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?
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.
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.
Now I have to figure a way to unload 462 pounds
off the truck & get it into my basement.
SWMBO just smiles.
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.
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
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
About the time I had mastered getting the toothpaste back in the tube, then
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
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
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
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).
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....
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
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.
"A politician is an animal which can sit on a fence and yet keep both ears to
the ground." H. L. Mencken
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
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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