Dealer Shakeout

[Jimhart]

A while back there was a thread re Festool changing pricing in a way that lesser volume dealers would probably drop out.

I went into Woodworkers Source here in AZ the other day and found they did exactly that. 3 stores in AZ, all no longer carrying Festool.

Ironically, every time I had gone there looking for disposables (sandpaper, CT bags) they NEVER had what I was looking for.

Rockler, on the other hand, carries a strong selection of peripheral stuff; accessories, etc. The Woodcraft here is pretty good also.

I've seen some recent Ebay auctions that look very much like an internet only dealer in AZ liquidating stock.

My only fear is this; can these 2 things co-exist 1) A knowledgable person I can talk to who really uses the tools and 2) They have to physically stock almost everything.

We frequently have discussed the low level of expertise encountered in retail establishments. While not always rolling in money, I think they are better situated to carry more physical inventory. What happens if the really good online dealers decide they don't want to carry hundreds of thousands of dollars in inventory?

Jim

 

[WarnerConstCo.]

Dont a lot of the internet dealers have things drop shiped?

 

[Dave Ronyak]

I buy most of my Festool products and supplies from one online dealer -- Bob Marino, not because he stocks the item but because he knows the products and has repeatedly helped me choose the right products for the tasks I want to do, and he consistently delivers super fast and accurate service in getting those products delivered to me (about 500 miles away).  In contrast, when I drive 30 or more miles to any of the three nearest dealers who stock Festool products, none of them have personnel who know as much as Bob.  Most appear to know far less than I do about the product line.  And most do not stock what I need.  It makes no sense for me to drive 60 miles round trip to have a sales person look up the item in a catalog and order it for me when I can usually get it faster from Bob.  I go to those other dealers (Woodcraft and Hartville Tool) occasionally, and buy some items when there, but only if I am also going to pick up other non-Festool products and supplies.  Whatever Bob is doing works very well for me, whether drop shipped or delivered from his stock.  In contrast, Woodcraft and Hartville Tool expect me to come again to their store to pick up the items I have ordered and prepaid; they are reluctant to ship them to me and want to charge me again those costs.  That does not make sense to me.

Dave R.

 

[wnagle]

Dave,

I buy at Hartville hardware as well...Most of the time they have what I need and even though they could use some improved Festool training, they usually call and get my questions answered.  I have also odrered online...I aggree, If I have to order something, I can do it online, no tax and free shipping.  I do like to support my local suppliers because I want them to be there for everything else I get.  I also like to support the knowledgable online people as well.Rockler in Cleveland went out of business, Woodcraft in bedford has a really small assortment of stock and like you dave...If I'm there I'll pick up what I need if they have it.  Hartville Hardware is probably my favorite for service and stock for everything in general.  I would like to make a trip to Keim Lumber some time as well as woodwerks in Columbus...

 

[BarryL]

I can tell you that Woodwerks in Columbus has been happy to take any extra cash that I might have on hand.  That stor is nothing short of phenominal.  I have purchased almost all of my big machines there and the owner Ron Damon is a class act.  I am fortunate to live only 45 mins from Woodwerks and when I go in there, I am treated like a friend.  The nice thing to see is that I am not alone in this as I see many people sort of "hanging around". 

Concerning Festool, I know "Bill" and I am sure others in the store have gone to training classes on the Festool tools.  They are knowledgeable on the tools and have much in stock.  The 2700 rail that I needed for my current project was in stock and I was able to head right over and pick it up and get started right away on what I needed to do. 

Oh...and I know it grows on trees but they have a crazy wild wood selection.  If ever you guys want to make a visit there, let me know.

PS...I agree with you on Bob as well.  I made my virgin Festool purchase from Bob...treated me great...great communication and service.  Woodwerks was not carrying festool at the time and now, with my impatience to get my greedy green hands on new green...I head to Columbus.

 

[Jimhart]

Unless I've misread some of Bob's posts here, part of Festools current push is toward making all dealers store more inventory and ship it themselves.
Your reponses echo my concerns exactly. If the push is to have dealers physically stock more, it could favor the brick and mortar dealers.

Woodworkers Source dropped out because they would have had to significantly increase their stock and volume to avoid unfavorable price increases.

Phoenix is the fifth largest city in the US and we now have one Rockler and one Woodcraft selling Festool product at retail. Hopefully, their overall volume will allow them to devote a hundred square feet or so to Festool product and the net yield per square foot will warrant that. Even though many of these outlets are franchised, they should also benefit from chainwide volume pricing.

An individual internet based rep, especially those that sell only Festool, could be smothered by increased inventory requirements.

Bob, please weigh in. I'm under the impression Festool wants to get out of the drop shipping business.

 

[Daviddubya]

...Woodworkers Source dropped out because they would have had to significantly increase their stock and volume to avoid unfavorable price increases....

Jim - Are you sure about your statement above?  Or are you making an assumption?

I buy materials and some tools from Woodworkers Source, as they are local for me too.  The couple of times I asked about Festool there, nobody seemed to know much about the products.  The only time I ever saw any promotion of Festool by WW Source was at The Woodworking Show in Scottsdale two or three years ago, right after they became a Festool dealer.  I am on the WW Source weekly email list, and I don't recall ever seeing anything about Festool products.  I also receive snail mail flyers from them, and again, I cannot recall any promotion of Festool.

There is a local rep, Tim Bonham, and his company is Copper Canyon Investments.  Early on I bought some Festool products from Tim, and he was very accomodating.  He worked out of his garage, but lives way on the other side of the metro area from me, well over a one hour drive each way.  I drove to his house once, and met him half way a couple of times.  For the last several years I have purchased from Bob Marino.  I can order from Bob and get product delivered to my door within a couple of days, no matter what I order.  Bob's product knowledge and advice are excellent.

Frankly, I hope you are wrong about your statement that Festool's dealer policies "could favor brick and mortar dealers".  Time will tell.

 

[Jimhart]

David,

One of my neighbors went in there to pick up some 6" sandpaper (so he could stop using mine  ) and everything Festool was gone.

He was in the Black Canyon store, near 101 and 17, probably the one closest to you.

When he asked about it, he was told that they felt the newest dealer pricing arrangement didn't work for them.

Bob has made some comments here that Festool is looking for dealers to stock more. 

Maybe I didn't connect all the dots exactly right, but these things did all seem to line up. WW Source had a thinly stocked Festool display and now they're out of it altogether.

Jim

 

[tallgrass]

the place that i go is Anderson plywood. they have vastly increased the inventor and now have a very nice display room. i go there even though i could save sales tax and order on line. i like having a local place to touch and feel the stuff before i buy. it would be to bad if festool goes backwards and makes it uneconomical for brick and mortar to keep stocking due to inequities from mail order pressures.so people will go to  store touch the stuff pick the brains of the staff only to order on line to save sales tax.

 

[Bob Marino]

Dont a lot of the internet dealers have things drop shiped?

I am not sure what the percentages are on drop ship versus direct ship orders for online dealers. I know that I had Fesool drop ship more than I direct shipped last year. I (through an excellent and I mean excellent) Fullfillment House, will be shipping most of my orders directly - hopefully starting next week.

Bob

 

[Bob Marino]

Unless I've misread some of Bob's posts here, part of Festools current push is toward making all dealers store more inventory and ship it themselves.

  Jim, this is correct, but the emphasis is on all dealers, b & m's as well as on-line dealers.

Your reponses echo my concerns exactly.

If the push is to have dealers physically stock more, it could favor the brick and mortar dealers.

I am not sure how or why that would be the case.

An individual internet based rep, especially those that sell only Festool, could be smothered by increased inventory requirements.

This could be the case - or accept the smaller profit on having Festool drop ship.

Bob, please weigh in. I'm under the impression Festool wants to get out of the drop shipping business.

Yes, I think that Festool wants to be the shipper of last resort, but no dealer is expected (maybe a few do) to carry all of the over 1000 skews (items) that Festool offers. I think the ultimate goal is for all dealers to have a good deal of stock on hand as well as being knowledgable about the products.

Bob

 

[Notorious T.O.D.]

Even as good as Festool is I am sure that there are some sales dogs in any line that has over a 1000 items to sell.  I am reasonably happy with the stuff the local Woodcraft stocks for Festool and they will order other items if needed although I would just as likely order them myself. It is nice to see and touch and even try some of the tools before a purchase, but I also think at this point I probably know as much as their best guy and more than most of their guys...but I tend to study this stuff a lot too...  I am lucky in to have such a store only 15 minutes from my front door.

Best,
Todd

 

[Bill in seattle]

IMO I believe that festool is following a tract for a manufacture to strengthen  distribution channels and networks. They have worked hard in setting up dealers across the country and took that brave step and stopped selling direct. They felt they had enough confidence in what they had in place. Sure, there were glitches along the way but manageable and fixable. They need to keep things moving and find better ways to do things too.

Dealers have come and gone, each has to make a choice what and if its right for them and at what level. I have to make the same decisions.

I take pride in that I stock well over 1300 skews of all festools and in quantity to meet needs, as well as "darn it "and maintenance parts, like brushes ,switches, sockets ect so that I can make sure someone in the middle of job isn't left hanging.  And yes, I do stock dogs, discontinued items and supplys for tools long gone but still working just fine for those that still use them.

There are huge costs for housing inventory, shipping, accounting, doing inventory, keeping orders current, insurance, building rents, utility's, security, taxes, licenses, payroll, ect, not to mention the auctual investment to buy the inventory to keep on hand. I would assume festool took this in consideration with some of the new changes for dealers.

IMO I think festool is really trying to build better, broader, stronger outlets with more skill and availability to everyone that wants and uses them in the long run.  Dealers having a decent inventory in conjunction with convenient locations for local supply, as well as a online presence for ordering will only strengthen the brand and create more user satisfaction.

Do I feel shaken? You bet, it is great motivation to grow and move forward.

I don't think festool would get out of the drop ship program totally, it does have a place here for some, and for some items because of shipping issues it makes more sense sometimes.

Whats really interesting is that in the big picture, festool is really helping the economy. There are so many people without jobs and losing homes, and so forth, festool by not cutting out the middleman and selling direct, as was a interesting topic in another post,  They sell to the dealers and the dealers sell to the people.  Kind of like the days before everyone thought they had to sell direct to compete and lots of jobs were lost. I'm sure in these times every dealer must be a little thankful about this integrity of festool as every bit helps. This helps keeps employment in all the places where festools are sold.

Just my .02

Bill

And keep the entry's coming in this months contest.

 

[nickao]

Bill is stocking mandatory?
Can an online dealer just drop ship everything?
Do you make the same amount of money drop shipping or buying stock?

What incentive is there to carry physical stock?

It seems drop shipping would be cheaper for you, definitely simpler it would eliminate the long list of duties in your previous posts.

 

[Jimhart]

Bill,

Thanks for giving us some insight into your operation and your thoughts.

One of my favorite sayings is 'you're either green and growing or ripe and rotting.'

Growth and progress rarely happens without change.

From my very limited perspective, the people who have shaken out weren't very engaged in the first place.

Jim

 

[tbellemare]

As has been pointed out, Festool USA is changing structurally. One of the most obvious to customers is that they stopped selling directly a while back.

The most recent change, which has only "side effects" for the customers, is the change in Festool's agreements with the dealers. It really shouldn't matter to the customer base other than to eliminate dealers that weren't dedicated to the product line in the first place.

IMHO, that is the entire focus of the recent changes. It should be a benefit to the customers and also to the dealers that give Festool products the attention that the customers deserve.

We stock everything that we think anyone will ever buy from us and quite a bit more. That includes virtually all tools/accessories, and almost all consumables. We don't want to disappoint a local customer that has an urgent need. Occasionally, we will be out of something or a customer orders something obscure so we make every effort to fill their need one way or another. There are ways to get a customer "over the hump" just by working with them in a friendly manner. Drop shipping might be the answer but we are discouraged from using that avenue as a regular means of fullfillment.

There are certain reasons to use drop shipping, however. We offer personal service (demo's & shipping) in Central Texas but if a customer orders an MFT and they are remote (I can't drive it over to them), it might make sense to ship directly from the factory because MFT's have a fairly high likelihood of getting damaged in transit. The same is true of certain guide rails. That second careless, rough handling can make a big difference...

Tom

 

[Bill in seattle]

Bill,

Thanks for giving us some insight into your operation and your thoughts.

One of my favorite sayings is "your either green and growing or ripe and rotting"

Growth and progress rarely happens without change.

From my very limited perspective, the people who have shaken out weren't very engaged in the first place.

Jim
[/quote

'you're either green and growing or ripe and rotting.'

I'm going to write that on my post it wall, with your permission.

 

[Bill in seattle]

Bill is stocking mandatory?  No
Can an online dealer just drop ship everything?  Yes
Do you make the same amount of money drop shipping or buying stock? Buying stock

What incentive is there to carry physical stock? For me the ability to have something for someone when they need it . I hate it when I go somewhere to get something and it has to be ordered. I will always buy goods locally from someone who stocks to support the local economy first. I know you can't have everything all the time but you can try
I will outsource if not available or if the price is way lopsided. I don't mind paying a little more for something I need locally as I understand what it takes to have the stock of whatever and the service they provide.

It seems drop shipping would be cheaper for you, definitely simpler it would eliminate the long list of duties in your previous posts. You are right...... but that would take all the fun of running a business and trying to live the american dream of being your own boss and trying to control your own destiny

 

[Dan Clermont]

Takes me a week to get product from Lebanon Indiana up to Vancouver, BC Canada. Even longer when we have snow storms, floods, etc and it can mess me up. Sometimes the people at the border like to spend a day counting sandpaper and Domino's while I patiently wait.

In my opinion, a good dealer is knowledgeable and prompt. That typically means having the common stuff in stock!

The snow storms and floods on the left coast make it almost impossible right now as the I-5 had 5 feet of water on it last night!

Dan Clermont

 

[Jimhart]

Bill,

Thanks for giving us some insight into your operation and your thoughts.

One of my favorite sayings is "your either green and growing or ripe and rotting"

Growth and progress rarely happens without change.

From my very limited perspective, the people who have shaken out weren't very engaged in the first place.

Jim
[/quote

'you're either green and growing or ripe and rotting.'

I'm going to write that on my post it wall, with your permission.

Bill,

Absolutely. I heard it from a lady named Danielle Kennedy. Likely she heard it from someone else as well.

Jim