Canadian pricing

[tDot]

I agree that it would be nice if Festool would lower their price points in Canada, to make them more comparable to the US.  I'm a contractor, and after my initial purchase of tools, which happened in the US before I was aware of our local dealer. I have only purchased a few new tools.  I'm not about to drop money on tools here in Canada when I am very aware of the prices down in the US, however I dont want to buy from the US, as I would like to support my local dealer.

The net result of this is that I only buy new Festools when I truly need them, I also don't buy any of the accessories or consumables as a result.  I have also found myself buying other brands again.  I dont want to, but it's even harder to justify the Festools when comparing the price difference to other brands.  Most other brands are virtually on-par with the US to Canadian pricing.

The pricing structure in Canada is also a considerable barrier to entry, all of the guys who work for me, and some of the builders whom I've worked for have been extremely interested in the Festool products.  However, their interest quickly dies when they hear the prices... of the few times I've asked, they would usually be more interested if the prices were on par with the US.

 

[Daviddubya]

While we're at it why don't we get Festool to change the USA pricing when the US dollar fluctuates in relation to German currency.  That makes about as much sense as adjusting Canadian prices to reflect fluctuations in the US dollar.  Maybe I just don't get it.  Hmmm.

 

[PaulMarcel]

So presumably the idea is to fix prices everywhere so people get dealer service.  But as John pointed out, retail stores with a Festool display need to stock a lot of expensive inventory to meet the immediate demands of the walk-in client.  So they don't.  They go to the "we'll order it for you at the end of the week; thereafter it will be 10 days; then on Tuesday we'll call you at 5 to close to tell you it is here so you come in on Wednesday to get it" (

 

[Frank Pellow]

While we're at it why don't we get Festool to change the USA pricing when the US dollar fluctuates in relation to German currency.  That makes about as much sense as adjusting Canadian prices to reflect fluctuations in the US dollar.  Maybe I just don't get it.  Hmmm.

It's a different situation.

That is because it is easy for many Canadians to nip across the USA-Canada border and pick up some tools.

It is not easy for most Americans to nip over to Germany to pick up some tools.

 

[justinmcf]

if you check out festool.de and then do the currency converter thing.
you will realise america gets the festool toys cheaper than germany!
bizarre but true!

regards, justin.

 

[jonny round boy]

if you check out festool.de and then do the currency converter thing.
you will realise america gets the festool toys cheaper than germany!
bizarre but true!

regards, justin.

Justin, whilst that may still be true on certain items, please bear in mind that the prices in Euro on the German website include VAT, which in Germany is currently at 19%.

MAJOR EDIT:

I decided to do a quick comparison to find out. I picked 4 tools which are representative of the whole range - the Kapex, Rotex, TS55 and OF1010. I then compared the prices from Festool UK, Festool Germany, and Festool USA (note - the Festool USA site does not have pricing information, so I chose Bob Marino's website for the pricing). I then converted all the prices excluding any sales taxes into Euro (since this is the originating currency) using the converter on Yahoo's UK Finance pages.

Here's what I found:

[attachimg=1]

These are relative prices at today's exchange rates ('bank rate') at 0.7254 for USD, 1.1131 for GBP.

As you can see, the US prices are as much as 25% lower than the German price. What surprised me is that the UK prices are also cheaper, but to a lesser extent.

If these differences were 100% due to exchange rates, then the percentage difference would be equal across all products (give or take 1 or 2% for rounding). The fact that they aren't equal indicates some different price point setting, depending on the market.

I'm not making any judgements, just presenting the figures as I found them.

 

[AdamM]

if you check out festool.de and then do the currency converter thing.
you will realise america gets the festool toys cheaper than germany!
bizarre but true!

regards, justin.

Yeah, but that price includes the 19% VAT...still more than in the US but brings it somewhat closer.

 

[jonny round boy]

While we're at it why don't we get Festool to change the USA pricing when the US dollar fluctuates in relation to German currency.  That makes about as much sense as adjusting Canadian prices to reflect fluctuations in the US dollar.  Maybe I just don't get it.  Hmmm.

David, that's over simplified.

What Festool charges in Canada versus the US is dependent entirely on the exchange rate (excluding any sales taxes). This is a linear relationship.

What Festool charges in the US versus Germany/Europe is dependent not only on the exchange rate but also the fixed costs of running the Festool USA division, e.g. if the exchange rate drops 10%, then the product they buy in drops in price by 10%, however the cost of running the US operation (excluding purchasing) does not change. This makes it a non-linear relationship, and it's then not so simple.

 

[JohnDistai]

I don't have to tell you things are bad. Everybody knows things are bad. It's a depression. Everybody's out of work or scared of losing their job. The dollar buys a nickel's work, banks are going bust, shopkeepers keep a gun under the counter. Punks are running wild in the street and there's nobody anywhere who seems to know what to do, and there's no end to it. We know the air is unfit to breathe and our food is unfit to eat, and we sit watching our TV's while some local newscaster tells us that today we had fifteen homicides and sixty-three violent crimes, as if that's the way it's supposed to be. We know things are bad - worse than bad. They're crazy. It's like everything everywhere is going crazy, so we don't go out anymore. We sit in the house, and slowly the world we are living in is getting smaller, and all we say is, 'Please, at least leave us alone in our living rooms. Let me have my toaster and my TV and my steel-belted radials and I won't say anything. Just leave us alone.'

Well, I'm not gonna leave you alone. I want you to get mad! I don't want you to protest. I don't want you to riot - I don't want you to write to your congressman because I wouldn't know what to tell you to write. I don't know what to do about the depression and the inflation and the Russians and the crime in the street. All I know is that first you've got to get mad.  You've got to say, 'I'm a HUMAN BEING! My life has VALUE!' So I want you to get up now. I want all of you to get up out of your chairs. I want you to get up right now and go to the window. Open it, and stick your head out, and yell, 'I'M AS MAD AS HELL, AND I'M NOT GOING TO TAKE THIS ANYMORE!'

Things have got to change. But first, you've gotta get mad!... You've got to say, 'I'm as mad as hell, and I'm not going to take this anymore!' Then we'll figure out what to do about the depression and the inflation and the oil crisis. But first get up out of your chairs, open the window, stick your head out, and yell, and say it: "I'M AS MAD AS HELL, AND I'M NOT GOING TO TAKE THIS ANYMORE!"

Howard Beale - Network (1976)

 

[mouppe]

This thread could go off on a million tangents about economics, currencies, Germany, manufacturing costs etc. but the original issue was a straightforward and simple one: the cost of Festools in Canada relative to the US. There is no justifiable reason for the massive discrepancy in prices between the two countries, and since many of us seem to able to cross the border easily to shop, the main suffering seems to be borne by the dealers.

There are two simple solutions. 1) Quote all prices in US dollars like Lee Valley. 2) Allow US dealers and Canadian dealers to ship outside their country, thereby allowing the consumer to buy where it makes most sense.

Richard.

 

[WarnerConstCo.]

What depression/recession?
I have chosen not to participate in any
of those activities. There are always people who
are willing to spend money.  I just had to find a few
more of them this past 6 months.

If those canadian's would send me some of that bacon
maybe we could come to a deal.

 

[Inner10]

While we're at it why don't we get Festool to change the USA pricing when the US dollar fluctuates in relation to German currency.  That makes about as much sense as adjusting Canadian prices to reflect fluctuations in the US dollar.  Maybe I just don't get it.  Hmmm.

Good idea Dave, next time I need more Festool I'll hop in my car and drive over to Germany........oh wait...

There are two simple solutions. 1) Quote all prices in US dollars like Lee Valley. 2) Allow US dealers and Canadian dealers to ship outside their country, thereby allowing the consumer to buy where it makes most sense.

Rich, I agree.

If those canadian's would send me some of that bacon
maybe we could come to a deal.

I think a peameal bacon for systainer trade can be arranged. [big grin]

 

[Daviddubya]

While we're at it why don't we get Festool to change the USA pricing when the US dollar fluctuates in relation to German currency.  That makes about as much sense as adjusting Canadian prices to reflect fluctuations in the US dollar.  Maybe I just don't get it.  Hmmm.

I see my tounge-in-cheek suggestion was not received in the humorous way it was intended.  Pricing products in response to currency fluctuations is something that is simply not going to happen.  In just the past 4 months the exchange rate for Canadian to American went from .914 to .984, not in a straight line.  If you can cross the border, buy for less, and get back across without paying a import tariff, be happy.

How's the pricing on Festool in Mexico?

 

[JohnDistai]

I think the solution is to ban all U.S. dealers that are within a two hour drive of the border.  This would then be fair to the Canadian dealers who may be losing sales because people are crossing the border to buy from the less expensive U.S. dealers.  It would also be somewhat consistent with the policy to ban dealers from eBay due to "unfair" third party influences.  

I'm sure Festool evaluates lots of scenarios when they price products, so they can determine what a Canadian's time is worth, the cost of gas, the hassle, etc.  They could then ban U.S. dealers from operating in that zone so that if Canadians did cross through this zone to purchase in the U.S., the difference in cost would be a wash.

I think it makes great sense!

 

[Administrator_JSVN]

I really don't want to get into the debate going on here but I will say just a couple of things about the topic.

First, there was an adjustment made to Canadian pricing in January due to the exchange rates.  Secondly, we do listen to our customers despite some of the comments made in this thread.  In fact, I don't know of many companies that offer a public forum engaging in open dialog between the companies, dealers and customers.

Literally within moments of Andreas' post, I had sent a message to our Director of Sales in Canada to bring this conversation to his attention. Andreas, thank you for your feedback.

I take a lot of personal pride in working for a company that treats its customers, dealers and employees better than 99.99% of the companies out there. There are few companies that would go to the same extents as Festool to keep their dealers and customers happy.

 

[EcoFurniture]

I really don't want to get into the debate going on here but I will say just a couple of things about the topic.

First, there was an adjustment made to Canadian pricing in January due to the exchange rates.  Secondly, we do listen to our customers despite some of the comments made in this thread.  In fact, I don't know of many companies that offer a public forum engaging in open dialog between the companies, dealers and customers.

Literally within moments of Andreas' post, I had sent a message to our Director of Sales in Canada to bring this conversation to his attention. Andreas, thank you for your feedback.

I take a lot of personal pride in working for a company that treats its customers, dealers and employees better than 99.99% of the companies out there. There are few companies that would go to the same extents as Festool to keep their dealers and customers happy.

Well said! Thank you for your response Shane.
I never had the intention to make this into a big issue. I'm sorry it went into a bashing...
And you are right. Festool and it's staff is a company that I admire and I would never question your outstanding business practices! I was just wondering about the exchange rate...
Again, thank you for looking into that!

 

[Daviddubya]

One additional point about Canadian/American exchange rates.  Individuals do not get to exchange dollars at the published rates.  My wife received a check just the other day in Canadian funds.  Our bank deposited the check and charged almost 4% more than the exchange rate to make the transaction.  If the exchange rate today is .984, the real rate is about .95, after paying the bank fee to perform the exchange.

 

[Inner10]

One additional point about Canadian/American exchange rates.  Individuals do not get to exchange dollars at the published rates.  My wife received a check just the other day in Canadian funds.  Our bank deposited the check and charged almost 4% more than the exchange rate to make the transaction.  If the exchange rate today is .984, the real rate is about .95, after paying the bank fee to perform the exchange.

That is a couple percent difference depending on the bank, this discussion is about the relative american prices being dramatically lower then the Canadian prices.  If you are proposing that Festool should charge american prices + a 3% exchange I think us Canadians can live with that penalty.

Well said! Thank you for your response Shane.
I never had the intention to make this into a big issue. I'm sorry it went into a bashing...
And you are right. Festool and it's staff is a company that I admire and I would never question your outstanding business practices! I was just wondering about the exchange rate...
Again, thank you for looking into that!

Agreed thank you!

First, there was an adjustment made to Canadian pricing in January due to the exchange rates.  Secondly, we do listen to our customers despite some of the comments made in this thread.  In fact, I don't know of many companies that offer a public forum engaging in open dialog between the companies, dealers and customers.

Shane I recall the price drop, but there was still a big difference between US and CND prices.  It was a relativly insignificant changes.

 

[JohnDistai]

I take a lot of personal pride in working for a company that treats its customers, dealers and employees better than 99.99% of the companies out there. There are few companies that would go to the same extents as Festool to keep their dealers and customers happy.

I'm disappointed that you would make a statement such as this.  Employees receive better treatment than employees at 99.99% of the companies out there?  Really?  Have you sampled a bunch of companies to evaluate that claim?  If this is the case, Festool should notify Forbes for inclusion in the "Best Places to Work" list.  Inclusion on the list would be great PR for Festool and would be great for both marketing and recruiting.  The next time I see a list such as this on the news I'll scour it to see if Festool, it's parent company, or any affiliates are listed.

Many companies have open forums to gather customer feedback.  This isn't some revolutionary part of business any longer.  It is required to keep up with the competition.  Maintaining a list like this isn't a just favor for the consumer.  It actually provides Festool a cheap way to collect customer feedback, market, and respond to problems or issues promptly.  Is it nice for us?  Sure.  It's nice for you, too.  Perhaps this is revolutionary in a conservative industry such as tools.  It is not revolutionary in other industries.

In regards to service, Festool is a PREMIUM priced product.  For the price we pay, we expect exceptional treatment.  It isn't any different than the service we would expect from Apple, Lexus, etc.  Of course we are going to complain about the exceptional prices we pay, and especially differences in price in relation to currency and exchange rates.  We would complain about the prices of other premium products, such as the difference in price between Macs and PC's.  Kind of goes with the territory.

In addition, if customers or dealers are not treated well then they have the freedom to choose to buy and sell different products, and Festool would not be in business.  A customer would only willingly stay if the product or margin were so outstanding that the customers and dealers were willing to put up with such abuse.  Please stop implying that having positive working relationships with customers and dealers is some sort of favor exclusive to Festool.

I really don't envy your position as a moderator of this forum.  I know you want to keep things on track and on topic.  However, please be mindful of who your CUSTOMERS are.  We are the ones paying your salary.  Please don't ever forget that.  And the fact that we are CHOOSING Festool, an incredibly expensive, not commonly known brand indicates (at least to me), that we are a bit more educated than the mass consumer.  Since you represent Festool, I ask you to please be cognizant that we are more informed.  Please stop acting like listening to your customers, having a forum, and good service is doing us some favor.  Comments like that come across as arrogant or condescending, and I don't think you personally, or as a representative of Festool want to be viewed or interpreted in that way.

 

[Inner10]

John I think he was trying to show pride not arrogance. but it can be taken either way.

The true test will be to see if the cries are heard no?