How about a serious sale?

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?

Reply to
Never Enough Money
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As soon as you see the prices double just before the sale. I suspect that 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.

Reply to
Leon

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.

Reply to
Edwin Pawlowski

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

Reply to
loutent

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

Reply to
aswr

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.

Reply to
Phisherman

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.

Reply to
bob

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

Reply to
CAtruckman

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).

Reply to
Charlie Self

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?

Barry

Reply to
Ba r r y

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....

Reply to
George

I doubt that Woodcraft is losing money on their 10% sales. Otherwise, they'd be out of business.

Reply to
Never Enough Money

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.

Reply to
Never Enough Money

You really sound like you are guessing here. I can assure you "many" car dealers are not making their money selling their cars either. The new cars sales at many dealerships are simply at break even at best. Big volume sales however generate a lot of business for the much more profitable back end of the business. The mechanical shop, parts department, and body shop/make ready department get a piece of the pie on every unit sold and repeat retail business in those departments generate much nicer profits.

Reply to
Leon

Having worked in a Woodcraft store, I can tell you that the higher the listed price of the item, the less the margin. In addition, Woodcraft stores are franchise stores and get their stock from Woodcraft HQ. There is more to margin than what the store pays and what the item sells for, for instance rent of store space heating/cooling/electrical, local taxes, payroll, shipping costs, interest on loans (unless you coughed up a half mill or more in cash to open your franchise) for starters. At the end of the day/month/year, the cumulative margin on all items sold must at least pay for all expenses. The employee discount didn't apply if it reduced the price of the item below store cost (not even considering all the above). In this case the employee price was store cost. None of the major power tools qualified for the full employee discount because of this. For example, a unisaw might have a margin of $100 before expenses and you might sell one a month. This is a whopping $1200/year profit which you get to use to pay for all the aforementioned expenses. OTOH, items like plastic glue bottles might have a markup of

200%. These things are what keeps the stores in business, not the heavy iron. When there's a sale on these big ticket items, it reduces the margin to a point where you can only hope customers attracted by the sale also buy a bunch of small stuff and/or accessories.

- Doug

Reply to
Doug Winterburn

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

Reply to
Ba r r y

Correct, they're LEASING them at big profits.

Barry

Reply to
Ba r r y

You think? There are VERY few dealerships that own their vehicle inventory. Not unusual for a typical dealership in a large city to have floor plan interest costing them 5 to 10 million a year. I suspect that the company carrying the note or lease is making the real money. When shopping for a new car, look at the state inspection stickers. The oldest sticker will indicate the car or cars that have been costing the dealer month after month in floor plan interest. When I worked for a dealership the average vehicle cost the dealer about $300 per month to have it sitting on the lot and that was simply interim interest that he was paying. That was in the mid 80's With a modest inventory of 400 vehicles and the price of cars being double that of 20 years ago the expense add up quickly. Many of the leases are backed by an outside finance company and the dealer simply gets a commission on the lease so to speak.

Reply to
Leon

I just bought a Jet drill press on Amazon. The normal price is $399 but Amazon had a one day sale with an extra $17.50 off and then there is the standing $25 off any tool over $199. On top of that I get a $100 rebate from Jet having already bought another tool in their discount scheme this quarter so the net price of the drill press is $256.50. I did a similar thing with their air filter and got a tool that is normally $250 for $125 after all the discounts ($50 off, $25 standing, $50 Jet cash back).

So yes there are some really good deals on tools on occasion. These Jet tools are exactly the same as the Delta models.

Now compare my tools deal with the price of a dishwasher or a washing machine. For $800 I get a piece of crap that has a cabinet made out of thin steel, a cheap motor, bearings etc and is produced in vastly larger quantities. What gives here? I just spent $100 on a part to fix the clothes washer door lock and another $15 on wheels for the dishwasher china basket.

Compare the cost of the machine tools to even the type of hand tools they sell in Home Despot. Its quite amazing the amount of iron and steel you get for your money. Then take into account the fact that Amazon is paying for the shipping which is not cheap on the bulky items and is presumably making some sort of profit.

Bottom line is that the tools themselves must cost next to nothing to produce or the system simply could not work.

The big cost in machine tools is table saws. My Unisaw cost me as much as all the rest of my big tools put together. OK so it has a pricey Baldor motor but the margins on the rest of the machine are way better than those on the bulk of $400 workshop tools. I can see a way that a company could make a profit on those, but no way can I see how a $400 band saw makes money.

Reply to
Phillip Hallam-Baker

Just remember that the Woodcraft franchises must get their inventory from Woodcraft HQ, and Woodcraft HQ ain't in the biz to be a non-profit entity. In otherwords, HQ sets the sets the cost and the sale price for every item they supply, and if there is a big fat margin on heavy iron because of volume purchasing or whatever, it ain't the franchisee that gets the bulk of it. There's a reason Woodcraft went from corporate owned stores to franchises. In a way, it's a form of outsourcing the expensive outlet part of the biz.

- Doug

Reply to
Doug Winterburn

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