Within the past few months I have noticed the always more frequent practice of fixed prices for a certain item regardless of how many suppliers you check with.
Example are Festool, Powermatic, kreg and so on, where the price is fixed by the manufacturer.. This practice reminds me of the ’50 and ’60 when a so called “Fair price” item cost the same no matter what type of store and where you bought that item. I understand that the practice was then determined to be illegal. It is apparently legal now. What can the consumer do ? Recently I read that Festool will refuse to ship their products to retailers that discount them, I guess the same from other companies..
Someone on this forum who knows more than me on this subject could please shed some light
Merry Christhmas
John Cabot
Edited 12/15/2007 9:14 pm ET by JohnCabot
Replies
Welcome to a new world where tool manufacturers try to protect their product from big boxes and internet retailers discounting them. Independent dealers need to stay alive and the only way they can make money on tools is to sell them with a decent markup. Lowes, Home Depot, Amazon etc.. will sell tools with 10% markup on them leaving the smaller players like Woodcraft, Rockler and your local tool dealer out in the cold. These manufacturers you mention will only sell their tools at list price so that no one dealer has power over the other. Otherwise with the age of the internet, you would be able to shop around for the lowest price. Don't like it? tough. Go buy DeWalt or Ryobi. The big boxes have completely bastardize tools and the only way for tool manufacturers to stay alive is to cheapen the cost of the tool which in turn, lowers the overall quality, just so they can maintain market share in the sales channel.
I wish the company I worked did that. I have personally witnessed the complete dismantling of quality in a tool line just to appease the big box stores. What was once a proud Made in USA tool has turned into a Chinese piece of junk. Along with over 1000 people being laid off at the company. God Bless China.
http://forums.taunton.com/fw-knots/messages?msg=33813.2
There are quite a number of products that follow this pricing structure, Rolex watches and Oakley sunglasses are examples. What they do not tell you is just what discount the retailer is getting. If they are big movers of the product they get better cuts therefore a better mark-up, but the sell prices stays the same for everyone.
JC
The only reason the Big Box stores and the tool companies have power over us is that we allow them to.
The only real answer is to take back power to ourselves.
We should make our own tools.
That will show them!!!!!
Seriously, in my part time job at Woodcraft, I see people who are "hooked" on Festool. Me, I'm hooked on Lie Nielsen. Once a person becomes hooked on a product line or company, one loses control. They can pretty much charge what they like -- as long as people still pay the price. So they do walk a fine line. Look at the thread on the problems at Lee Valley. It ain't easy out there.
Pricing is an interesting issue all around. Let's think about the "Fine Woodworkers". Ever try to buy a piece by Nakashima or by Krenov? Why are the prices on those things so high?
Supply and demand. The producers control supply. The consumers control demand. We are the consumers. If we don't show some self control, the prices go up.
There is a tendency of people to blame others. I don't blame the companies. They are only doing what we the consumers show them that we want them to do, and we do that with our wallets.
If I don't like a company's pricing policy, I don't buy from the company. I certainly would not criticize their pricing policy. That is their choice. Just like the decision to buy or not is my decision. It is my decision not to whine.
This topic is like the topic of sharpening. It keeps coming up, and we can't do anything to put it to bed once and for all. I guess that all that is left is just to enjoy repeating the discussion. So it is time for me to go see if there are any more threads on sharpening.
Enjoy. Have fun. Don't worry about pricing policies. Tools are not important. It is what we do with them that is important. There isn't a tool out there that you can't replace with another tool by a different company. Go to the other company.
Merry Christmas. I thought you might enjoy a different point of view.
Mel
Measure your output in smiles per board foot.
Mel,
we do not enjoy your point of view. Is this even really a point of view?...go and buy other companies tools..thanks for that Mel, you are the best. I bet you fix all your families problems too...with your wisdom. Let's all pitch in and buy Mel a few boxes of Puffs because he can't find anyone to talk about sharpening. Do you need lessons on how to make a blade sharp sissy toes? Hey hit me back....late.
Talk atcha later bradbird
Brad,
no hard feelings.
Sometimes it is fun to check out a different point of view for a few minutes. I find that as people get older, they tend to ignore other points of view. I don't want to get old. I enjoy listening to points of view that are at odds with my current beliefs. It causes me to think and to stay fresh.The alternative is "Fox News 5" in which three people who hold similar views try to shout them louder than each other. No new info there. Also, it is not very challenging to think about. No conflicting ideas.OK, it is time for me to go to McDonalds and get a senior coffee.
Enjoy. Don't take my words too seriously. I don't. After 28 years at NASA, I have learned to enjoy checking out conflicting theories. I try not to get stuck in any one rut. For a long time, I have had a Mac and a PC. I listen to fanatics on both sides yell and scream. I enjoy the features and flaws of both, and based on experience, I have some ideas of what they are. But if one only uses a Mac and only hangs around with Mac-users, it is really hard to know what one is missing. Hope that helps you see where I am coming from.
You invited me to "Hit you back." Not my style. I am more of a "live and let live" type of guy. I'd rather have a party than a fight. So let's organize a barbeque. As far as sharpening goes, I recommend a good cinder block. Just make sure it is flat. 10W30 motor oil is a good lubricant. Don't press to hard. :-)
MelMeasure your output in smiles per board foot.
Mel,
Well said and I 'd have a beer and bbq with you any day. Have fun at Mc's.
talk atcha later Bradbird
I find that as people get older, they tend to ignore other points of view...Not this OLD MAN!
Will George,"I find that as people get older, they tend to ignore other points of view...Not this OLD MAN!"Right on Dude. You enjoy other points of view. But then again, you are just a kid. With your love of Christmas and women, you will never get old. You are the winner of the Knots "Dorian Gray" award. MelMeasure your output in smiles per board foot.
Mel,
You're wrong. Macs are better.:)
P,"Macs are better".You know, I believe you are right, for most applications. But I have two things that I do a lot of (genealogy and language translation), and my applications for those two things are not made for Macs. I do love the fact that Macs don't suffer from as many viruses, and that they are more integrated, etc. They also are more reliable. Glad to see you have a sense of humor. Those things are so valuable for staying sane.
Enjoy,
MelMeasure your output in smiles per board foot.
John:
The practice you remember was called, "RPM", which stood for retail price maintenance. It allowed OEM's to control the market price of their products, by "punishing" retailers or channels who sold at a discount. RPM was made illegal in the UK and led directly to the growth of discount retailers and so-called big-box stores.
I used to think that RPM was a bad thing, but 30 years on, I'm not so sure. The retailers have so much power that they dictate a price point and demand that the OEM engineer the product to the desired price point - hence engineering out quality and seeking the lowest-cost manufacturing sites. RPM allows Festool, for example, to do business outside of this merry-go-round. In exchange for much lower market share, they are able to engineer and manufacture quality tools for what is by Home Depot standards a niche market. Ultimately consumers get the more choice. When I want a quality tool, I can buy Festool, but when I want a cheapie throwaway, I can get something at Lowes or HD.
Finally, no-one likes to be ripped off. RPM makes the playing field level for all channel types. It is really nice to go to a quality retail outfit, get some quality help and find the price you paid is in line with the internet (as happened to me recently with an Iwata spray gun).
So RPM benefits us all. And, the big retailers have too much power over the weak or devalued brands for RPM to return across the board. Black and Decker is too vested in volume to try and do what Festool do.
Regards,
Hastings
Hi Hastings ,
The best example I can remember was when Michelin tires were only sold by authorized dealers who only sold at what was then called " fair traded " prices which was basically like a list price .
Assuming the manufacturer sells the product for a said price regardless of the retail price the profit is there .
When there is only one price does it make the products desirability or credibility higher or worth more ?
A big discount tool store is un likely to carry high end product in general , the big store is too independent to be dictated to by the manufacturer .
dusty
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