Thread: Has anyone noticed the price of tools?

Well Festo aren't complaining, it makes their prices look better (having spent $1400 on Festo this month). I have noticed that prices of power tools and stationary machinery have been rising fairly steeply lately, the old problem of when the dollar gains value the prices rarely drop, and then when it plunges the prices rise by more than the difference.

Some operators are on a thin margin but others aren't, their success or failure depends on whether the number of buyers is fixed regardless of price - what number of people will buy their product regardless of the price, or will more people buy if the price is lower, and is the total profit from more sales greater than the profit that can be gained from the must-have-it crowd. The problem is guessing where the limit is for the serious hobbyist.

For mine, the raise the prices regardless to maintain overall profits is one certain way to go bust, and it has been (1920-30's) the way into a deep depression.

Bunnings still sell some cheaper brands of tools. The great thing with GMC was, it kept the prices of other tools, being made by other manufacturers, from going throgh the roof.

Originally Posted by munruben

Bunnings still sell some cheaper brands of tools. The great thing with GMC was, it kept the prices of other tools, being made by other manufacturers, from going throgh the roof.

Absolutely. They also had a big profile through their marketing efforts which put real pressure on the rip off merchants.

Not only have the prices of powertools gone through the roof but what I noticed was that in the last 18 months or so there, seems to have been a significant quality increase in GMC tools. The competition of the relatively cheaper end of the market has gone back to being very ordinary and basic in terms of quality. I am sure that people like Ryobi was very glad to see the demise of GMC as their prices in Bunnings are at least 25% higher than they were when GMC was a serious competitor. Does anyone know whether anyone is importing the tools rebadged from the manufacturer that GMC was using? I have noticed a couple of new lines in Mitre 10

Yep. It was a sad day when GMC closed it's doors for me. They made some pretty decent tools for the price. Now we are left with junk like ozito and ryobi to chose from. Ryobi won't ever get my business though and ozito will have to do for the "throw" away/use once in a while tool category. How I do miss GMC....

Originally Posted by bsrlee

Well Festo aren't complaining, it makes their prices look better (having spent $1400 on Festo this month).

People who bought GMC wouldn't of bought Festool in the first place. Completely different markets so it doesn't really matter how "better" the prices look in comparison :lol:. Even with the price bump people wouldn't buy Festool if they were not inclined in the first place.

I also think there is some profiteering going on at the expense of the GFC as an excuse. Our dollar fell initially which made retailers boost prices as an excuse but now the dollar has gone up they are quietly ingnoring it and charging as if our dollar was once again at 59c. Now that our dollar has gone up and the US is struggling it might be a smart time to import some tools in from the US once again. I'll look into that going forward. Globalisation is starting to work for the consumer for the smart shopper rather than just business.

Actually, I should have said in my previous post:

Its not just tools that have gone up strangely. I was shopping for a basic wok-like pan for use on the electric stove top - aluminium, non-stick, flat bottom. Was I surprised! The prices have at least trippled since I last looked, and even the cheapest Target offering is MORE than the price of a Breville self contained wok/frypan that includes its own heating elements, lid & accessories in a box!

Something is going very weird in the marketplace when that sort of pricing occurs.

Originally Posted by montiee

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I also think there is some profiteering going on at the expense of the GFC as an excuse. Our dollar fell initially which made retailers boost prices as an excuse.

As a retailer i would agree with you......but its not up to us as the retailers to adjust the prices when the suppliers havent adjusted our costs.

We had to take multiple price rises at the start of the year with the Australian dollar dropping from suppliers some were even up to 35%. Now that the Aud has come back up we are still to see a price drop

We had the same thing happen to us when petrol prices, alot of suppiers took the chance to bump up prices again stating the freight costs went up some even changed the FREE INTO STORE buy in from $100 to $1000,so if we didnt have the order at $1000 + we would be charged freight

Since both increases from suppliers (petrol or dollar excuse) we are still to see a price drop

I can definately promise you the only people making money in the retail sector in tools are the suppliers as they are able to adjust there costs on their products with us having no choice in the matter. On most powertools a retailer makes 5-15% average gross profit, makes it hard when most increases have been from 15-35% over the recent months

Originally Posted by VEK TOOLS

As a retailer i would agree with you......but its not up to us as the retailers to adjust the prices when the suppliers havent adjusted our costs.

We had to take multiple price rises at the start of the year with the Australian dollar dropping from suppliers some were even up to 35%. Now that the Aud has come back up we are still to see a price drop

We had the same thing happen to us when petrol prices, alot of suppiers took the chance to bump up prices again stating the freight costs went up some even changed the FREE INTO STORE buy in from $100 to $1000,so if we didnt have the order at $1000 + we would be charged freight

Since both increases from suppliers (petrol or dollar excuse) we are still to see a price drop

I can definately promise you the only people making money in the retail sector in tools are the suppliers as they are able to adjust there costs on their products with us having no choice in the matter. On most powertools a retailer makes 5-15% average gross profit, makes it hard when most increases have been from 15-35% over the recent months

Some good info/reasoning there.
I share the same general sentiment but at the same time I imaging that suppliers who ordered in stock when the $ was low still have to sell it out before ordering new stock at cheaper prices. Not familiar with how warehousing works and how cost prices are/aren't averaged etc but this seems to be a factor worth considering.

Still, for us as consumers it sucks regardless and no doubt there are opportunities that are exploited by some at all points of the process.

G'day all,

These days even wholesalers generally don't keep large stocks regardless of what they would have you believe. Generally wholesalers use the "just in time" methodology, relying on a constant supply from the manufacturer. Most wholesalers would not keep more than 2 - 4 weeks supply of an item based on actual stock flow. Having been an importer, I know that most importewrs are very aware of currency fluctuations and are loathe to keep a lot of stock. Usually claims of "needing to get rid of old stock first" are simply that, a claim in support of price gouging, which do not reflect the reality in the warehouse. Any one that runs their business with months supply of stock is stupid and should not be in business. Aside from that, the prices that importers are actually paying in china for products leave a LOT of scope for price flexibility. It is really all about greed.

Yeah prices have increased. Good thing for me thou is that at the moment I do not have the funds to purchase anything.

Originally Posted by Bitslong

Not familiar with how warehousing works and how cost prices are/aren't averaged etc but this seems to be a factor worth considering.

Swings and roundabouts really. When they had the cheaper stock they didn't sell it for the cheaper price but jacked up the price of goods immediately. Now that the dollar is back up however it'll be years before anything drops if retailers have there way. Warehousing like alot of things is a bit of a joke excuse. Even when tools were "cheap" we were paying much more than our overseas counterparts with similar costs of living. I ordered all my cordless kit in from O/S and saved hundreds despite shipping costs. Aussie business just like to pass the buck and blame everyone but themselves. Fact of the matter is that profiteering has been going on in excess of what one could deem reasonable when it comes to tools and quite frankly alot of things in the aussie market. Sad thing is if we didn't have Bunnings prices would be even worse. Personally I'd wish the likes of Mitre 10 would shutdown and multinational hardware store open up in it's place.

It's kind of like how aussie made goods shipped to NZ are cheaper there than they are here despite shipping costs :lol:. I'm sure there are excuses as well like their always seems to be but rarely with any real truth behind it :Wink

Originally Posted by Christos

Yeah prices have increased. Good thing for me thou is that at the moment I do not have the funds to purchase anything.

Yeh I was lucky I bought alot of decent kit over a year ago. Unfortunately had to buy a metal cutoff saw this week so went for a cheapie Ozito one for $120 with 3 year warranty. Looked at the next level kit and it was double in price and wasn't anything flash either. The ozito will do me enough for the job I need. Would of preferred a GMC one though..

The internet is the only way consumers can get true competition in pricing. Buying interstate and overseas can save money, and most importantly sends a message to the Aussie distributors and retailers that there is true competition on their doorstep.

The Bunnings approach follows the US Home Depot model which shows that more sales will follow if the price is right. I know there are exceptions but the tool industry has some familiar traits with other industries where too many Aussie distributors don't care about sales volumes. They are often primarily fixated on high profit margins for the least amount of effort.