Michael1960
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- Jan 31, 2012
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- 186
With all the talk about price increases I took a look at the Australian Festool website - wish I hadn't. The new ETS-EC 150/3 Random Orbital Sander is $869 [eek]. I'll pass on this one...
Beat the increase
- Thread starter SS Teach
- Start date
Big red, I hear you and appreciate where you come from in precision machining.
Price increase stinks...I'm not sure how Festool justifies them...perhaps they know it provides a boost to provide capital for investment in component parts to replenish inventory (due to run size requirements) or maybe for R&D...or help to be local Festool HQ in each country...in any case it's there choice...and our choice to buy or not. It would be more fair if all pricing was based on the euro...but then for a retail operation you can't really be going up/down on pricing.
Regarding plastic...I'm sure part of it had to do with non conductive housings...I like the fact that festool is not a throw away item...a part breaks...you can get just that part.
Another interesting point is that I've always been impressed with Festools former parent company...Festo...who makes pnuematics and other automation components (considered by many as the best)...being in machining...if you build any machines...I'm sure your familiar with that brand.
In the end I value putting the best into my work...as you know that starts with the tools, you, etc...so far it's the best tools I've found. Remember, it is a system...clean, organized, precise (well maybe .001")...give the 30 day demo a try.
Price increase stinks...I'm not sure how Festool justifies them...perhaps they know it provides a boost to provide capital for investment in component parts to replenish inventory (due to run size requirements) or maybe for R&D...or help to be local Festool HQ in each country...in any case it's there choice...and our choice to buy or not. It would be more fair if all pricing was based on the euro...but then for a retail operation you can't really be going up/down on pricing.
Regarding plastic...I'm sure part of it had to do with non conductive housings...I like the fact that festool is not a throw away item...a part breaks...you can get just that part.
Another interesting point is that I've always been impressed with Festools former parent company...Festo...who makes pnuematics and other automation components (considered by many as the best)...being in machining...if you build any machines...I'm sure your familiar with that brand.
In the end I value putting the best into my work...as you know that starts with the tools, you, etc...so far it's the best tools I've found. Remember, it is a system...clean, organized, precise (well maybe .001")...give the 30 day demo a try.
At least when I try to view it just through the eyes of a Marketeer, I believe Festool has built a market out of turning left when almost all of the handheld power tool market turned right.
Many power tool suppliers decided to go the route of the disposable tool which in fact does have mass appeal. How many times do we even see a Festool up for sale because somebody had one job for it and that was that. In that respect if that is why you bought your Festool you could have done as well to have purchased almost anything else and put it aside once the job was completed, likely feeling like you recouped your cost in the completion of the job with the tool now almost costless at that point....without much of a resale market but without compelling you to sell it either.
There are several suppliers treading something of a middle ground....a value line.....more quality than the worst of them, less cost than the better tool...sort of something for the contractor on a budget. I would say that by and large handheld tool suppliers fall into either the disposable or the value lines. Even if you use your tools regularly, you could be swayed to buy from either the disposable or value product lines and just replace a tool as it died. Nothing wrong with doing that either.
There are very very few suppliers that occupy the same space as Festool. In addition then, Festool created an ecosystem that is very hard to ignore. So they are intending to sway you to buying a Festool even when you don't need one mainly because it will work in parallel or in cooperation with your other Festools....your dust extractor being the best example with the mft not far behind. That is what Festool has in a nutshell. You could easily make the case that the available buyers of a Festool product or its likes far outstrip the available supply. A few suppliers can on occasion come up with a product or two from their product line that can match Festool's quality. But then you are swayed by the benefits of the ecosystem.
I recently bought a 0.50" Hitachi hand drill ( I refuse to buy battery powered tools any longer) that is an absolute monster. I could drill telephone poles with it all day and it would just grin back at me but their 3/8" drill is hardly worth even a moments consideration compared to the competition and that is a very common experience. Often when you find a product in the handheld power tool market like my Hitachi drill, you find that it is actually a loss leader....designed to draw you into that product line when in fact it is not representative at all. It is a standout masquerading as representative. You could in fact often build a complete set of tools from company loss leaders. But I am willing to bet that you would turn around one day and realize you had a real hodgepodge that in that respect bore a cost as well.
The final piece to Festool's marketing puzzle is based on the reputation they have built. It creates something of an iphone impact on the market....with potential customers hoping they can justify the purchase of one and willing to stretch the budget to get there. Often this last piece produces the highest % of unsatisfied customers as any failing of the product whatsoever, even the smallest one is treated a an abject betrayal when the price paid is considered.
You could endeavor to move past Festool but to where Mafill???? Want sticker shock....check those babies out. In fact, Festool's association with Mafill could hardly be said to harm it....not one bit.
Many power tool suppliers decided to go the route of the disposable tool which in fact does have mass appeal. How many times do we even see a Festool up for sale because somebody had one job for it and that was that. In that respect if that is why you bought your Festool you could have done as well to have purchased almost anything else and put it aside once the job was completed, likely feeling like you recouped your cost in the completion of the job with the tool now almost costless at that point....without much of a resale market but without compelling you to sell it either.
There are several suppliers treading something of a middle ground....a value line.....more quality than the worst of them, less cost than the better tool...sort of something for the contractor on a budget. I would say that by and large handheld tool suppliers fall into either the disposable or the value lines. Even if you use your tools regularly, you could be swayed to buy from either the disposable or value product lines and just replace a tool as it died. Nothing wrong with doing that either.
There are very very few suppliers that occupy the same space as Festool. In addition then, Festool created an ecosystem that is very hard to ignore. So they are intending to sway you to buying a Festool even when you don't need one mainly because it will work in parallel or in cooperation with your other Festools....your dust extractor being the best example with the mft not far behind. That is what Festool has in a nutshell. You could easily make the case that the available buyers of a Festool product or its likes far outstrip the available supply. A few suppliers can on occasion come up with a product or two from their product line that can match Festool's quality. But then you are swayed by the benefits of the ecosystem.
I recently bought a 0.50" Hitachi hand drill ( I refuse to buy battery powered tools any longer) that is an absolute monster. I could drill telephone poles with it all day and it would just grin back at me but their 3/8" drill is hardly worth even a moments consideration compared to the competition and that is a very common experience. Often when you find a product in the handheld power tool market like my Hitachi drill, you find that it is actually a loss leader....designed to draw you into that product line when in fact it is not representative at all. It is a standout masquerading as representative. You could in fact often build a complete set of tools from company loss leaders. But I am willing to bet that you would turn around one day and realize you had a real hodgepodge that in that respect bore a cost as well.
The final piece to Festool's marketing puzzle is based on the reputation they have built. It creates something of an iphone impact on the market....with potential customers hoping they can justify the purchase of one and willing to stretch the budget to get there. Often this last piece produces the highest % of unsatisfied customers as any failing of the product whatsoever, even the smallest one is treated a an abject betrayal when the price paid is considered.
You could endeavor to move past Festool but to where Mafill???? Want sticker shock....check those babies out. In fact, Festool's association with Mafill could hardly be said to harm it....not one bit.
pugilato
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- Mar 31, 2011
- Messages
- 580
The only reason I can think of that Festool raises their prices annually is because they can. I have seen innumerable posts of users justifying the ever higher prices for the best tools. I think the Festools have become a sort of status symbol (recently read a guy who had a bunch of Festools ask for advice on how to build a bookcase) and status symbols carry a price differential. No matter... I still have my Festools and will continue to use them, but new stuff is a different thing altogether. Could have bought a Vecturo, but went with the Fein 350Q for half the cost, and this is a fine tool indeed.
How about the idea that Festool uses price increases to control demand? Festool does not want to increase manufacturing capacity too much, because if another big economic downturn occurred, they would be stuck with the excess capacity and some associated costs.
Festool does not want demand to outpace supply by too much. A little excess demand is good, but too much leads to excessively long wait times and potential customers may well turn to another product line.
By carefully raising prices, Festool keeps the demand for their tools in the range that they can supply. Over time they can slowly increase manufacturing capacity and thus keep the price from going too high for the market too bear.
While all this is going on, they make very nice profits and can use the money to build a cushion for times when they cannot use price increases quite as aggressively as in past years. Festool probably has a very interesting 10 year plan.
Festool does not want demand to outpace supply by too much. A little excess demand is good, but too much leads to excessively long wait times and potential customers may well turn to another product line.
By carefully raising prices, Festool keeps the demand for their tools in the range that they can supply. Over time they can slowly increase manufacturing capacity and thus keep the price from going too high for the market too bear.
While all this is going on, they make very nice profits and can use the money to build a cushion for times when they cannot use price increases quite as aggressively as in past years. Festool probably has a very interesting 10 year plan.
stvrowe
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- Jan 27, 2007
- Messages
- 834
Threads like this are interesting as it gives insights to how people think about purchases. Festool price increases have always been announced beforehand while increases from other quality tool manufacturers just happen without announcement. It is ironic that this practice by Festool seems to invoke more criticism and complaints even though we are given advance warning and provided with the opportunity to purchase before the price increase. Over the past years, Mafell has had similar price increases to Festool (approximately 3.6% increase from prices last year). The Lamello price increases have even been greater.
Eventually, pricing will begin to impact sales as the price difference from lower tier tools grows. IMO, Festool may already be at that point on some of their offerings. On the other hand, it is interesting that the most expensive tool Festool offers in NA is actually less expensive than its closest competitor (excluding the Chinese made knockoffs).
When I have need of a new tool, I always look at Festool first, compare prices with the competition, evaluate the expected performance differences, and judge whether the difference is worth the price premium. Often, but not in all cases the premium is justifiable. Ultimately, the free market forces of supply and demand will rule and Festool will either be able to maintain their price points or they will not.
Eventually, pricing will begin to impact sales as the price difference from lower tier tools grows. IMO, Festool may already be at that point on some of their offerings. On the other hand, it is interesting that the most expensive tool Festool offers in NA is actually less expensive than its closest competitor (excluding the Chinese made knockoffs).
When I have need of a new tool, I always look at Festool first, compare prices with the competition, evaluate the expected performance differences, and judge whether the difference is worth the price premium. Often, but not in all cases the premium is justifiable. Ultimately, the free market forces of supply and demand will rule and Festool will either be able to maintain their price points or they will not.
People complain about the notification because they realize they are being manipulated. Nobody likes to be manipulated. I don't thing there is that much complaining about the notifications. I think it is more about the increases themselves.
Festool does the notification thing because it works. However I do think it works as much or more for our perception that the supply chain will get stretched thin by the demand related to the price increase as for the fact of the increase itself. As usual, we want what we want when we want it.
Festool does the notification thing because it works. However I do think it works as much or more for our perception that the supply chain will get stretched thin by the demand related to the price increase as for the fact of the increase itself. As usual, we want what we want when we want it.
tiralie
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- Jan 26, 2010
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- 3,617
shaun.mcc said:
...only if you believe that Festool's are being purchased because of their high price (Veblen good) vs their value over other similar products.
Price increases allows a company to manage the capital expense of expanding capacity to meet market expectations by lowering demand.
Price elasticity of demand is fairly responsive even in the case of a commodity like gasoline. It has been shown that as the price increases, consumption decreases.
Tim
Stephen B
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[size=14pt]
It is interesting that Festool, USA warned its customers about the April 1 price rises. This was not the case in Australia. We only knew because of our dealers, either by email or personal contact. There was no direct announcement from Festool Australia, either by email or on their Web or Facebook pages.
But this is no different to other Tool manufacturers [see Reply #29 by Steve Rowe] so I am not necessarily being critical, just reporting how the increases were enacted here.
It is interesting that Festool, USA warned its customers about the April 1 price rises. This was not the case in Australia. We only knew because of our dealers, either by email or personal contact. There was no direct announcement from Festool Australia, either by email or on their Web or Facebook pages.
But this is no different to other Tool manufacturers [see Reply #29 by Steve Rowe] so I am not necessarily being critical, just reporting how the increases were enacted here.
weekendwarrior
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- Feb 16, 2014
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- 181
Untidy Shop said:
I learned about the price increase from the FOG/dealers here, too. I don't remember Festool USA proper making the announcement. It seems so long ago at this point...
Kinda reminded me of Christmas: a lot of build up and stress and outlay of probably too much money and then it's over... until next year!
PreferrablyWood
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- Sep 8, 2013
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- 972
I'm a little surprised that prices are going up in the States and Australia.. We have higher prices across the board for everything here in Europe, and I've not noticed s price increases the lasts years at Festool, the Mac store is putting some prices up, Pentax lenses, of which I have several have gone up I notice. Perhaps the tools for the actually manufacturing have increased maintenance cost, or some of the higher end materials are getting more expensive.
I speculate that lower prices in the States for Festools in the past was a marketing decision based on creating a users base in a new market but at a break even level, or even selling at a loss, and now that the market share is established they are passing on the real costs of doing business and expectations of gaining improved returns. This happened with Pentax lenses, which in europe were allmost universally 30% more expensive than in the US, then suddenly the price increases were announced and the users in the US got very angry, this happened about 2009 six years ago, the prices on those lenses remain high..
I speculate that lower prices in the States for Festools in the past was a marketing decision based on creating a users base in a new market but at a break even level, or even selling at a loss, and now that the market share is established they are passing on the real costs of doing business and expectations of gaining improved returns. This happened with Pentax lenses, which in europe were allmost universally 30% more expensive than in the US, then suddenly the price increases were announced and the users in the US got very angry, this happened about 2009 six years ago, the prices on those lenses remain high..
PreferrablyWood said:
Or perhaps we're footing your bill, ya freeloaders!!!!
Really though, you guys are looking at this backwards. It depends who's recording the profits and where.
Festool, as a German company, is reporting profits/revenues in Euros. When the dollar gains heavily against the Euro, it means it's making 1.07 EUR per dollar now whereas before they were making 1.40 EUR. That hurts the bottom line, a lot.
Apple, as an American company, is fine with you guys sucking wind, because the 800 Euro iPhone was only worth $571 USD a year ago. Now? Almost $750.
Now, it would be stupid to adjust prices daily based on exchange rates, so guesses are made for an annual average to hit their profitability targets.
AlexThePalex
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Prices in Europe go up every year, just normal inflation correction.
