Festool price increase March 1st 2011

[mwildt]

Guess it's official now. Just got an e-mail from rockler with a pointer to their latest flyer where the Festool increase is listed. Now the question is what items is increasing, hopefully not all. Maybe Bob or another dealer can share the info ?

If I violate rules feel free to remove this link.

Rockler flyer - see page 6-7
http://content.yudu.com/A1qnlm/Rockler012911V1/resources/index.htm?roi=echo3-7893934737-5258595-0850f3fec64c400ddc440b382b29a141&

 

[GPowers]

Oh well the prices were stable all of 2009 and 2010. So I guess it is to be expected [crying]

 

[Kodi Crescent]

How come we don't expect prices to go down?  The press says the economy is in the crapper, contractors I've spoken with say work is tight, but we expect a Festool price increase just because the prices haven't been increased in the last 2 years?

Why is it that we have to take pay cuts, but it seems that no one else does?

 

[tbellemare]

I can't answer your last question, Kodi, but have you noticed the inflation in feedstock and other commodities that are part of the manufacturing process for tools?

I have manufacturers whose products are primarily chunks of steel. Those products have spiked by about 50% twice in the last few years.

I'm surprised that anyone in business can keep their prices steady. I think if that's happening, they are absorbing the inflation, to which they are subjected.

Have you noticed the price of commodities going down? I haven't...

Tom

 

[GPowers]

...but have you noticed the inflation in feedstock and other commodities....

One of the reasons feedstock, like corn, is getting expensive is we are burning our food to power our cars here in America. America has such a great plan, lets make automobile fuel out of food and burn it in "Flexfuel" cars and trucks.

Like the world does not already have a food storage, we are making are worse.

 

[PeterK]

Come on Greg! How dare you complain about using our tax dollars to subsidize farmers growing corn for fuel, so we can pay more for ethanol based gasoline and getting lower gas milage all at the same time! Seems like the perfect government program to me.
Definitely one of my pet peeves.

 

[Ken Nagrod]

Ohh horse and buggy.  The good ol' days.  [smile]

 

[Nigel]

        Seems to me that inflation is/will be caused by the fed/ecb 'printing' digital money to bail the banks who then use this free {kindly backed by the taxpayer} money to speculate on commodities.The whole debacle just dilutes the buying power of everyone's dollar/euro.At some point something has to give.Hope it's a few of those robbing banks!That's my  [2cents],it's all i've got  [huh]

      As for gmo corn you wouldn't want to eat it would you?

 

[tbellemare]

Ohh horse and buggy.  The good ol' days.

As for gmo corn you wouldn't want to eat it would you?

Isn't it nice that one can use tools that don't require a Buggy Whip or whacky corn products?

Tom

 

[Kodi Crescent]

Tom, I don't track the commodities market or supply chain prices.  Maybe you have time for that and an interest in it.  I don't.

I'm just asking a general question.  Why are we so accepting of a price increase when the rest of us are hurting?

 

[WarnerConstCo.]

Tom, I don't track the commodities market or supply chain prices.  Maybe you have time for that and an interest in it.  I don't.

I'm just asking a general question.  Why are we so accepting of a price increase when the rest of us are hurting?

Why do people think that because this may be a slow market or whatever, that someone should be willing to do a job, or offer a product cheaper?

Sounds like 50% of all potential customers I meet with.  Oh, we thought we could get a deal because you need the work/money.

I would rather sit at home then loose money working.

 

[Joe Smith]

I would rather sit at home then loose money working.

I have seen people and businesses go under with this thought process instead of adapting to the market.

Profit is profit and even a small amount of profit is better then zero profit, especially when some people are going hungry.

BTW, I seriously doubt that Festool is not making their profit margins. Like any other business, they will adjust to meet the market if that is needed.

Festool = quality, less sales, and higher prices
Ryobi (or whatever tool cheap company) = quantity, more sales, and lower prices

Different companies with different business models adapting to the changing markets.

 

[nickao]

It works both ways , people go out of business for taking jobs that do not provide ENOUGH profit, then when the right jobs come they have to pass on them and complete the small profit jobs.

One rule I follow. Charge what the work is worth to you to do it, period, not based on what others are charging or the market. If you are doing a job and cussing under your breath that you are not getting paid enough your work suffers and the customer service suffers.

Its a fine line, but undercharging just to work is ridiculous. It takes up your time looking for the right jobs. You can take a job where you barley make a thing while Warner stays home 3 weeks and then gets the right job. In one week he makes what you made in 3 weeks working your butt off, all because he put his time in the right place. He is happy and loves his job,  you are wondering why you do it. (this is an example, nothing personal)

Just working to break even or make a wage that keeps you in poverty is far worse than staying home and searching for the right job.

 

[WarnerConstCo.]

It works both ways , people go out of business for taking jobs that do not provide ENOUGH profit, then when the right jobs come they have to pass on them and complete the small profit jobs.

One rule I follow. Charge what the work is worth to you to do it, period, not based on what others are charging or the market. If you are doing a job and cussing under your breath that you are not getting paid enough your work suffers and the customer service suffers.

Its a fine line, but undercharging just to work is ridiculous. It takes up your time looking for the right jobs. You can take a job where you barley make a thing while Warner stays home 3 weeks and then gets the right job. In one week he makes what you made in 3 weeks working your butt off, all because he put his time in the right place. He is happy and loves his job,  you are wondering why you do it. (this is an example, nothing personal)

Just working to break even or make a wage that keeps you in poverty is far worse than staying home and searching for the right job.

You used more words then me but, that was my point.

I have a couple right now that I really don't want to do because I know there is just not quite enough money left in the end to make it worth all the effort.

Unfortunately they are for previous customers and I almost feel like I have to do it.  Now it is a matter of finding the sweet spot with the materials and work involved, to see if it is worth my time to get off the couch.

Taking work just to have work is not always the best way.  Some people just can't afford my services and it takes a while before you realize that.

If I want to just make wages, I will get a real job.  That would eliminate about 30 hours a week of paper work and hustling. 

 

[Kodi Crescent]

Tom, I don't track the commodities market or supply chain prices.  Maybe you have time for that and an interest in it.  I don't.

I'm just asking a general question.  Why are we so accepting of a price increase when the rest of us are hurting?

Why do people think that because this may be a slow market or whatever, that someone should be willing to do a job, or offer a product cheaper?

Sounds like 50% of all potential customers I meet with.  Oh, we thought we could get a deal because you need the work/money.

I would rather sit at home then loose money working.

Sometimes keeping the lights on is preferable to going out of business.  Depends on what you have for overhead and what you have in the bank.  Life is full of opportunity cost decisions.  If you can afford to pass jobs up because there isn't enough profit in them, then it must be good to be you.  Others may not be in that boat.

 

[Joe Smith]

I fully understand what you guys are saying and normally would also fully agree with both of you, but right now, I am seeing a whole lot of out of work people.  Almost every one of them refuse to adapt to the market and their families are going hungry.  They all tell me that they won't change their prices.  So they are seriously struggling with making ends meet when there is work out there.  

For example, recently I had three people come and give me a price to texture my wall after a remodel, because I did not want to bother with it. It was 5'x4' square and I wanted it to match.  I did not have the hopper gun and I knew the job would take less then 10 minutes.  All three of them wanted over $200.  I said that is BS and I decided to do it myself.  $50 for a hopper gun and I was done in 20 minutes.  Bottom line is those guys could have made $100 (because that is what I would be comfortable paying), but they instead held out and made none.

There are too many people holding out for the rates they made when the economy was good and that time has past.  To survive in any market, you have to be able to adapt to the market.  

All I know is that if I need to provide for my family and I was having trouble finding the rates that I wanted, I would lower my rates.  

If you guys are getting the rates you want, cool. I am happy for you, but not everybody is getting what they want.  

 

[Kodi Crescent]

Joe, I just went through a similar experience myself.  I had a fence built.  I could have built it myself, but needed it to go up ASAP due to a dangerous situation with my scumbag neighbor.  I had all the companies quote the same spec.  There was one company who I wanted to do the job, but they wanted way too much money for their reputation.  I gave the guy every opportunity to negotiate to what my next best alternative was.  I wasn't even asking him to meet it.  I was willing to pay a premium for his services, but not an excessive premium.

To make a long story short, I hired the cheaper guy.  He did a quality job.  The other guy got the satisfaction of sticking to his price.  I hope he is flush with business and that that was the right decision for him.

 

[WarnerConstCo.]

For example, recently I had three people come and give me a price to texture my wall after a remodel, because I did not want to bother with it. It was 5'x4' square and I wanted it to match.  I did not have the hopper gun and I knew the job would take less then 10 minutes.  All three of them wanted over $200.  I said that is BS and I decided to do it myself.  $50 for a hopper gun and I was done in 20 minutes.  Bottom line is those guys could have made $100 (because that is what I would be comfortable paying), but they instead held out and made none.

Being in business is not free.  That is a 250.00 dollar job no matter what.

They already made one trip there to look at it.  Then have to schedule it and then send someone out.

Vehicle insurance, GL insurance and WC are three things you need to cover in your costs.

charging a 100 bucks for that job would have probably not made them any money and in reality, would have cost them money to do it.

They already wasted time making a trip just to look at it.

Why does no one have a problem paying a plumber or electrician a trip charge?

It boggles my mind they way people think.  Do you think your employer is losing money employing you?  

Say you make 25.00/hour, in reality your cost to an employer is about 45-50/hr.

I guess it is a crime to be profitable.

Anyone think about the fuel that is consumed getting these goods here?  God forbid I charge enough to provide insurance to my family, stash some in my savings and then have something to put in my retirement fund.

 

[Joe Smith]

Warner, we are just looking at it differently. 

"God forbid I charge enough to provide insurance to my family, stash some in my savings and then have something to put in my retirement fund."

I agree, you should charge enough to do that, but if you or that person are not getting jobs, then you are bringing home nothing. 

For me, a 10 minute job is not worth that, no matter what. Hopefully for them, they find people who are willing to pay their price.  I do not like to see anyone have hard times.

I think some markets are out-pricing themselves and to survive, they will need to adapt to the market.  Those three guys are not adapting and I have a good feeling they will have two choices, to adapt or to find another market/job.

I see this alot with people selling things on Craigslist or Ebay.  They have a item that they believe is worth a set amount.  If that item does not sell for what they thought it is worth, then it is NOT worth that amount (at least at that time). Something is only worth what someone else will pay for it. It does not matter what all the costs are behind that item.

 

[WarnerConstCo.]

In reality, you do not really want to get all the jobs you look at.

If you do, you are too cheap.  30% is a good number to strive for.  I used to try and do everything for every one.

I thought it was great, working 50+ hours a week but, in reality all I was doing was burning up fuel and wasting a ton of time.

Yes you can cut some out of your overhead to reduce costs but, there is still only so much you can trim.

I do have a minimum charge though too.  It is not worth packing up tools to drive out to someone's house for 100 bucks.

Do we think Festool wants everyone to buy their tools?  I doubt it, they offer a product that in reality eliminates probably 50% of the consumers.

I know a few people that will work for chump change but, they never seem to last very long before you see them with an orange apron on asking you if are finding everything.

Is anyone offering to have their wage's reduced so that their employer can get more work/save some money?

Some of the greatest business's and most wealthy family's sprung up during a hard economic down turn.  If you can expand and prosper in down trodden times, then the sky will be the limit.

I have passed up numerous big projects because the home owner was going to call 5 different people to get prices (to keep the honest they say), big jobs take a lot of time to put together a # for.  I got wise and decided that some people were not worth wasting my time on.