicated.

Really!!! Why not? Put a slot cutting blade on the router and the deed is done lickety split. I use a slot cutting blade for cutting the panel grove in arched door rails, surprisingly smooooooooth. For face in panel slots change bits to straight. Ever easier than using for cutting mortices for floating tenons.
But no, I've got a

Mine is under a pile of dust somewhere. ;~)

And that is perfectly fine. I am only advocating the Domino for those wanting to speed up production and use more M&T jointery.

And I did not mean to sound defensive. When I bought mine I was not nearly as busy, as I was pretty picky about what jobs I would take. Too complicated and that became too much time involved. I would have been right beside you on the comments about the doing this with another tool. BUT after having the thing I can do the complicated joints quickly and accurately so naturally I turn less work down and my production is faster. Different strokes.... There are a few here that have eventually bought a Domino and I don't think they have regretted it whether it was justified or not. AND FWIW The Domino is crazy more accurate than a biscuit joiner, except maybe the Llamelo which is about the same price as the Domino. Any way....
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