Thread: Festool Price Maintenance...or not?

Originally Posted by FenceFurniture

You still ignore over $500 worth of beer on the Domino set. Convenient huh?



Of the 9 Festools that I have retained none of them needed any attention in the first three years...... in fact none of them EVER starting from mid 2011. If one had needed work in the first three years I would still be waaaay ahead, so the warranty issue just isn't a problem. If it happens, suck it up.



Tell you what, how about you go and do some research eh? I know my arguments are correct and backed by research. Yours are either generalised, cherry picked, or straight up fallacious.



See below. And yes, it probably would, but it wouldn't solve the gouging thing and people would still buy overseas.



That's a ridiculous argument and you know it. You want to import a lounge suite?? Ikea is as cheap as chipboard in the first place, and the freight would cost more than the furniture. What will you suggest next - importing Hamburgers for lunch?



The difference is that Festool is dictating to the retailer as a business owner that they can't discount and that is anti-competitive, which is what the legislation was all about in the first place. If they dictate that to their own retail stores it's completely different - it doesn't affect the store manager because he doesn't have any vested interest - they are just employees. If there are just Festool stores then it's not anti-competitive! They are only selling Festool gear and are not competing with anyone. Just like McDonalds are ONLY selling McDonalds crap. Get it?



So, Beardy, do you think the whole legislation for anti-competitive price fixing should be tossed out?

Ok you have found an item with a $500 saving that is great and worth taking advantage of but on average across the board the differences are not out of kilter with anything else .

Yes I know you are not likely to have a warranty issue with a tool, regardless of brand I don’t recall having issues with much over the years but still I don’t think it is worth the hassle unless their is a big saving

I have done my research before on buying Makita tools from Amazon etc and there are bargains to be had compared to here in some cases but a lot of them require using a shipping agent. I haven’t tried that option yet

My IKEA example is not ridiculous at all, they sell thousands of small items you could easily ship but that was not my point my point was the principle of the business model. So you think just because it is too hard to freight a lounge that the same rules don’t apply. I am arguing on the principle, the product type is irrelevant as is their pricepoint in the marketplace
So you are saying that because Festool is at the premium end of the market they are not allowed to have firm pricing but if they were at the Ryobi ( IKEA ) end of the market it would be fine because it is still affordable in your eyes. Again it is about the principle not the price. All you are interested in is getting a bargain most of Festool’s consumers are looking for overall value

Hang on a minute, Festool is not dictating anything to the retailer they are both entering into a mutually beneficial agreement, nobody is making them sell their products, they already have a dozen other brands on the shelf.....but obviously some see the value to their business in doing so. That my friend is called freedom of choice. I recall earlier in this thread people were saying the retailer was cleaning up on the deal but you are saying that he is getting screwed?
Maybe the retailers are franchises of Festool? I am not sure of the legal arrangement but it is still a group of parties that are agreeing on terms of trade for their mutual benefit, part of which is to be consistent in the marketplace for the consumers. Whether that is done via third parties or company owned stores is irrelevant to the consumer, that is their chosen business model of how they want to to be perceived in the marketplace and I firmly believe they have a right to do that and I have the option to accept it or shop elsewhere.

No of course I don’t think the legislation for price fixing should be thrown out, I just believe in free trade and freedom of choice. When the banks, energy companies, fuel suppliers etc start colluding to hold prices that their whole industry benefits from they need to be dealt with but when a power tool, hamburger or lounge company says here is my product and this is how much I sell it for if you want one and here is where you can buy it I think that is just fine by me.
It is their product and they can do what they like with it and if the consumers don’t like it they will choose one of the many other options available to them.

That doesn’t sound unreasonable to me, it does to you? Remember we are talking about discretionary purchase items with many alternate options not essential services.

I reckon you might find it really hard to find a dealer who does not like the present arrangement.

Originally Posted by Beardy

Ok you have found an item with a $500 saving that is great and worth taking advantage of but on average across the board the differences are not out of kilter with anything else .

I have done my research before on buying Makita tools from Amazon etc and there are bargains to be had compared to here Well why don't you prove that with some examples?

All you are interested in is getting a bargain That's just crap and putting words in my mouth. I'm interested in a fair price without gouging. I have already said it's improving but there's a long way to go.

Hang on a minute, Festool is not dictating anything to the retailer they are both entering into a mutually beneficial agreement For most dealers the agreement (to be a dealer) was already in place and then Festool went to the ACC for the price fixing agreement.
I recall earlier in this thread people were saying the retailer was cleaning up on the deal but you are saying that he is getting screwed? I've never said either was the case. I'm saying the dealer can't discount if they want to.

Maybe the retailers are franchises of Festool? I very much doubt it. They would only be selling Festool in that case.

No of course I don’t think the legislation for price fixing should be thrown out, I just believe in free trade and freedom of choice. When the banks, energy companies, fuel suppliers etc start colluding to hold prices that their whole industry benefits from they need to be dealt with but when a power tool, hamburger or lounge company says here is my product and this is how much I sell it for if you want one and here is where you can buy it I think that is just fine by me.
It is their product and they can do what they like with it and if the consumers don’t like it they will choose one of the many other options available to them.

That doesn’t sound unreasonable to me, it does to you? Remember we are talking about discretionary purchase items with many alternate options not essential services.

So from that I think what you are saying is that essential services such as banks, energy companies, fuel suppliers etc should not be allowed to price fix, but that everything else, particularly discretionary expenditure items, are ok to have RPM in place? Is that right?

I have said time and again that if the prices were reasonable (that is without Stralia Tax) and with no gouging (and that is NOT on the part of the dealer) that this discussion would not be happening, but you keep ignoring that I have said that. The only reason it is happening is because Festool's pricing has been and still is to a great degree, notoriously high in Australia. If the pricing had historically been more in line with Germany, and allowing for our local adjustments such as freight and GST, then Festool in Australia would not have the reputation that they do. There have been countless discussions over the years on here - not about fixing but about the disproportionate pricing. You weren't around for them, but try searching "Festool pricing" or similar. There seems to be one every six months roughly.

You still haven't had a crack at explaining why, just as one example, the Systainer of Dominoes was $415 for years until perhaps 1-2 years ago and it is now $323, when at the same time the wholesale price was rising by around 3% every year. Why don't you try explaining that - I challenge you to as I'd be mighty interested to see how you explain that. Or why the Kapex 120 was the same price here for about 5 years, when the same wholesale price increases were happening elsewhere.

FenceFurniture's comments above are the real issue for me. Festool are allowed to price-fix in Aus, a practice I do not agree with. But then consumer protection in the EU/UK is quite a lot better than it is here in Aus, where what you get away with seems to depend on how many free lunches you buy the poli's, and much money you pay into election campaign coffers.

I know from experience that Festool AU are extremely rigorous in policing and controlling dealer pricing - I got a bit grumpy recently when I bought an ex-demo Kapex for a reduced price, only to find it brand new and for less $ in another dealer the next day. I made the mistake of complaining to the rep who arranged the demo deal, and they were in the offending retailer's dealership within the hour.

Incidentally, while Festool are blatant about it, there does seem to be some sort of price-control going on across the board when it comes to tools. Search for a DeWalt or Makita in any one of the big 3 - total tools, sydney tools and bunnings, and they're usually exactly the same price.

Originally Posted by FenceFurniture

So from that I think what you are saying is that essential services such as banks, energy companies, fuel suppliers etc should not be allowed to price fix, but that everything else, particularly discretionary expenditure items, are ok to have RPM in place? Is that right?

I have said time and again that if the prices were reasonable (that is without Stralia Tax) and with no gouging (and that is NOT on the part of the dealer) that this discussion would not be happening, but you keep ignoring that I have said that. The only reason it is happening is because Festool's pricing has been and still is to a great degree, notoriously high in Australia. If the pricing had historically been more in line with Germany, and allowing for our local adjustments such as freight and GST, then Festool in Australia would not have the reputation that they do. There have been countless discussions over the years on here - not about fixing but about the disproportionate pricing. You weren't around for them, but try searching "Festool pricing" or similar. There seems to be one every six months roughly.


You still haven't had a crack at explaining why, just as one example, the Systainer of Dominoes was $415 for years until perhaps 1-2 years ago and it is now $323, when at the same time the wholesale price was rising by around 3% every year. Why don't you try explaining that - I challenge you to as I'd be mighty interested to see how you explain that. Or why the Kapex 120 was the same price here for about 5 years, when the same wholesale price increases were happening elsewhere.

No I am not saying that, there is a huge difference

I am saying when an industry of companies colludes to maintain a price you have price fixing across several brands to artificially inflate the whole marketplace, that is illegal
When you have one minor player saying my price is not negotiable they are just being consistent with their market approach regardless of what the other 90 odd % of the market is doing. The only price they are controlling is their own product just like McDonald’s, IKEA and thousands of other businesses and franchises do in this country. You will find examples of this business model in every sector of commerce

Reasonable pricing?, you want to knit pick individual items out of different economies and expect them to be the same as here? Why don’t you do the same with food prices, rent, house prices wages you will see nothing is consistent
Why are Michelin tyres dearer here than O/S or Toyota parts or anything you want to look at. This pricing disparity is not a Festool exclusive thing, it is the norm regardless of whether they are negotiable on price or not.

I don’t need to explain your Systainer of Dominoes pricing nor does the supplier. There is no law to my knowledge that says “thow shall provide consistent pricing worldwide”, the markup on products in any shop vary, it is just you are not aware of it as a consumer.
I did offer one possible explanation previously in post 89.
“From my my experience in a different life, manufacturers/wholesalers do not offer consistent discounting across the board of their products. They will offer some high volume turnover lines that are priced keenly with less discount available on a different model.

In my case, when negotiating a pricing structure we would discuss the items that I was more likely to be using and the pricing would be focused on those items.
For instance there was a particular Smeg oven I bought a lot of and I had a client ask for a different model that at RRP was only $100 more but my buy price was nearly $1,000 more for that item. The same went for bricks, tapware, door furniture, doors, architraves and skirting etc.

So all is not what it seems when comparing apples with apples”

You seem to think you have a right to dictate and control how another company chooses to run their business, if you were in business would you think this is acceptable?
Supply and demand controls pricing just like it does wages , they move with market forces.

Porsche has a policy where they increase prices a couple of thousand dollars plus every year regardless and don’t openly discount as they are mindful not to undermine their clients and previous purchases and maintain their image as an elite brand. On the other hand companies like Mitsubishi etc are always spruking deals and massive savings which kills their value in the used car market. A different marketing strategy for a different type of clientele
When Nissan released the new Y62 Patrol they had a 120k plus price tag, the market didn’t like it and sales slumped and Toyota continued to get the business , twelve months later you could buy a brand new one off the floor for 60 odd thousand. The consumer market forces control the price.

You contradict yourself when you talk about the price, on one hand you are saying the retailer is getting screwed because they can’t discount but by discounting they are screwing themselves out of margin and on the other hand you are saying the consumers are getting screwed because they can’t haggle a bargain and yet think that the wholesale price is the same worldwide and that is ok.
Protecting their margin keeps the little tool shop suppliers in business against the big players. The $100 or so dollars difference in price if you could haggle is not going to change who buys their products as they will still be at a different pricepoint to the mainstream suppliers.

In a previous life I had a Miele dealership, I imagine the rules of the game with that would be similar to that of Festool.
I chose Miele for all the reasons you are complaining about. I had a product to sell that the marketplace knew it’s real value and I could provide a complete service to my clients without getting undermined on price by someone who was not. I had a product that my clients were looked after properly by the manufacturer and it was a product with a brand image comparable with my business. My clients were not price focused, there were plenty of cheaper options in the marketplace but were looking for a specific outcome and prepared to pay for it.

Remember to keep it nice and polite please.

Originally Posted by FenceFurniture

So from that I think what you are saying is that essential services such as banks, energy companies, fuel suppliers etc should not be allowed to price fix, but that everything else, particularly discretionary expenditure items, are ok to have RPM in place? Is that right?

I have said time and again that if the prices were reasonable (that is without Stralia Tax) and with no gouging (and that is NOT on the part of the dealer) that this discussion would not be happening, but you keep ignoring that I have said that. The only reason it is happening is because Festool's pricing has been and still is to a great degree, notoriously high in Australia. If the pricing had historically been more in line with Germany, and allowing for our local adjustments such as freight and GST, then Festool in Australia would not have the reputation that they do. There have been countless discussions over the years on here - not about fixing but about the disproportionate pricing. You weren't around for them, but try searching "Festool pricing" or similar. There seems to be one every six months roughly.

You still haven't had a crack at explaining why, just as one example, the Systainer of Dominoes was $415 for years until perhaps 1-2 years ago and it is now $323, when at the same time the wholesale price was rising by around 3% every year. Why don't you try explaining that - I challenge you to as I'd be mighty interested to see how you explain that. Or why the Kapex 120 was the same price here for about 5 years, when the same wholesale price increases were happening elsewhere.

Brett, there would be no practical difference if the price was not fixed, certainly not enough to make the tools an affordable buy for the average woodworker. A Kapex for instance would not suddenly be $1200 dollars for instance. This point seems to getting lost in all the argy bargy of the debate and also the fact that this debate happens in every market whether fixed RRP exists or not. The commentary world wide on Festool prices parallels our own in every country it is sold in so it is simply a matter of buy if you want and forget it if you don't, pretty simple really.

Beardy you are still trying to put words into my mouth, and I won't have it. I will call it out when it happens. I suggest you read and digest my answers a little more carefully before you reply.

Expressions such as:
"You seem to think you have a right to dictate and control how another company chooses to run their business". No, I just think that Festool should have to comply with the legislation like every other business (and you have cited several).

" you are saying the retailer is getting screwed " That is wildly inaccurate. I said they don't have the option of discounting. You can bet your life that some dealers would like to discount, particularly for some of their regular customers or someone who is spending a great deal in one hit. Look at Bernmc's example!!!

"on the other hand you are saying the consumers are getting screwed because they can’t haggle a bargain" Yes, I am saying that customers are getting screwed with a certain number of items, but it's not a bargain I'm seeking. I think that might be the third or fourth time I've said that so can you accept that that is case or not?

For the fifth(?) and final time:
A bargain is NOT being sought.
Prices that are the same as overseas are NOT being sought.
Prices that are commensurate with doing business in Australia, without any extra gouging ARE being sought.
I do NOT wish to dictate how anyone should run their business.
I DO think that Festool should be compliant with the legislation because I see no benefit whatsoever to the consumer.

Originally Posted by Beardy

I don’t need to explain your Systainer of Dominoes pricing nor does the supplier.

Because you can't without being forced to agree with me! Staying in denial doesn't make it so or prove/disprove anything. Quite simply, the explanation is this: they knew that there were being imported for significantly less than the cost here including freight (along with a helluva lot of other product - hundreds of thousands of dollars worth), and the word had gotten out. Ya see Beardy I have documentary evidence of prices here, USA and Germany for hundreds of the same products for every year between 2011 to 2016. Verified proof that I know what I'm talking about! I haven't kept records after 2016 because there was no need to. At the same time I have also given some credit for some of the prices coming down, or effectively coming down (by staying the same for years).

If I could be fagged - I could post gawd knows how many examples of products that have come down in price and PLENTY of others where the price is still way above what would be fair, with ALL things considered. No bargains as you keep on and on saying, just a fair price for an excellent tool.

You can either accept that I have the documentary proof of the pricing over the years that show what I'm saying is true (particularly in relation to prices slowly coming down here, and the reason for it), or not, but the latter would be calling me a liar. I should also say that there are dozens of members who also know (for a fact) that I know what I'm talking about, because they have seen those prices documented, and used that info to their advantage.

Perhaps Beardy, you should ask yourself how and why I know all of this. Perhaps you should wonder why I am not the flavour of the month or decade at Festool, and never will be. I've called out this pricing before, and done something about it. The Australian operation did something about that. So I did something different about it again, and so the game of cat and mouse progressed.

Originally Posted by Beardy

I did offer one possible explanation previously in post 89.

In no way did that address why the price of some Festool products had stayed elevated for years before eventually coming down to some greater or lesser extent. You were talking about Smeg ovens.


I am being fair and ambivalent in this discussion. You are just repeatedly trying to put words in my mouth or twisting around my responses, and ignoring requests for explanations because it doesn't fit with your argument.

Originally Posted by Chris Parks

certainly not enough to make the tools an affordable buy for the average woodworker. A Kapex for instance would not suddenly be $1200 dollars for instance.

I totally agree Chris, but you are quoting prices there that fit with Beardy's "bargain" description. That point is absolutely not lost on me because I have said similar numerous times.

Originally Posted by FenceFurniture

I totally agree Chris, but you are quoting prices there that fit with Beardy's "bargain" description. That point is absolutely not lost on me because I have said similar numerous times.

I must be missing something, the rest of the world complains exactly as we do as Festool is marketed as a premium brand and that fact lifts it out of the hoi poloi of the Makitas etc. So why do these complaints happen in other markets which do not have a price fixing policy?

FF I am going to leave this go as we obviously have different views on how the world does or should go around which I think is a good thing by the way.

You obviously have an axe to grind with the company and can’t see that their business model is no different to many other companies in different sectors of commerce. The fact they have continued with this business model tells me that your view is a minority one amongst their clientele
If there were huge margins being made in this niche part of the market I am sure we would be seeing other premium brands chomping at the bit to have a go at the gravy train, their absence suggests otherwise.

Just to be clear as the terminology is getting blurred in this thread. Price fixing is different to non negotiable firm pricing. One is illegal the other is a method of presenting your product in the marketplace.

Chris’s last two posts sum it up pretty well, if they did change their business model the difference is negligible and would not change their target audience for their products

Cheers.

Originally Posted by Chris Parks

the rest of the world complains exactly as we do as Festool is marketed as a premium brand and that fact lifts it out of the hoi poloi of the Makitas etc. So why do these complaints happen in other markets which do not have a price fixing policy?

I can't answer that, but apart from the Poms I can't see they have much to complain about in the USA or Europe. From MM's examples the USA seems to be even better pricing than Germany, even accounting for the prices from German (et al) dealers.

I suspect what you may mean is they are complaining about the fact that Festools are more expensive than, as you call it, the hoi poloi. If that is their complaint then it is ill-founded because they are premium quality tools, and I don't think anybody argues with that. In at least some of those other markets there are brands that compete with Festool, so extra extra pricing just won't work - too much COMPETITION!

Certainly the USA and Europeans can't complain about extra extra because they are the cheapest of all! The Poms used to have good pricing compared to here and Axeminster sold stacks of stuff to Australia as a result. I have no doubt whatsoever that the Australian operation complained to Germany about that because I know they have complained at least twice before, and as a result dealers were told they could no longer send stuff to Australia. (they can't do anything about consumables and accessories though as they do not have to registered for warranty). I suspect that Brexit may have done for them anyway.

In 2011 or 2012 the attitude of Festool.de was shown to be "couldn't care less" where the tools went from the German dealers. The dealer was able to send the Australian versions to here (like, with an Aussie plug). Where on earth did .de think those tools were heading? Greenland perhaps? They also advised Australia of the new tools that they (Aust) had to warranty. Aust then sent me emails to confirm that the tools were under wty. That musta stung! That formed the basis of the first complaint that I knew of. All along I had just considered that there would be no effective wty.

I tripped over this on Reddit today and thought people might be interested: https://pressurewashr.com/tool-industry-behemoths/

That is interesting to see, I was initially surprised at Bosch’s position but then realised it included Siemens and their white goods.
Surprised to see Hilti above Makita, I have owned a number of their industrial tools and they are good but recently got to sample their 18v cordless range and was underwhelmed with their performance.