Festool UK TTS fined 8.2 million Euros for price fixing in Europe!

Well I was thinking XL but I'm gonna sit and wait a while now  [tongue] [tongue]
 
jc said:
fritter63 said:
When our local Festool dealer shutdown, Festool came and collected all the (non-demo) Festool stock.
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This is insightful.  So Festool actually owns the dealer stock (I'm assuming this to be the case) maybe dealers can chime in.  :)
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I don't think that Festool owns the dealers stock.  I say this because if they did, the local Woodcraft would have 5 of everything.  Why wouldn't they if they didn't have to pay for it?  I have been in the presence of the manager when he ordered new inventory and they definitely have to pay for it.  They don't keep Kapex's around just for that reason.  They will order you one but they don't like to keep a big inventory of anything Festool. 
 
HowardH said:
jc said:
fritter63 said:
When our local Festool dealer shutdown, Festool came and collected all the (non-demo) Festool stock.
Click to expand...

This is insightful.  So Festool actually owns the dealer stock (I'm assuming this to be the case) maybe dealers can chime in.  :)
Click to expand...

I don't think that Festool owns the dealers stock.  I say this because if they did, the local Woodcraft would have 5 of everything.  Why wouldn't they if they didn't have to pay for it?  I have been in the presence of the manager when he ordered new inventory and they definitely have to pay for it.  They don't keep Kapex's around just for that reason.  They will order you one but they don't like to keep a big inventory of anything Festool.
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Just telling you what I was told, they def didn't have control of stock when closing.
 
I am slightly concerned with this news as all small independent retailers should be.
In April this year, we were approached by Festool to become a key account in Kent so in June we started our new venture and we have done really well so far.
[eek]
However, this news could really effect our business as we count on people coming in, picking up the item and buying it.
Now, I am worried that people will come in, pick it up, try it and then purchase it from an online store that will make a tiny profit.

Who were the people complaining about price fixing? Festool products are well worth the money.
Manufacturers of ironmongery use RRP's just like Festool.
I believe that people that sell any lower than a RRP shows that retailers is saying we don't believe an item is worth that, so we will cut the price, sell 100's more products earn a £1 on each one.
I have countless numbers of reps that dislike retailers that sell below a RRP, it devalues the product and really a RRP if given should be sold at RRP prices.
Festool always promote the products, they give discount vouchers in magazines and they always promote their products with help from the reps
to visit a customer and give a discount vouchers when the item is purchased, this is a fantastic way for customers to get a brand with a little extra discount.
 
anglefix said:
I am slightly concerned with this news as all small independent retailers should be.
In April this year, we were approached by Festool to become a key account in Kent so in June we started our new venture and we have done really well so far.
[eek]
However, this news could really effect our business as we count on people coming in, picking up the item and buying it.
Now, I am worried that people will come in, pick it up, try it and then purchase it from an online store that will make a tiny profit.

Who were the people complaining about price fixing? Festool products are well worth the money.
Manufacturers of ironmongery use RRP's just like Festool.
I believe that people that sell any lower than a RRP shows that retailers is saying we don't believe an item is worth that, so we will cut the price, sell 100's more products earn a £1 on each one.
I have countless numbers of reps that dislike retailers that sell below a RRP, it devalues the product and really a RRP if given should be sold at RRP prices.
Festool always promote the products, they give discount vouchers in magazines and they always promote their products with help from the reps
to visit a customer and give a discount vouchers when the item is purchased, this is a fantastic way for customers to get a brand with a little extra discount.
Click to expand...

They are not well worth the money.... If my local store sells something £10, £20 more expensive than buying online i will buy from them. If its £100-£150 more expensive. sorry i will buy online...

John....
 
I agree with Anglefix, all too often people try out goods in retail shops and then buy on-line.  I think Festool are worth the RRP and I'll be sorry to see Festool sold on price rather than customer service.  At the end of the day no-one forces you to purchase; presumably those of us who have purchased see the merit and value of the tools and customer service.  All these so called disgruntled users make me laugh.  I've never been a disgruntled user for any amount of time, because if I'm not happy with the product I wouldn't buy it again.  Simple as that.  If they're not worth the money why would you pay?  That's an irrational statement.  Presumably you pay because the Festool tool does something no other tool would.  And that represent value to you.  If it doesn't then why aren't you buying another brand?

No doubt we are now going to see a fall in the second-hand value of Festool as well.  A real shame.

Troll
 
i don't think festool germany are taking the fine laying down i hear they are fighting the action, we shall wait and see.
 
I'm not a disgruntled user - far from it as I have a serious Festool habit and affection for all the desirability of the Festool range.  That does not mean that I am happy for Festool to operate in breach of the law on price fixing.

I will decide, and the rest of the market will decide, what is the preferred way of purchasing the kit, recognising in individual circumstances whatever weighting the market gives to convenience/price/personal service/stock availability etc etc.

This does not mean that small dealers will be disadvantaged, just that the market can decide where it places its business.  So far as I know, there is nothing to stop Festool assisting local dealers with sales support in their local showrooms, so if these are important to Festool's distribution channels, they will find a way of supporting these

I do not think that Festool customer service in the UK is really all that it is cranked up to be - speaking from my own experience - and thus not something that warrants a premium in itself.

Just one thought - I do not need a Domino XL, but have thought about buying one, then rejected the idea; now with 10/11% off, I am thinking perhaps it is justifiable...  If I decide to buy one now (still an eye-watering £827 with one size cutter..) , who wins or loses?  (I see only winners - Festool and the dealer, neither of whom would have had a sale otherwise). Just a competitive market functioning as it should.

Re the second hand values, I guess we will see a reduction before long - that's life; not necessarily good or bad; I have bought and sold second-hand kit (and bought new) and so overall what you gain on the swings you lose on the roundabouts...

Cheers

 
I used to be one of the biggest critics of Festool price fixing (see some of my previous posts).  Now however, I've changed my mind.  I was wrong.

Companies that have high quality products with above average prices must ensure their retailers can make a reasonable margin because volume is much less than low priced products.  Otherwise, these retailers won't bother carrying the product.  Ultimately, this is not in the consumer's interest.  As we've seen with the growth of Walmart and other big box stores in this country (the US), once the large retailers get all the business, they call the shots and the consumer is left with nothing but cheap, disposable products.   
 
In the States...Apple has a fixed price...customers don't have to buy Apple...they can buy Samsung or one of a dozen other products.  Same with Festool...there are hundreds of sanders, routers, saws available.  If the officials think that forcing price wars is a good thing...look at what happened to the quality of tools that are now available at HD & Lowes.  I talked to a HD store manager about this once, and he told me that they basically killed their power tool business by demanding price concessions from manufacturers (so they could offer discounts)...Most companies (not Festool) build to a price point, so if HD says I want a $99 drill...other companies  make it with parts that allow them to sell it for $99 and retain a healthy profit margin...the next year they want a $89 drill...they make it with parts that allow them to sell it for $89.  Next thing you know, you get a product that last 6 months instead of 6 years...I know, I've worked for big public corporations...trust me this is how it works!

Let's face it....Festool tools aren't easy to get your head around, and they are certainly priced at a premium.  But, unless you have a resource like the FOG or a good dealer who is willing to explain and demo the tools and their benefits most potential buyers would not have a clue as to what these tools can do for them.  When was the last time someone at a big box store could tell you little more than which aisle tools were on?  I think that forcing dealers to compete on service creates an environment where customers get advice and support, and the brand is allowed to maintain a good quality image...some companies are committed to this philosophy....Festool being one of them.  My understanding is that at one point in Festool's history, you had to go to the factory and explain why you needed a Festool...if they didn't think it was the right tool for you...they wouldn't sell it to you...now that is commitment to doing the right thing!  If a buyer does not see the price/performance value in purchasing a Festool product...that is their choice...not the governments to decide. 

The part I don't understand, is if a dealer has a known and predictable profit margin...why would they want to give that away...unless they suck at customer service [eek]

Just MHO, based on 20+ years of working in corporate america.  Now if the situation was that Festool was scheming with other tool manufacturers to set prices for tools...that would be another issue, but that is not what is happening here. 
 
does this law apply just ot festool or to the whole group. so the price of all the companies wont be fixed
 
Martin Johnson said:
In the States...Apple has a fixed price...customers don't have to buy Apple...they can buy Samsung or one of a dozen other products.  Same with Festool...there are hundreds of sanders, routers, saws available.  If the officials think that forcing price wars is a good thing...look at what happened to the quality of tools that are now available at HD & Lowes.  I talked to a HD store manager about this once, and he told me that they basically killed their power tool business by demanding price concessions from manufacturers (so they could offer discounts)...Most companies (not Festool) build to a price point, so if HD says I want a $99 drill...other companies  make it with parts that allow them to sell it for $99 and retain a healthy profit margin...the next year they want a $89 drill...they make it with parts that allow them to sell it for $89.  Next thing you know, you get a product that last 6 months instead of 6 years...I know, I've worked for big public corporations...trust me this is how it works!

Let's face it....Festool tools aren't easy to get your head around, and they are certainly priced at a premium.  But, unless you have a resource like the FOG or a good dealer who is willing to explain and demo the tools and their benefits most potential buyers would not have a clue as to what these tools can do for them.  When was the last time someone at a big box store could tell you little more than which aisle tools were on?  I think that forcing dealers to compete on service creates an environment where customers get advice and support, and the brand is allowed to maintain a good quality image...some companies are committed to this philosophy....Festool being one of them.  My understanding is that at one point in Festool's history, you had to go to the factory and explain why you needed a Festool...if they didn't think it was the right tool for you...they wouldn't sell it to you...now that is commitment to doing the right thing!  If a buyer does not see the price/performance value in purchasing a Festool product...that is their choice...not the governments to decide. 

The part I don't understand, is if a dealer has a known and predictable profit margin...why would they want to give that away...unless they suck at customer service [eek]

Just MHO, based on 20+ years of working in corporate america.  Now if the situation was that Festool was scheming with other tool manufacturers to set prices for tools...that would be another issue, but that is not what is happening here. 
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I agree
 
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