Thread: Discounts on Festool

Originally Posted by Ratbag

What Festool is doing is proscribed under the Trade Practises Act as "Resale price maintenance"; meaning that they are dictating to resellers of their product the minimum selling price. This effectively stifles price competition between resellers, and while illegal under the provisions of the act, in reality it offers greater profitability to the inporter and resellers alike......
....... Ultimately, it's up to us consumers to do somethjing about it: should we really be doing business with companies that are deliberately breaking the laws of this country, or who behave in unconscionable or immoral conduct?

I'm a bit between the devil and the deep blue sea on this one.. As a manufacturer if I had a premium product and wanted to keep it at the top end of the market, I wouldn't want discounters to devalue the perception that my customers had of exclusivity. I would be happy for my retailers to command a larger margin for my product providing they provided a level of service commensurate with the value of the product!

On the other hand, as a consumer, I can decide whether I want to pay a large premium just to have a premium "brand" product. So if I want to spend a lot more money on, say, BMW, Bose, Meile, Bang + Olufsen, Loewe, Festo, Rolex, Omega and so on...that is my choice as a consumer.

The trade practices legislation is a bit interesting to say the least. As a franchisee in a large chain, I can't talk to my neighbouring franchise to ensure our prices are consistent, but we can each talk to the franchisee, who can issue recommended prices to us.

Festo hardly has a monopoly, it's no grand conspiracy. If you don't like the price buy GMC?? What right have we (or the government) to dictate prices to ONE company that does not have a monopoly. If all the manufacturers (or even some) were clubbing together that would be a very different thing.

and anyway.... why is there only one monopolies commission???


P

Your missing the point, Festool are commanding a higher price, not because of the quality, intrinsic value of the product or after sales service - but because they force the retailer to 'toe the line' - this then has a direct impact on the consumer.

This infact may increase the perception of an 'elite' product, but it's available almost everywhere - just not at a fair and reasonable price.

I met with a Festool representative today and inquired about the price of a jig saw and I was told all dealers must sell them for the same price or they will lose their franchise to sell Festool.

If that's not price fixing, I don't know what is but, look out for the next administration (Obama/Biden) they will fix this unlawfull activity.

Originally Posted by jacko9

I met with a Festool representative today and inquired about the price of a jig saw and I was told all dealers must sell them for the same price or they will lose their franchise to sell Festool.

If that's not price fixing, I don't know what is but, look out for the next administration (Obama/Biden) they will fix this unlawfull activity.

There, I hope you feel better. Now have a Bex and a liedown. The age of this thread should tell you something. Festo is still doing business on the same marketing plan and intends to carry on with it. [BTW, the Supreme Court has already held that it is NOT price fixing, so don't hold your breath.]

As much as my pocket doesn't like it, I think Festools policy of fixed prices is reasonable and helps maintain the value of their products.

Instead of getting caught up in a ridiculous price war like most other tool companies and then compromising on quality to maintain profits, they build bloody good tools at a price.

The only thing that annoys me is how the yanks seem to get everything for a lot less , but that is not unique to festool...

regards

Marios

Guys, price fixing is when two (or more) competing companies collude to sell their products at the same price so they don't have to compete.

One company setting a price for it's own products is not price fixing and is reasonably common practice. In fact it, means that no matter where you go you know how much it will cost.


My own opinion is that I buy Festool products because they are far superior and for that I pay a very high price If I want a cheap tool I buy a Makita. You can't get a Porche for the price of a Falcon.

Second is I have never had trouble finding retailers who compete on Festool pricing. I have even had the Festool rep tell me which stores will. The following are places I have bought Festool tools at less than rrp:
- Total Tools Industrial in Moorabbin (Melbourne)
- Combined Electrical in Canberra
- Sydney Tools in Alexadria

Hope this helps you find some cheaper Festools.

Nintendo is the same. Retailers are not allowed to discount the Wii, so it all comes down to what "extras" you get thrown in with the bargain (eg extra controller, free game).

Originally Posted by Rubber.Piggy

One company setting a price for it's own products is not price fixing and is reasonably common practice.

But forcing retailers to sell at a fixed price is retail price maintenance and that is illegal.

The only way Festool gets away with it is because through "convoluted mechanics" you actually are purchasing from Festool direct (through the retailer who gets a fee for that) and not from the retailer.

Peter.

Originally Posted by Sturdee

But forcing retailers to sell at a fixed price is retail price maintenance and that is illegal.

The only way Festool gets away with it is because through "convoluted mechanics" you actually are purchasing from Festool direct (through the retailer who gets a fee for that) and not from the retailer.

Peter.

Yes you are right, but as you pointed out there is nothing illegal going on because the supplier is not the retailer. Many manufacturers of premium/low volume products do this, Miele is the only one I can think of off hand (Sparhawk suggests Nintendo). The supplier is paid to display the stock in their store, but they are not selling it, Festool is.

This not only allows the company involved to have a uniform price but also allows them to provide uniform service, delivery, installation and support direct to the end user. It also allows them to control the stock, i.e. if you display Festool you must display it all. Which is why you always get to see the whole range in a place that sells Festool.

I don't mind the system because it means I get to deal directly with the manufacturer instead of some jack of all trades retailer. When I have needed my Festools serviced this has been invaluable.

Also don't forget that a uniform price stops mark ups as well as mark downs. The only tool store in town can easily mark up the prices, but not on a Festool.

Originally Posted by Rubber.Piggy

Yes you are right, but as you pointed out there is nothing illegal going on because the supplier is not the retailer. Many manufacturers of premium/low volume products do this, Miele is the only one I can think of off hand (Sparhawk suggests Nintendo). The supplier is paid to display the stock in their store, but they are not selling it, Festool is.

This not only allows the company involved to have a uniform price but also allows them to provide uniform service, delivery, installation and support direct to the end user. It also allows them to control the stock, i.e. if you display Festool you must display it all. Which is why you always get to see the whole range in a place that sells Festool.

I don't mind the system because it means I get to deal directly with the manufacturer instead of some jack of all trades retailer. When I have needed my Festools serviced this has been invaluable.

Also don't forget that a uniform price stops mark ups as well as mark downs. The only tool store in town can easily mark up the prices, but not on a Festool.

There's a lot in your comments that deserve a reply, but I don't want to perform an examination of the law's intent, which is clearly to allow unfettered market forces determine price. You are obviously smart enough to figure it out, despite your stated position.

Now, on mark-ups: The world that I inhabit is full of information. This information makes me free to vote with my feet. When I bought my CT-22 the salesman told me that if it wasn't for the price fixing he'd charge me more because I wasn't trade. I offered him a free kiss of my ass while walking out to buy it online for less. See how that works? The "only store in town" thing does not work in an era of global shopping.

Interesting how these discussion go isn't it? I read often people complaining about bank profits too, because $4b looks like a big number. In fact it represents a 10% return on assets, which investors would hope for. But people still want bank charges dropped.

This is really quite strange, given that the companies where they buy their groceries made a 27% return last year, and people put more money into groceries than the banks, yet no-one screams at them to drop the prices of their goods. Maybe Festool should sell from grocery stores, then no-one will mind

You could go to Carbatec Melbourne next week 13-18 Oct and save 5% on Festool or 20% on some Festool drills.

5% isn't as good as their 10% a few months ago when I bought a couple of Festool items, but at least they are still giving it a go.

I have to say all my purchases of Festool have been discounted - if not in cash in free accessories or heavily discounted consumables at least.. The trick is to build a good relationship with 1 dealer (in my case 2 because I have homes in both the North and South of the state). The old maxim is true in small business, "superior service builds repeat business". You won't find Bunnings or Mitre 10 lending you a power tool for the weekend so you can try before you buy as I did with my local Festool supplier (a Trion Jigsaw which I bought).

Originally Posted by Shedhand

I have to say all my purchases of Festool have been discounted - if not in cash in free accessories or heavily discounted consumables at least.. The trick is to build a good relationship with 1 dealer.

Very sound advice, Shedmeister!
I don't think I've paid full retail for anything Festoolic (sanding pads, saw blades, tools) for over 12 months. I always buy at one dealer.

Regards,

Rob