Thread: Are they Price Fixing The three leading Tool suppliers.

Originally Posted by Cgcc

David - the idea was that if they couldn't insist on retail price maintenance (ie fixing minimum price) then the smaller boutique stores would get swamped by discounting by larger players.

ACCC authorises minimum retail prices on Festool power tools | ACCC

The problem perceived is that if you let the smaller players get squeezed out then the bigger players just dictate terms and good luck negotiating and enforcing service and availability agreements.

there's a famous case in the US - Schwinn Bicycles, which used to dot every small town, were fairly pricy and the dealers had to meet terms of service and repair and support. Schwinn also dictated a minimum sale price, and that ended up in court. In the end, the courts here made a decision that set a precedent - that Schwinn could dictate sale price because without it, the lowest price sellers would not be able to meet the requirements for providing service.

The minimum advertisable price is a different thing - I guess it's looser (dealers can still sell at a lower price, but they can't advertise it at all, which makes it hard for anyone to know that you'll sell at a lower price).

The reality is that it now protects larger stores and not smaller stores. Gibson guitars follow this model (probably all do now). When I as a kid, the local music shop sold Gibson guitars at 42% off list. List was an absurd price and probably a 100% markup at the time, so the dealer could've sold at cost with a 50% off price. Safe to say, the local dealer wasn't making much, but it was a mom and pop shop in a rural area where people are kind of stingy. This was pre-internet. I came to learn that most people didn't get this price, and when mail order dealers became more common, and then transitioned to the internet, some of the small dealers had really low prices. Similar to my local dealers. the large mail order houses sold for about 30% off list and they were unhappy with the idea that some other small authorized dealer could just beat them and they couldn't use their size for any sway with a customer.

Thus, the minimum advertisable price came up, but how is it described here? As protecting the small dealers. the uncompetitive small dealers (one that used to be near me) often sold for only a tiny amount off of list. It didn't help them at all - it stuffed the dealers like my long time locally owned store. that was the plan in the first place - my local dealer was only a regional threat to large mail order music stores or chains, but once the internet came along, they and a small number of dealers like them were a threat to the larger stores by internet word of mouth, etc. MAP put a stop to them being able to post their actual sales prices. Same with lowes and home depot vs. stores that quickly developed in the late 1990s and early/mid 2000s. HD would sell a PC 7518 for $349 of you wanted to order it from them and wait, or you could get online and get one from coastal tool for $250. No way a large retailer with sway is going to tolerate that for long.

(if you ordered at home depot, it look longer to get the router than it did to just get online and have it drop shipped, too)

I know this has nothing to do with the thread, but belt sander drive belts are usually a common industrial item available at 1/4 the cost from a tool shop.

Regarding Makita prices, I asked my favourite tool shop to match a $50 lower price on a 3m saw guide and they did. As a bonus they shipped it to me for $80 less than the online guy.

“Sydney Tools “ and “helpful staff” should never be used in the same sentence, ever.

Originally Posted by riverbuilder

“Sydney Tools “ and “helpful staff” should never be used in the same sentence, ever.

Luck of the drawer I guess but I don’t find them too bad down my way and my preferred store for power tool purchases

I buy from these big blokes based on convenience, availability and customer service.
1st choice - my local total tools. They know my face, are extremely helpful, and will sometimes go and find a 'ex-special' <ahem> tool hidden on a back shelf for me. Good return policy.
2nd choice - Bunnings. Just down the road, staff are generally helpful if occasionally not hugely knowledgeable, and excellent returns.
3rd choice - Sydney tools, mainly because their returns policy is very poor (you basically can't return anything!). Staff are reasonably helpful, but at times when I've got them to order a tool in for me, I've had to go into the store and make them go and look for it once I was reasonably sure that it must have arrived. It's my store of last-resort.

I was at Sydney Tools this morning and then Total Tools this afternoon. Big difference betwwen the 2. TT staff greeted me as I came in, offered help twice on seperate occasions and had what I needed (nitto air fittings). ST ignored me upon entry, stayed behind counter, only helped when I went up to them, neither staff wore face masks and sold me an air nail gun which I couldn't use because they didn't have any fittings to suit. Keep in mind I was at ST around 7.30am and in my work gear (which is covered with my company logo). If they aren't trying to keep tradies happy, who is their target audience? Other shopping experiences with ST have been equally underwhelming.

Originally Posted by Mountain Ash

I was at Sydney Tools this morning and then Total Tools this afternoon. Big difference betwwen the 2. TT staff greeted me as I came in, offered help twice on seperate occasions and had what I needed (nitto air fittings). ST ignored me upon entry, stayed behind counter, only helped when I went up to them, neither staff wore face masks and sold me an air nail gun which I couldn't use because they didn't have any fittings to suit. Keep in mind I was at ST around 7.30am and in my work gear (which is covered with my company logo). If they aren't trying to keep tradies happy, who is their target audience? Other shopping experiences with ST have been equally underwhelming.

If they have large commercial accounts, and they're like most places here, they are interested in two things:
1) large commercial accounts that buy 100 tools a month for site work, etc
2) smaller commercial accounts that will pay stupid prices for things just for not having to shop around

And probably a strong internet/drop ship business that doesn't take much hand time. Anything else in between and you're in limbo.

Went to Mitre 10 last week for a drill, same price within a dollar as all the other suspects plus got a free $10 gift voucher redeemable at any M10 store and automatically went into a monthly draw for a bag full of tools

Originally Posted by Mountain Ash

I was at Sydney Tools this morning and then Total Tools this afternoon.

Going on your location and description of said stores, I’m pretty sure I know which two stores you’re talking about and can fully agree with your description.

A little update visited my local Total Tools last Friday I think, they actually did carry some spare drive belts, but unfortunately not the one I needed to fix my original Belt Sander.
Ok so placed an order for the one I needed after confirming with staff using a Makita parts plan, they had the right bit.
$15 cost Two/Three week order time.
Received a Tex message today, Drive belt is ready for me to pic up [emoji106][emoji106].

Life mission complete I now have Two belt sanders feeling very manly tonight.

Cheers Matt.

Originally Posted by Simplicity

Life mission complete I now have Two belt sanders feeling very manly tonight.
Cheers Matt.

Double trouble????

According to Old Croc:
BELT SANDER : An electric sanding tool commonly used to convert minor touch-up jobs into major refinishing jobs.

Originally Posted by DJ’s Timber

Going on your location and description of said stores, I’m pretty sure I know which two stores you’re talking about and can fully agree with your description.

Hi DJ. Thanks for giving me a giggle 1st thing in the morning. Nice to know I'm not the only one.