Blues said:
I'm not sure if I'd buy the argument that 'Costs' have gone up and its being passed on to the consumer. Well, Festool has been increasing their prices yr on yr (not just during the pandemic - its a culture) - and they have been getting away with it since they cater to a niche market. Costs typically go down for most consumer goods since every company optimizes their supply chain and every companies purchasing department bargains with their suppliers to drive prices down. Take the electronics market, every year the prices go down with improved functionality and features! Camera's, PC's and Laptops, prices drop significantly yr on yr. The top models try to retain their prices for vastly improved hardware / software capabilities. So why then as a consumer should we accept a basic tool company to increase their prices?! Their tools are not using bleeding edge latest and greatest technology. Some of their drill still use motors with brushes! Some tools like the RO150 and 2200 have been around for years! Yes, they are well designed and solidly built tools - which is why you pay a premium to begin with. But this yr on yr price increase is un acceptable. When you go on a job, you cant simply charge more just because you use Festool tools. Everyone wants you to deliver more for less. Why then should we not expect the same from Festool? I would even argue that older tools that have been around should drop in prices - not the other way around. Don't you guys agree?
Actually - no I don’t. No-one likes stumping up for anything which costs more this year than it did last year, especially if this is an annual event. I totally take your point about PC’s, phones, TV’s and similar - but these are all home consumer goods which get bought by maybe half of a country’s entire population. Upmarket power tools don’t. It’s a simple fact of manufacturing economics that your entire R&D and manufacturing cost has to be recouped over the number of units you think you can sell over the product’s lifetime, which, in the case of smartphones, is measured in tens of millions of units per year. Just how much do you think a product like the Domino XL (for example) cost to design and prototype? How much was that vast pile of custom tooling for all of the metal and plastic parts? How much does it cost them to buy in all of the other components, and then employ people to build it, test it, pack it, ship it, and keep some money back so there’s some in the contingency pot to honour a warranty claim? And all those people will happily work 5-10 years and never get an inflation-linked pay raise? The components suppliers, trucking companies, phone company and multitude of other business partners never raise their prices? What about the fact that this equipment is built in a state-of-the-art European factory with proper workers rights, holidays, pension schemes and healthcare instead of a Far-East sweatshop? How much does that building cost to heat, light, maintain, and insure?
And then - how many XL’s get sold annually? Not millions - that’s for sure. I have no clue what the actual number is, but I’d guess at what - no more than a global few hundred units a month for such a specialist product at that price level maybe? Or way less? And as for them dropping the prices of older models, I’d also hazard a guess at the fact that we’re lucky enough to have products like the XL whose very existence is highly likely to be subsidised by price increases on established, consistently larger-volume sellers like the TS55. Machines like the 2200 are still in the product line after many years simply because it's still practically unbeatable, it's still absolutely the best half-inch on the market IMO. Why would they change something so good? And can you honestly imagine the huge line of woodworkers camping overnight to be at the front of the toolshop queue when the new 'this-year's-model' 2200 gets released every year - just like the gullible phone fashionistas all do? It's not gonna happen.
Manufacturers don't raise prices to see if they can 'get away with it'. They do it because their circumstances have changed and they'd like to stay in business. There are two sides to every story. As ever - we all have a choice - pay it or go elsewhere. There are no guns being held against the heads of buyers. The way I've always looked at this, is that an expensive, high-quality tool hurts just the once - when you pay for it. A cheap, nasty tool hurts every time you use it.
And you
can charge more if you're running more upmarket equipment, just like the tow-truck guy who's just spent $250,000 on his new Kenworth ultra-rig, charges more than the guy running a 25-year-old ex-Army Diamond T with a towrope. My job rates are partially what they are because I’ve spent half a lifetime investing in top-quality equipment which helps me do the highest-quality work I possibly can, and I'm fortunate enough to work for customers who happily accept that quality costs more. Tools - whether expensive or cheap - are a straightforward business expense which get factored in just the same as everything else. A £1,000 Hilti drill gets depreciated over 5 years / that’s £16.67 a month which gets factored into my rate calculation. Every tool I own is on that depreciation list, along with every other business cost - and those costs, along with my earnings on top, are what sets the rate. Just like Festool - if customers don’t like what I charge, they’re free to go elsewhere. And also just like Festool - there's always someone else who will do the job a little cheaper and a little worse.
And as for your point about everyone wanting you to deliver more for less - Day #1 Lesson #1 on going it alone into self-employment many decades ago was '"If you get more than three-quarters of the jobs you quote for, then you're not charging enough". No disrespect intended - but I can't help but noticing the irony at the fact that you're angry about people wanting more from you for less - but that's exactly what you're expecting Festool to do. If your costs increase - raise your prices. It's how things work.
Greetings from the UK.
