Discounts on Festool

[Ben from Vic.]

After reading the thread started by R.Archer to do with Festool discounting their sander in the US, I thought I'd ask you guys what you've found when it comes to getting the retailer to discount their stock.

I've been told many times by many retailers "we can't discount Festool".
When pressed I've been given two reasons.

1. We have to give Festool a copy of the recipt, and if they see that we've discounted an item, next time we order one they put the price up by the amount of the previous discount.

2. We have to give Festool a copy of the recipt, and if they see that we've discounted an item, they stop supplying to us.

Has anyone else come across this?

I mentioned this when I was on the phone to Festool once and they denied it, of course.

Is it just me, or is this price fixing, and therefore illegal? :mad:

The retailers don't seem to by to bothered by it as they have an excuse to charge full price and avoid any hagling. :(

What are your views and/or experiances?

Ben.

[zymurgy]

I came across exactly the same thing. I priced the Festool 3mm sander recently from several locations, each and everyone was within a couple of dollars.

Several said the same thing (as above comments), when I mentioned that this was 'retail price maintenance' and therefore illegal, they shrugged their shoulders.

[lucky_rick]

Yep

Same story with me. The receipt line above rings a bell - I was given the same story. However when I bought the plunge saw from Carbatec it was during their annual sale and I got the 10% off. Go figure.

Regards
Rick

[TOMARTOM]

The only time I have been offered a discount on Festool, was from the Sales Rep that would sell demo stock, reduced by 30% and still have a 3 year Warranty. I think it is rare that these items are discounted. I would think that this is a significant part of there philosophy and marketing plan. Superior product, superior service (24hour) and fixed price.

Maybee ask the sales rep in your state if he/she has any stock that has been upgraded and old demo stock can be sold at a discount.
regards tony

[morry]

i heard a similar story from a bloke at work who finally decided he had made it in the world and was looking at a 3 series BMW. On asking the dealers for a better than list price he was told that thats the price and if you don't want it the 30 yuppies that will be in after you will. He bought an Audi A4 out of spite.

[bsrlee]

I've also heard the bit about price fixing. Also Festool seem to insist on a high level of stock being held by the retailer, so much so that at least one retailer gave Festo the flick a few years ago when they started pushing all this.

I can't see any retailer that stocks Festo stepping out of line, there is very little profit in power tools any time, specially with people like Bunnings around, and complaining that Festo at least let them make a living.

I like Festo, I have a cordless 9.6v that I bought 10 or more years ago direct at a wood show, but they have missed out on a few thousand dollars in retail sales because they won't let the retailer give a 'good customer' a discount.

If you REALLY must have a Festo tool, you could check out the UK market, but shipping is likely to kill any savings.

[Little Festo]

Got bargain prives on a planer, router and a saw from a local retailer selling off all of their Festool stock, about half price plus they threw in a free set of blades for the planer and some Festool jigsaw baldes. They also orded a few bits and pieces for me from Festool a few months later and are quite happy to order any other Festool accessories that I may need in the future, so it appears that Festool are still happy to supply them with their products/accessories. All have their 3 year warranties - ratified by Festool.

Peter

[Ben from Vic.]

:) Thanks guys.

Now I know that discounts can be had from time to time, I'll run the dripping tap method when I'm in the market for expensive tools.

Purchasing from England won't work as the tool cost as much over there as it does here + shipping.


Ben.

[mickey]

I have two festo sanders, have owned one of their cordless drills and own a new 1400 watt router, so i would consider my comments fairly informed. i did shop around for the routewr and got it for $790. List is $850, and the retailer insisted on giving me a dummy invoice for this higher amount. I went to buy another sander but could get next to nothing off it, so Festo must have the resellers bluffed. Today I bought a new 1/4 inch collet for the router and was slugged $77. This is price gouging, and as I will be in Europe for the next three weeks I will certainly be doing some price comparisons. Both Festo and the resellers are engagaing in resale price maintenance which is illegal under trade practices legislation because it rips off the consumer. By continuing to buy the product under these circumstances we encourage this high handed behaviour. If there is a substantial price difference I will let the retailer of the collet know and show him the invoices of any other products that i bought elsewhere becuse he supports Festo's illegal behaviour. My next step will be to wait until I need a few tools including a Festo and then insist every item on the invoice except the Festo be recorded at recommended retail price. After all, the only important thing to me is the total price. I would like to see the look on a retailer's face when I walked after waving a couple of grand in his face. The retailers are complicit in this, and should be warned that they are breaking the law every time they refuse to budge from Festo's prescribed price.

[zymurgy]

The ACCC ARE aware and looking into this. :cool:

[Ben from Vic.]

Can you share any more on that Zymurgy?

[zymurgy]

Suffice to say, I dropped the ACCC an email. They called and asked me about my experience. They wouldn't say anything except they were aware of the issue and it was being looked into.

Maybe others should follow suit.

[indmowing.com.a]

price fixing yes thats what it is, we also have the same problem in my industry if they are caught discounting the supplier will pull there dealership, its in nearly all of the tool industry i have been threatened that many times over the phone and yes that includes other dealers . thats why we set up a forum like this one to be able to talk about it and may be even boycott suppliers like this one u talk about power to the people. I will put our forum here but if u dont want it on here u can take it out of the post i would understand after saying that i would like to post your forum on our forum if i may .
alot of lawnmowing guys do wood work etc www.indmowing.com.au/forum

Thanks Dean Bartorelli

[indmowing.com.a]

iI would be interested what they have to say every time i complain they say put it in writing you send it of and nothing happens lol whats new

[holzwurm]

I bought my festo tools in Germany. Here also is the price politic very restrictive.
The dealers a forbidden to give lower prices, if they don´t wont to loose the festo products
under
Festo Germay you can compare the german prices (http://www.festool.de/)

regards
Rolf

[Ratbag]

What Festool is doing is proscribed under the Trade Practises Act as "Resale price maintenance"; meaning that they are dictating to resellers of their product the minimum selling price. This effectively stifles price competition between resellers, and while illegal under the provisions of the act, in reality it offers greater profitability to the inporter and resellers alike. This is a normal, perfectly legal (albeit immoral) practise within the German market place, and many German firms demand the same from their Australian retail network. Try getting a discount on Metabo tools or Miele whitegoods & you'll see what I'm talking about. Because it is both illegal and unethical in Australia the ACCC is finding it difficult to obtain sufficient evidence for prosecution: who will admit to deliberately breaking the law? Ultimately, it's up to us consumers to do somethjing about it: should we really be doing business with companies that are deliberately breaking the laws of this country, or who behave in unconscionable or immoral conduct?

[bitingmidge]

What Festool is doing is proscribed under the Trade Practises Act as "Resale price maintenance"; meaning that they are dictating to resellers of their product the minimum selling price. This effectively stifles price competition between resellers, and while illegal under the provisions of the act, in reality it offers greater profitability to the inporter and resellers alike......
....... Ultimately, it's up to us consumers to do somethjing about it: should we really be doing business with companies that are deliberately breaking the laws of this country, or who behave in unconscionable or immoral conduct?

I'm a bit between the devil and the deep blue sea on this one.. As a manufacturer if I had a premium product and wanted to keep it at the top end of the market, I wouldn't want discounters to devalue the perception that my customers had of exclusivity. I would be happy for my retailers to command a larger margin for my product providing they provided a level of service commensurate with the value of the product!

On the other hand, as a consumer, I can decide whether I want to pay a large premium just to have a premium "brand" product. So if I want to spend a lot more money on, say, BMW, Bose, Meile, Bang + Olufsen, Loewe, Festo, Rolex, Omega and so on...that is my choice as a consumer.

The trade practices legislation is a bit interesting to say the least. As a franchisee in a large chain, I can't talk to my neighbouring franchise to ensure our prices are consistent, but we can each talk to the franchisee, who can issue recommended prices to us.

Festo hardly has a monopoly, it's no grand conspiracy. If you don't like the price buy GMC?? What right have we (or the government) to dictate prices to ONE company that does not have a monopoly. If all the manufacturers (or even some) were clubbing together that would be a very different thing.

and anyway.... why is there only one monopolies commission???

:D :D :D
P

[zymurgy]

Your missing the point, Festool are commanding a higher price, not because of the quality, intrinsic value of the product or after sales service - but because they force the retailer to 'toe the line' - this then has a direct impact on the consumer.

This infact may increase the perception of an 'elite' product, but it's available almost everywhere - just not at a fair and reasonable price.

[jacko9]

I met with a Festool representative today and inquired about the price of a jig saw and I was told all dealers must sell them for the same price or they will lose their franchise to sell Festool.

If that's not price fixing, I don't know what is but, look out for the next administration (Obama/Biden) they will fix this unlawfull activity.

[Honorary Bloke]

I met with a Festool representative today and inquired about the price of a jig saw and I was told all dealers must sell them for the same price or they will lose their franchise to sell Festool.

If that's not price fixing, I don't know what is but, look out for the next administration (Obama/Biden) they will fix this unlawfull activity.

There, I hope you feel better. Now have a Bex and a liedown. The age of this thread should tell you something. Festo is still doing business on the same marketing plan and intends to carry on with it. [BTW, the Supreme Court has already held that it is NOT price fixing, so don't hold your breath.] :wink:

[routermaniac]

As much as my pocket doesn't like it, I think Festools policy of fixed prices is reasonable and helps maintain the value of their products.

Instead of getting caught up in a ridiculous price war like most other tool companies and then compromising on quality to maintain profits, they build bloody good tools at a price.

The only thing that annoys me is how the yanks seem to get everything for a lot less :((, but that is not unique to festool...

regards

Marios

[Rubber.Piggy]

Guys, price fixing is when two (or more) competing companies collude to sell their products at the same price so they don't have to compete.

One company setting a price for it's own products is not price fixing and is reasonably common practice. In fact it, means that no matter where you go you know how much it will cost.


My own opinion is that I buy Festool products because they are far superior and for that I pay a very high price :( If I want a cheap tool I buy a Makita. You can't get a Porche for the price of a Falcon.

Second is I have never had trouble finding retailers who compete on Festool pricing. I have even had the Festool rep tell me which stores will. The following are places I have bought Festool tools at less than rrp:
- Total Tools Industrial in Moorabbin (Melbourne)
- Combined Electrical in Canberra
- Sydney Tools in Alexadria

Hope this helps you find some cheaper Festools.

[Sparhawk]

Nintendo is the same. Retailers are not allowed to discount the Wii, so it all comes down to what "extras" you get thrown in with the bargain (eg extra controller, free game).

[Sturdee]

One company setting a price for it's own products is not price fixing and is reasonably common practice.

But forcing retailers to sell at a fixed price is retail price maintenance and that is illegal.

The only way Festool gets away with it is because through "convoluted mechanics" you actually are purchasing from Festool direct (through the retailer who gets a fee for that) and not from the retailer.

Peter.

[Rubber.Piggy]

But forcing retailers to sell at a fixed price is retail price maintenance and that is illegal.

The only way Festool gets away with it is because through "convoluted mechanics" you actually are purchasing from Festool direct (through the retailer who gets a fee for that) and not from the retailer.

Peter.

Yes you are right, but as you pointed out there is nothing illegal going on because the supplier is not the retailer. Many manufacturers of premium/low volume products do this, Miele is the only one I can think of off hand (Sparhawk suggests Nintendo). The supplier is paid to display the stock in their store, but they are not selling it, Festool is.

This not only allows the company involved to have a uniform price but also allows them to provide uniform service, delivery, installation and support direct to the end user. It also allows them to control the stock, i.e. if you display Festool you must display it all. Which is why you always get to see the whole range in a place that sells Festool.

I don't mind the system because it means I get to deal directly with the manufacturer instead of some jack of all trades retailer. When I have needed my Festools serviced this has been invaluable.

Also don't forget that a uniform price stops mark ups as well as mark downs. The only tool store in town can easily mark up the prices, but not on a Festool.

[Greg Q]

Yes you are right, but as you pointed out there is nothing illegal going on because the supplier is not the retailer. Many manufacturers of premium/low volume products do this, Miele is the only one I can think of off hand (Sparhawk suggests Nintendo). The supplier is paid to display the stock in their store, but they are not selling it, Festool is.

This not only allows the company involved to have a uniform price but also allows them to provide uniform service, delivery, installation and support direct to the end user. It also allows them to control the stock, i.e. if you display Festool you must display it all. Which is why you always get to see the whole range in a place that sells Festool.

I don't mind the system because it means I get to deal directly with the manufacturer instead of some jack of all trades retailer. When I have needed my Festools serviced this has been invaluable.

Also don't forget that a uniform price stops mark ups as well as mark downs. The only tool store in town can easily mark up the prices, but not on a Festool.


There's a lot in your comments that deserve a reply, but I don't want to perform an examination of the law's intent, which is clearly to allow unfettered market forces determine price. You are obviously smart enough to figure it out, despite your stated position.

Now, on mark-ups: The world that I inhabit is full of information. This information makes me free to vote with my feet. When I bought my CT-22 the salesman told me that if it wasn't for the price fixing he'd charge me more because I wasn't trade. I offered him a free kiss of my ass while walking out to buy it online for less. See how that works? The "only store in town" thing does not work in an era of global shopping.

[Groggy]

Interesting how these discussion go isn't it? I read often people complaining about bank profits too, because $4b looks like a big number. In fact it represents a 10% return on assets, which investors would hope for. But people still want bank charges dropped.

This is really quite strange, given that the companies where they buy their groceries made a 27% return last year, and people put more money into groceries than the banks, yet no-one screams at them to drop the prices of their goods. Maybe Festool should sell from grocery stores, then no-one will mind :U

[alanm]

You could go to Carbatec Melbourne next week 13-18 Oct and save 5% on Festool or 20% on some Festool drills.

5% isn't as good as their 10% a few months ago when I bought a couple of Festool items, but at least they are still giving it a go.

[Shedhand]

I have to say all my purchases of Festool have been discounted - if not in cash in free accessories or heavily discounted consumables at least.. The trick is to build a good relationship with 1 dealer (in my case 2 because I have homes in both the North and South of the state). The old maxim is true in small business, "superior service builds repeat business". You won't find Bunnings or Mitre 10 lending you a power tool for the weekend so you can try before you buy as I did with my local Festool supplier (a Trion Jigsaw which I bought).

[LGS]

I have to say all my purchases of Festool have been discounted - if not in cash in free accessories or heavily discounted consumables at least.. The trick is to build a good relationship with 1 dealer.

Very sound advice, Shedmeister!
I don't think I've paid full retail for anything Festoolic (sanding pads, saw blades, tools) for over 12 months. I always buy at one dealer.

Regards,

Rob

[MultiplexMan]

I have been a Festool user for over 10 years. My entire wood section of my workshop is Festool with the odd other brand. Almost all items have been purchased from the one store.

In the past I have timed my purchases to coincide with the "sales" and bundled a Festool purchase with "another brand" purchase.

I thought I had a good relationship with the store. :?

In this last fortnight I have noted no flexibility in pricing citing the coming price increases. I asked re floor stock and was given the same line. :~ Same story at a number of other Festool outlets in Sydney.:no:

It was a simple decision to make. I just declined to purchase, kept my 5K in my pocket, and will keep my current tools in play. :cool:

[rodney]

Ladies and Gentlemen

I came across this the other day and thought it belongs to this thread,
http://www.accc.gov.au/content/index.phtml/itemId/781439

[Honorary Bloke]

Ladies and Gentlemen

I came across this the other day and thought it belongs to this thread,
http://www.accc.gov.au/content/index.phtml/itemId/781439

Old news. Festool is now in compliance.

[Ben from Vic.]

Old news. Festool is now in compliance.

I didn't know about this, so Festool will no longer presure retailers not to discount?

Now they should turn their attention to Miele.:rolleyes:


BTW, I am aware that not discounting may have suited some of the retailers.

[Honorary Bloke]

I didn't know about this, so Festool will no longer presure retailers not to discount?

Sort of. You can discount the tools, but if you do we will pull your franchise to be a dealer.
All perfectly legal. Works the same here in the States.

[old pete]

Hi Ben,

Your items 1 and 2, if correct, would both constitute an offence under the Restrictive Trade Practices Act.

Some of the other responses to your thread from others are potentially libellous to Festool.

Take care what you write folks unless you want to accept the risk of being called upon to support your statements in a more formal, and far more costly, forum than this one:oo:

Old Pete

[Honorary Bloke]

Hi Ben,

Your items 1 and 2, if correct, would both constitute an offence under the Restrictive Trade Practices Act.

Some of the other responses to your thread from others are potentially libellous to Festool.

Take care what you write folks unless you want to accept the risk of being called upon to support your statements in a more formal, and far more costly, forum than this one:oo:

Old Pete

Seeing as how we have had this discussion about a squillion times over the past 3 or 4 years, as how I am personally acquainted with a number of Festo dealers, and as how Festo knows how to run their business, I think I'll take my chances. :rolleyes::D

[Ben from Vic.]

Perhaps now would be a good time to point out that I started this thread in mid '04.

Ben.

[Honorary Bloke]

Perhaps now would be a good time to point out that I started this thread in mid '04.

Ben.

Yeap. :D:D And I mentioned that in Post 20, but it just hobbled along anyway. :p:p