Cheapo Power Tools

Hi All
Having been in the industrial equipment market for 30 odd years, can I make a few points about 'cheap' power tools and just why our Chinese friends can make them so cheap.
A huge part of the cost of a new product - Bosch with the jigsaw, Skill with the circular saw, is development. Not just the huge cost of developing the tool, but developing the market for it.
If you look at the progress of any product in marketing terms the initial sales of a new product will be low - people resist new ideas and it takes time to get new products accepted. You don't make any money at this stage.
The sales graph then starts to grow rapidly and this is where you stick on an absolutely huge margin and make mega bucks.
Sales will then level off, your margin will drop a little, but is still good and you get steady sales, but no growth. The product is a cash cow in marketing terms.
If the margin came under pressure, you could only lower production costs by cutting back on quality of materials.
With most products the sales start to decline for various reasons; the product is replaced by new technology (typewriters for example) or it becomes a 'me too' product that everyone is making.
Some industries encourage this, the motor trade for one. Dawoo were tarted up Vauxhall Astras. Vauxhall sold the rights & machinery and moved on.
Many other industries do the same thing. Italy was the first 'cheap producer' of power tools, compressors, welders, cleaning machines etc because their labour rates were lower.
Now look at the Chinese. They only make copies of other peoples products. No product development, no market development, no huge investment whilst waiting for the return, no marketing to create a brand.
They don't make original items, they make 'me too' products - often passed on by European manufacturer's who have moved on.
Add to that the huge difference in labour rates; monthly wage that compares to a European hourly wage and no wonder they can make stuff cheaply! They don't have to cut material quality to cut costs!
Another factor comes in, the rise of the huge retailers and especially the 'hard discounters' like Aldi, Lidl, Netto. These people have major market shares in Europe, but struggle in the UK because of our high brand awareness (read snobbery).
Suddenly the retailers can shift the huge volumes the low cost manufacturers need.
Simple facts are; that cheap Chinese power tool from Aldi was probably once a top of the range brand manufacturers pride & joy. But due to overheads you will find the same product at different prices.
It is now entirely possible to have power tools that are made cheaply but not cheaply made. You may be buying old technology, but there is no reason to suspect inferior quality in every case.
Three year warranty a marketing ploy? Possibly. More often that the cost of manufacture in a low wage economy exceeds labour rates and transport costs in a high wage economy.
Dave
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Magician wrote:

<snip background info>
Yup go along with that.

To be fair they will also OEM good for big name makers to their spec as well.

You are right, you don't *have* to, but that does not mean that you won't.
It is also important to remember that for most manufactured products, the lions share of the price you pay in the shops accounts for the distribution an marketing costs and not the cost of making it. Hence even if you far east OEM can slash the production costs by 80%, you may only see a reduction is purchase price of 15%

This is where you start to make real inroads into the overall cost - the distribution part of the deal.

How long have Aldi, Lidl et al been in the UK though? I certainly have only become aware of them in recent years.

Yes you will find variations obviously.
Can't really speak with certainty for the Aldi tool although I suspect it is the same as a Cosmo version I have used. If that is the case, then: yes it is serviceable, but there is no way you could mistake it for anything that ever claimed to be "top end".
I can see your point in some cases... the first router I owned was bought for a specific "one off" job. It was by today's standard what you would call a mid range tool (B&D "WoodWorker", about 70 quid IIRC). It was pants - in many ways. I can well believe that one of the Chinese knock offs of the Elu MOF97 design would be better in terms of performance (even if not in support - you can at least get spares for B&D).
In many cases however the low end tool is just that - it is never going to compete with anything that claimed to be high end in the past.
I have a wide range of tools - a few top quality items, and a few Chinese imports. Of the low end ones I can only think of one where I could believe this pattern could fit (a 40 quid Axminster "white" reciprocating saw), for most it is blindingly obvious the moment you handle one, followed by anything else mid range or better.
(Bought a NuTool detail sander on a whim once - on the grounds that it was a tool I did not have, and thought it may come in handy one day. For a fiver I was not expecting much is has to be said. Having now used it once I can safely say it was well over priced!)

The logic is fine, but I suspect that greed gets in the way sometimes... i.e. you area retailer and you can can have a decent tool for 20 quid and retail moderate quantities at 100, or a "cheap as we can make it" one for 4 quid and knock out 20 times as many for 25 quid.
--
Cheers,

John.

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John Rumm wrote :

The problem being that B&D spares costs often approach the cost of complete replacement anyway.
--

Regards,
Harry (M1BYT) (L)
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Aldi and Lidl are huge. Look at the Aldi web site. There are in most Euro countries, USA, Aus, etc. They have "big" buying power. Have a look at the wines. 3 for an award winning wine.
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Doctor Evil wrote:

I appreciate they are big on a global scale, but the question was how long have they been present in the UK? They certainly don't have anything like the quantity or scale of outlets of any of the other supermarkets / diy sheds as yet.
--
Cheers,

John.

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Euro
the
Note the words "buying power".
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Doctor Evil wrote:

How does that answer the question?
--
Cheers,

John.

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"John Rumm" snipped-for-privacy@nowhere.null says...

Aldi has been in the UK since the late 80s.
Share of Grocery Market:12 weeks to April 25 2004     Tesco 27.5%         Asda 16.6%         Sainsbury's 15.5%         Morrisons/Safeway 14.4%         Somerfield/Kwik Save 5.8%         Co-ops 5.1%         Waitrose 3.2%         Aldi 2.1%         Iceland 2%         Lidl 1.8%         Netto 0.6%         Budgens 0.4%
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Rob Morley wrote:

Ah, that is more like it...
To go back to the original point, I don't see that Aldi et al can rest on a "brand awareness" (or snobbery) argument as explanation for their lack of market penetration. Let's face it, John Lewis have far more credibility in this respect with Waitrose but still don't have significant market share either.
The big buying power of the smaller players is important from the point of view of keeping prices low, but UK consumers seem far more sophisticated in this respect now, and long since gave up buying on price alone. That used to be Tesco's model (pile high, sell cheap, don't worry too much about the quality), but even they gave up on that idea by the mid 60's (and started gaining market share when they did).
Aldi etc. are probably better off for qty of premises etc than the likes of Tesco were after 15-20 years trading (in their current form). The main difference however will be that they are trying to expand in a market where there is stiff competition from entrenched players which is rather different from the situation faced by the supermarket pioneers in this country.
--
Cheers,

John.

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John Rumm wrote:

    Aldi are also managing to survive in the US market with the same low cost/overhead formula. No UK chain has managed this so far!
    Regards     Capitol
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Pity that the UK chains are not as clever as the German Aldi chain who have also managed to survive in the UK.
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Magician wrote:

I
Some good stuf there. But you miss out 2 points:
1. Theyre not going to buy designs for high end tools, they will only buy designs for cheapest to make tools
2. Every incoming design is inspected to find every possible way to cut its cost. Metal gears are replaced by plastic, fibreglass tape by cotton, shock absorbing handles by basic plastic ones, etc.
In short, I dont think theres any such thing as a quality chinese power tool. Chinese manufacturing seems to be in the same place Japan was decades ago - and may well change its act just as Japan did.
When it comes to other goods however, the quality spans a wide range, and I have come across cheapo chinese goods that seem just as good quality as the better accepted brands with 5x the price tag. Though not often. But you can never escape the awful marketing, the dreaded Flying Dong logo is a permanent reminder that you wre once a cheapass!
NT
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Magician presented the following explanation :

I buy some of this equipment for my less regular usage needs. I find the quality of build and materials can be very variable. One item I bought, an SDS drill, just keeps on going despite lots of heavy use. An hot air gun lasted just a few minutes and its identical replacement (under guarantee) lasted a similar amount of time. Both came from Aldi and I suspect Aldi simply bought these types of things as a commidity, with no checks at all on their durability in use. Keep the receipts and return them if they suffer early failure.
Hand tools are similarly quite variable in quality.... Fine to cheaply equip oneself so you can have several caches of tools around the house for small jobs, to save your legs on the quick jobs.
--

Regards,
Harry (M1BYT) (L)
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Magician, what you said was magical.
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wrote:

I'd disagree with this, a product fills a 'need', then the market is created by its price, for instance mobile phones.
<snip>

I expect the Chinese have developed their own tooling, and are just manufacturing what their customers (DIY chains, catalogue shops etc) want, which is tools that are cheap but passably good.
cheers, Pete.
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Yes, but perhaps the majority are either impulse buys, or bought as presents. And at the cheaper end, the majority of decent DIYers - IMHO - will find them sadly lacking. If they persevere with them. I've lost count of how many 'budget' tools I've bought only to replace them with decent ones - after discovering just how useful a 'proper' one can be. Jigsaw, router, compound mitre saw, cordless drill spring to mind.
--
*On the other hand, you have different fingers.

Dave Plowman snipped-for-privacy@davenoise.co.uk London SW
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Yeah, in a fit of "Wow ... that's cheap" I bought a three piece 14V kit of drill, jigsaw and detail sander (home brand Homebase for about 15-20). The sander gives you a fuzzy feel all over but doesn't really do anything. The drill is ok for screwdriving, but a bit on the slow side. The jigsaw ... oh the jigsaw! It umm ... gets about 5cm into a piece of 18mm ply and then the battery dies. And it has no guide. And it has crap blades. And it's uncomfortable to use.
Waste of money. Got a B&D Mouse as a detail sander instead, which has done quite well in recent re-decorating. Still use the drill for screwdriving, but back to my corded 10 year old B&D for proper drilling. I did use the jigsaw with the fine blade for cutting some plaster coving recently, but that's it (looking for a new one soon, but I realise a bit more money needs to be spent on them and I need a power planer first!).
a
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On Fri, 25 Mar 2005 23:56:03 +0000 (GMT), "Dave Plowman (News)"

As fas as budget power tools go, it seems tools with a purely rotary action are more likely to give acceptable results, but tools with a lateral action or controls are a riskier proposition.
So in descending order of acceptability you could have angle grinder, drill, circular saw, mitre saw, jigsaw, router, planer, compound mitre saw etc. Cordless drills and tools are a bit of a special case though.
Budget tools are ideal what I'd call for 'beginner DIY', with some care a good selection can be had for 100-150, which would be a lot better than one 'pro' tool alone. They can they be replaced with better ones over time as the need arises.
When starting out doing DIY the biggest time saving is finding out how to do things the most efficient way I'd have thought, even if things do take a bit longer with budget tools. Once this is realised, then the limiting factor becomes the tools themselves, so upgrading them is a good idea.
cheers, Pete.
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Interesting order. Agree with the first 3 or 4. But cheap jigsaws seem to be a nightmare. Also, I would have thought that mid-range planers are pretty good. Extra money bring lightweight and perhaps longevity.
I'm trying to buy a planer at the moment, having got sick to death of trying to get a sensible cutting angle out of my "manual" plane (a bit too cheap me thinks). Homebase (of all places!) have a Bosch PHO-1 (Green range) for sale for about 35, which is reasonable, but I think at least last year's model, if not older. I certainly don't want to spend more than 50. What do you think? Folly or not ..?
a
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al wrote:

I have one of those - bought it probably 12 years ago or more. It was one of those occasions where almost any tool would have done - and that was the cheapest reasonable looking one. Having bought it, it has had reasonably regular use over the years.
Good points: Enough power, runs reasonably smoothly, leaves a good finish. Height of the sole plate is easy to adjust.
Not so good: The dust extraction spout is an odd shape (trapezoidal!) that makes attaching a hose next to impossible unless you can track down the correct adaptor. Mains lead leaves straight out the back rather than to a side, which tends to mean you always get it caught up on the work when planing something long (like the side of a door), could do with being a tad longer. Setting a null depth of cut after changing the blades seems to be an exercise in trial and error (with emphasis on the error bit). You can't lock the trigger on which can become fatiguing after time. The case geometry means that it is not possible to do much in the way of a rebate with it before the case will hit the work.
--
Cheers,

John.

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