Thread: Festool Market Strategy

Originally Posted by woodPixel

A fascinating thing about German companies is the concept of Mittelstand.

They are more interested in core long term socially responsible (and society-wide) actions than short term profits. Its a fascinating concept and worth the time to read up on.
Its excellent economic theory to consider when combined with capitalism. We studied it at uni in one course (30 years ago!), but I wish I remembered more and/or paid attention.

Originally Posted by Spyro

Ιt's not just philosophy, there are many private German brands like that in various industries, Festool, Leica, Zeiss etc, and they're sometimes stuck from a practical perspective. They don't want to shift production to Asia because a lot of their customers buy their product because it's made in Germany,

The concept of Mittelstand is sound socially, economically, and environmentally. Our modern economy is based upon throwaway, or quickly dated items as we are bombarded by advertising to need the latest "must have" item / service / accessory …..

The telco industry is a prime example, perhaps a product life of 2 to 3 years at max before it is out dated, or new technology is available, or there is now a "new" colour!.

From an environmental perspective, many of the "low end" tools we purchase quickly end up as landfill; mid-range stuff lasts a while longer but spare parts / batteries are "no longer available"; but the high end stuff is backed by service and support. Try purchasing a genuine Makita 1220 replacement battery?

I think Festool is probably bigger than a typical Mittelstand company

It is true though, I have a couple of friends who came from Germany to work in Aussie corporations and they were pulling their hair out.
Lots of differences in mentality. Then they both got paid big bucks and they stopped whinging

Originally Posted by Midnight Man

I'd love it if someone could point me to a Festool dealer where the expertise and pre and post sales service justifies the tool price. I really don't mind paying a bit extra to get great service, expertise and/or advice, I just haven't found it yet.

I'm not saying this to rag on Festool, I like their stuff, because I'm sick of cheap stuff that doesn't work from Faroffistan (I'm too old and cranky to put up with crap), but so far any place I've dealt with hasn't shown me any difference in expertise or pre sales information from buying any other brand/item.

Chris and his team at the Toolhouse Sth Dandenong
I can try every tool before buying ( premium dealer) where else can you do that.
I don’t even have to go in anymore I’m regularly visited by staff asking what i need.
if one of my Festools has an issue (and it does happen) replacement tool while being repaired.

Originally Posted by fubar

Chris and his team at the Toolhouse Sth Dandenong
I can try every tool before buying ( premium dealer) where else can you do that.
I don’t even have to go in anymore I’m regularly visited by staff asking what i need.
if one of my Festools has an issue (and it does happen) replacement tool while being repaired.

Thanks Fubar - it's good to know one exists I probably should have started a separate thread for that question, but it actually would be useful to find a few of these better dealers around the country that we can choose to support.

Unfortunately for me, South Dandenong is a little far to travel to pick up a power tool and test it

Originally Posted by Midnight Man

Thanks Fubar - it's good to know one exists I probably should have started a separate thread for that question, but it actually would be useful to find a few of these better dealers around the country that we can choose to support.

Unfortunately for me, South Dandenong is a little far to travel to pick up a power tool and test it

come on, if you can afford Festool you can afford the flights and accommodation

One thing is price fixing by a manufacturer. Miele does that here in NZ as well. Which is why no Miele products (other than the fridge and freezer pidgeon pair combo that we DID get at a discount) went into my new kitchen. I got Neff (every bit as good) and German made Bosch. Screw Miele if they want to sell their stuff at pharmacy prices. Same reason I have avoided Festool so far - I don't think they're 200% the quality of Bosch Blue or Makita.
Incidentally I am not a cheapskate, I usually buy top of the line power tools and appliances. I just hate anticompetitive behaviour. But also, I like to buy leading edge before bleeding edge, where you get 5% better performance for double the price.

But why I am weighing into this discussion is something other, and that's distributors. I just looked around for prices for a Domino. I might want one, so I am exploring. German price - around 800 Euro for a 500 -- I can get one sent out with all accessories for 1500 NZ$ including postage. NZ local price is ~1700 without accessories. Not TOO unreasonable. Unlike Bosch Blue that is grossly overpriced here. The Jigsaw I bought was 200 euro but would cost over 600 NZ$. That is an obscene markup.
And then I looked at Ebay.au and the domino 500 was priced at 3000 AU$ ?!? That can't be for real, surely?

By and large, I think a lot of the fleecing that we're experiencing Down Under is from distributors and importers. I remember an acquaintance relating how a company she worked for was importing an item for 90cents and reselling for $15.70.

-Peter

Originally Posted by P.W.H.

One thing is price fixing by a manufacturer. Miele does that here in NZ as well. Which is why no Miele products (other than the fridge and freezer pidgeon pair combo that we DID get at a discount) went into my new kitchen. I got Neff (every bit as good) and German made Bosch. Screw Miele if they want to sell their stuff at pharmacy prices. Same reason I have avoided Festool so far - I don't think they're 200% the quality of Bosch Blue or Makita.
Incidentally I am not a cheapskate, I usually buy top of the line power tools and appliances. I just hate anticompetitive behaviour. But also, I like to buy leading edge before bleeding edge, where you get 5% better performance for double the price.

But why I am weighing into this discussion is something other, and that's distributors. I just looked around for prices for a Domino. I might want one, so I am exploring. German price - around 800 Euro for a 500 -- I can get one sent out with all accessories for 1500 NZ$ including postage. NZ local price is ~1700 without accessories. Not TOO unreasonable. Unlike Bosch Blue that is grossly overpriced here. The Jigsaw I bought was 200 euro but would cost over 600 NZ$. That is an obscene markup.
And then I looked at Ebay.au and the domino 500 was priced at 3000 AU$ ?!? That can't be for real, surely?

By and large, I think a lot of the fleecing that we're experiencing Down Under is from distributors and importers. I remember an acquaintance relating how a company she worked for was importing an item for 90cents and reselling for $15.70.

-Peter

A pommie Carpenter I have worked with who uses Festool products recently went back to the home country for his brothers wedding. Festool works out no cheaper there than buying here but he bought up on a lot of quality hand tools that were worth buying. Just had to remove them from their packaging and dirty them up a bit so that they did not attract duty.
Just as a point of interest Miele are the largest privately owned appliance company in the world.

About 18 months ago, I was in the market for a Domino DF 500 (primarily to save time building a kitchen). The local price was around $1500. On-line (via eBay) was $900 including shipping costs from the UK (all that was needed was to change the plug). At that time it slid under the import duty cut off. HOWEVER, there then is the issue of warrantee - this is not recognised across countries by Festool - which is another way of enforcing local purchase and protecting their assigned agents.

Regards from Perth

Derek

Originally Posted by P.W.H.

And then I looked at Ebay.au and the domino 500 was priced at 3000 AU$ ?!? That can't be for real, surely?

It is, and I've seen this before. It's a fishing expedition for this seller.

This is only my opinion, but I think they're listing readily available items at grossly overinflated prices in the hope of getting someone who hasn't done their research or isn't price-aware to click and buy. I would warrant that if they get a buyer, they'd be off to their local tool store pronto to buy the item to ship it out. You can be reasonably certain these chaps aren't Festool authorised distributors

Perhaps the tools and accessories should be labelled?

"This item has been granted exemption from price competition for 12 months".


.... consider what would go through the potential buyers mind.....

You know, I keep coming back to the reasoning of WHY pricing competition was implemented in the first place. It's interesting economic theory.

I can't understand why such exemptions aren't labelled as such. It is not possible for a consumer/buyer to properly assess the merits of the purchase without this information being present. The decision dynamic would be different if this were known. It's a shame that the sales figures are private (maybe they SHOULDN'T be for such exemptions).

I keep coming back to the same point, why does everyone complain about the pricing when there is an easy fix, just ignore it and buy other brands. Festool simply is not worth even looking at when buying tools if you are looking for value, Bosch Blue may be made in China but it is big step up in value for money. We have these threads at least once a year with everyone saying the same stuff including me, go back to the last one and see if I'm wrong. If Festool products had 10% taken off them who here would buy something? Not me they would still be overpriced and 10% of their retail prices would be a fair bit of money. Go to a Festool forum and see how many think the Kapex is a good thing, even the converted don't seem to think so.

Chris,

You seem to be really against Festool and you are of course entitled and welcome to your opinion. I think that Festool make great tools and I like that they still seem to be focused on making high quality tools and manufacturing in Germany, not chasing rock bottom costs/prices. At first I was a little annoyed about their exemption from the price-fixing laws but after a little while I don't have an issue with it if it helps their profitability and in so doing allows them to continue offering the highest quality tools they can make. I do wish they had consistent pricing between countries though but that's another matter.

On Bosch Blue - I am actually sad to see that they have moved away from manufacturing in Germany and Switzerland and reducing their prices as I believe that quality has suffered in recent years.

I have several Festool tools and would buy them all again, at Aus rrp if I lost them, except for maybe the Domino 500 - which I rarely use. I think I'll also be buying one of their Ets EC 150 sanders soon... so there are people who will buy their stuff .

The benefit of the rrp price maintenance for the consumer is I don't need to worry about shopping around and/or haggling etc. Just go into any shop or order direct from Festool and know I couldn't have got a better deal.

I assume that Apple must have the same exemption?

Cheers, Dom

Originally Posted by P.W.H.

And then I looked at Ebay.au and the domino 500 was priced at 3000 AU$ ?!? That can't be for real, surely?

No, it's not. Forget ebay, it's not indicative of anything, some normal people sell there at normal prices but lots of smartarses as well.

I don't get the made in Germany argument to be honest. I don't really care where things are made, I only care how they're made.
China: you get what you pay for, they are perfectly capable of making top quality stuff, for a price. Your iphone is mostly made in China. Components for almost everything are usually made everywhere.
Categorising stuff based on country of origin made sense 20 years ago, things are much more nuanced today.