Thread: Festool Price Maintenance...or not?

Festool is owned by TTS Tooltechnic Systems a holding company which is too small to rate on the chart. They are the ones that purchased Sawstop.

Originally Posted by derekcohen

Who is the parent company of Festool? They also purchased Sawstop. I do not see them featured in the companies above. Is this relevant?

Regards from Perth

Derek

They have a stranglehold of 0.78% share of the market

That's what I thought. Clearly strongly supported in their niche market.

Regards from Perth

Derek

OK, a straight question to all, if Festool were to be told not to fix the retail price what do you think would happen

Would prices rise or fall

How much would it vary from where it is now

Would it make the brand more affordable?

​If nothing significant would happen then why all the angst being displayed here?

I agree, nothing significant would change. There may be some retailers that may choose to pass on some savings to some customers (at the expense of margin), but that's unlikely in my view. Again, the distributor / importer buy price and the wholesale price are not going to change as the only thing that is subject to the RPM is the retail price.

Originally Posted by Chris Parks

OK, a straight question to all, if Festool were to be told not to fix the retail price what do you think would happen

Would prices rise or fall

How much would it vary from where it is now

Would it make the brand more affordable?

​If nothing significant would happen then why all the angst being displayed here?

Well I would think that the situation would go back to what it was where some dealers exercised a bit of wriggle room. For example, when Carbatec had their annual biannual?) sale you could get 10% off everything. Festool is now exempt from that discounting.

10% discount is nothing to be sneezed at - it's how I was able to buy the first tool (Kapex). That makes the brand 10% more affordable every now and then. That discount bought me another $185 of tools when I was just beginning to set up my shop so it was quite significant.

All that would be left then would be to iron out the excessively priced goods to the point where they are not worth importing (say THERE'S an idea!) - particularly accessories and consumables, and Bob's yer uncle, all these discussions wouldn't take place because we would then have the option of paying a premium but fair price for a premium tool.

I think it would be a good marketing exercise, to be honest, because there would be no reason for any of these threads to start up a couple of times per year. It's bad publicity that (with smart marketing) can be turned into good publicity whilst still maintaining the premium status for people to aspire to. The more they penetrate the market the more tools will be seen in action by people.....and because prices would be on the whole more attractive then more people would aspire to them and try to make it happen......which further increases tools exposure to mates in the market place.

TTS people, if you're watching, I'll shamelessly accept a tool in return for that little marketing gem.

A point to note is that it can be very painful indeed to keep a consumable consuming Festool running - but it is not as painful as it once was - it used to be agony. Yes there are other examples, but this discussion is about Festool.

Originally Posted by poundy

I agree, nothing significant would change. There may be some retailers that may choose to pass on some savings to some customers (at the expense of margin), but that's unlikely in my view. Again, the distributor / importer buy price and the wholesale price are not going to change as the only thing that is subject to the RPM is the retail price.

Agree
The pricing on the mainstream brands varies by only a couple of dollars between retailers unless they are having a promotion going which is run by the suppliers not the retailer.
Festool still does that though , I got a free extra track with my tracksaw on a promotion they were running which was good

Originally Posted by FenceFurniture

Well I would think that the situation would go back to what it was where some dealers exercised a bit of wriggle room. For example, when Carbatec had their annual biannual?) sale you could get 10% off everything. Festool is now exempt from that discounting.

10% discount is nothing to be sneezed at - it's how I was able to buy the first tool (Kapex). That makes the brand 10% more affordable every now and then. That discount bought me another $185 of tools when I was just beginning to set up my shop so it was quite significant.

All that would be left then would be to iron out the excessively priced goods to the point where they are not worth importing (say THERE'S an idea!) - particularly accessories and consumables, and Bob's yer uncle, all these discussions wouldn't take place because we would then have the option of paying a premium but fair price for a premium tool.

I think it would be a good marketing exercise, to be honest, because there would be no reason for any of these threads to start up a couple of times per year. It's bad publicity that (with smart marketing) can be turned into good publicity whilst still maintaining the premium status for people to aspire to. The more they penetrate the market the more tools will be seen in action by people.....and because prices would be on the whole more attractive then more people would aspire to them and try to make it happen......which further increases tools exposure to mates in the market place.

TTS people, if you're watching, I'll shamelessly accept a tool in return for that little marketing gem.

A point to note is that it can be very painful indeed to keep a consumable consuming Festool running - but it is not as painful as it once was - it used to be agony. Yes there are other examples, but this discussion is about Festool.

In other words it would remain a premium brand with very little chance to make it truly affordable because the wholesale price into this country is not affected by the legislation that controls the RRP.

Originally Posted by Chris Parks

In other words it would remain a premium brand Yes, as it should
with very little chance to make it truly affordable because But what is "truly" affordable? Different things to different people's budgets and purposes. That definition is too subjective. E.g. to many people in Europe or USA, they will never be truly affordable, but they get the best prices of the whole world.
wholesale price into this country is not affected by the legislation that controls the RRP.

Indeed it is not, but the wholesale price into the country ain't the problem. The problem is the markup in the middle of the equation.

I know of a 30 people at least who have spent an average of $5000 at German prices with one person alone spending $20,000+ in one hit (AND he's used naff all of it in three years, AND he's a so called perfessional - he thinks he is, anyway.) They all thought that those prices were affordable, by definition. But those prices are much more than you would pay for Makita, Metabo or Bosch out of the same country.

Originally Posted by FenceFurniture

the wholesale price into the country ain't the problem. The problem is the markup in the middle of the equation.

with all due respect, unless you have insider knowledge, you can never know that.

Originally Posted by poundy

with all due respect, unless you have insider knowledge, you can never know that.

That's right.

Originally Posted by Chris Parks

OK, a straight question to all, if Festool were to be told not to fix the retail price what do you think would happen

I hope this doesn't come across the wrong way - I will do my best to express in text what I think - and I apologise for quoting only 1 line, but done simply for brevity. Also, my comments and opinion not aimed at anyone - I am delighted to agree to disagree, and respect everyone's opinion on this topic

First, I will share my personal thoughts on Festool pricing here in AU as compared to overseas. I was not aware, as FF had pointed out, that local dealers are not bound by retail price as they are here. That said, I am not sure if a fair price comparison can be made by taking a product off a German dealer site, stripping away taxes, converting the currency, adding an allowance for shipping and making a price comparison. I feel this ignores the fact that any business bringing in consumer goods will pay customs fees (which an individual on a single purchase under AUD$1000 will avoid), and will pay GST (again, avoidable for the individual bringing in a single item at a time). To be sure, that doesn't account for *all* the price difference, but it surely makes it a bit more comparative.

As for our market price versus the rest of the world (consider too that exchange rates always fluctuate a bit), and I really don't see the massive differences of the past. Yes, there WAS a big difference, heck, my own DTS400 is the 240V GB version because it was worth it to bring it over for a period of time.

My impression *today* is that there is reasonable price parity, my previous impression of a few years ago was there was an unequal price for different markets.

I don't know what taking away the price fixing in AU would do - dealers would from time to time then run specials. I am sure Festool themselves would not suffer, as they won't be lowering wholesale cost in any way, so I guess we could be sure that the brand will still be built to a quality level as opposed to being built to a price (which is a race to the bottom, the only doubtful part of it is how long that takes).

Would it make much of a difference? In the long run, I wouldn't think so - there will be specials from time to time, and outside of those, prices, and business, as usual would be my expectation.

Originally Posted by FenceFurniture

Indeed it is not, but the wholesale price into the country ain't the problem. The problem is the markup in the middle of the equation.

What is the actual markup? I've been trying to find it on the net and via a few people I know but so far have drawn a blank.

Originally Posted by Lignum

What is the actual markup? I've been trying to find it on the net and via a few people I know but so far have drawn a blank.

There is no set or uniform figure.