(New subscriber) Latest and greatest tools, and old-time tools

Dec 05, 2013 135 Replies

Years ago I worked for a company associated with the hobby industry. Probably not much different than tools. We worked from the alleged retail price industry wide. Dealer got a 40% discount from list when they bought from a distributor. Distributor pricing was 50-10-2 or 50% for any order, additional 10% on orders over minimum, 2% for 10 days. So a distributor paid $4.50 for a $10 list and sold it for $6. The dealer paid $6 and sold it for about $9 to $10. Our cost for making a $10 item was usually about $2.50 or less.

There were some exceptions in the industry. We had one high priced item that was discounted less. (I forget exact amount, but about 10% less than usual) It was an item that had a good market for $40 retail, but no market at $50 retail

Gotcha. I'll retire soon enough and I'll be free to play all I want. I'm really trying to get a shop ready for that day. ;-)

Sure.

Well, it's not those who aren't paying that piss me off, rather those who allow it, freely, while harping on those who do pay the lions share. IOW, Obama's crew.

Woodcraft, Rockler, and Highland aren't big box stores. Sure, their margins on most things are higher but I was specifically talking about power tools, and Festool in particular. Those margins are really tight, at least according to what I've been told. There is a huge investment, there, too.

Just what I've been told by several sources. I agree, it doesn't make much sense, though. I have noticed that some are carrying a lot less inventory, though.

Let me just say that I'm unconvinced. ;-)

The "clogging paper" is probably what I'm missing, though there are other similar sanders.

Sure. I appreciate it. I keep looking at them but haven't convinced myself that they deserve a place high enough on my wish list to ever make the cut. ;-)

I worked at a Woodcraft a few years back. I can assure you that the markup on power tools is pretty low. The only stores making much money on power tools are Home Depot, Lowes, and the like, because they can order by the boxcar load.

If you want to know if their is much margin on any item, just compare prices. If the on-line price isn't a lot less, there's not enough markup to play with. Even then you have to allow for volume differences.

And yes, Festool is different. They don't allow discounts.

When in Rome do as the Roman's do? JCP introduced an innovative pricing strategy a while back too.

Yea and it failed. Then the ceo resigned.

Except that Festool's strategy seems to be working.

...and they haven't gotten any better.

So that, heavily stocking a low profit item really does not make business sense, does it? No body really tells it like it is concerning profit margins, it would be like foot ball teams exchanging their play books.

From an inventory stand point you really don't want to stock more than what you can sell between stock orders.

You did not get me. LOL I did say that to do it to make money, not a living. ;~)

But yes you could make a living but you better be pretty efficient, talented and a good businessman. I stay busy enough with just referrals, I have always refrained from trying to make a living at it, I did not want to invest that much into it. Fortunately I was able to retire at 40. If I had to still earn a living I probably would not be doing it by building furniture.

I understand, I bought my Rotex on Robatoys recommendation. IMHO it was worth the investment with simply the efficiency of the dust collection.

Yeah there are similar sanders but you should really try a Rotex out at your local dealer when the time comes to buy a replacement. These sanders can be amazingly aggressive, just short of what a belt sander will do, or in TOS mode quite smooth.

Just don't try one out till you are in the market. ;~)

On Mon, 09 Dec 2013 01:10:36 -0600, Leon

Especially when upgrades are continually coming down the pipe.

You forgot the 'good looking' part.

Oh yeah, the ruggedly handsome part. LOL

On Mon, 09 Dec 2013 09:17:32 -0600, Leon

Don't you get tired of looking in the mirror? :)

I go by how people look at me! LOL. I don't recognize the old guy in the mirror.

What is this mirror you speak of?

The only time I look in a mirror is to shave. And that gets downright scary at times. Which might explain why I don't shave as often as I used to.

I do not understand that. With a vac connected to either my bosch quarter paper sander or my pc ROS both are close to 100% efficiency on dust. The ROS a little less, but the 1/4 is almost 100%

So why would I spend that kind of money...

Join the Discussion

Have something to add? Share your thoughts — no account required.

Didn't find your answer?

Ask the community — no account required