My Local Woodcraft is Clearing Out all the Festool Merchandise in Stock

[wcmlutz]

Our local Woodcraft decided that they couldn't make any money selling Festools, so they decided to clear out their inventory. The sales guy said the reason was due to a recently implemented tiered pricing arrangement due to sales volume. Since our Woodcraft is a low volume dealer, they would only make a 3% margin on sales which isn't enough for them to bother with any more. The salesman mentioned that approximately 30 of the Woodraft stores would not be selling them any more. This is sad to see. Guess I will just purchase from some of the Online vendors.

Mike

 

[nickao]

This sounds like Festool is feeling the "economy crunch". This could be a way to maximize their profits at the same time not telling the lower volume places to just forget it, potentially getting bad word off mouth from these smaller venders.. Effectively if this cause's the low volume dealers not to make any money it takes away the smaller stores incentive to sell, why not just say hey we as Festool are not letting you sell our stuff. Well for some good reasons, bad word of mouth is one..

Festool may be using this tactic to make overall less tools and get the tools to where they are selling. This saves on shipping and many other expenses they incur in the selling chain, especially at the lower volume stores.

This is a sound business move many industries use, even if it ruffles a few feathers, the feathers that do not make them much money anyway is no concern to them.

Nickao

 

[Bob Marino]

This sounds like Festool is feeling the "economy crunch". This could be a way to maximize their profits at the same time not telling the lower volume places to just forget it, potentially getting bad word off mouth from these smaller venders.. Effectively if this cause's the low volume dealers not to make any money it takes away the smaller stores incentive to sell, why not just say hey we as Festool are not letting you sell our stuff. Well for some good reasons, bad word of mouth is one..

Festool may be using this tactic to make overall less tools and get the tools to where they are selling. This saves on shipping and many other expenses they incur in the selling chain, especially at the lower volume stores.

This is a sound business move many industries use, even if it ruffles a few feathers, the feathers that do not make them much money anyway is no concern to them.

Nickao

Nick,

  I, nor any dealers are privy to Festool's marketing/sales meetings, but my guess is that Festool wants to encourage dealers to "properly" and properly is my word, demonstrate, sell and provide appropriate support for the tools. Their goal is not to lose  dealers, nor is it a reaction to the "economy crunch" - I am sure these plans were formulated months ago, if not longer.
Bob

BOB

 

[nickao]

It was conjecture Bob and if you are not privy how do you know. The economy crunch was foreseen by many of the better companies last year, so I do not think my conjecture is totally out there. I was not dissing them, but stating that the tired pricing is a proven business tactic.

I would hazard to guess 50% of the Festools are sold through online sales, so I do not buy your demonstrating thing.

Woodcraft does demonstrate the tools fairly well, though I do not love Woodcraft and think some of there staff are not the best.

I would buy from you and have, with no demonstration. Out of over 15,000.00 in Festools I have never held nor looked at a Festool in a store and I think many are like me and in the future more will be(buying online). I purchased based on the statements in this forum. I may be wrong, but if you did not sell online I think you may make a lot less money on your walk in sales alone with your demonstrating.

Again, I was not dissing Festool and only thinking out loud, commenting on the tiered pricing and its timing in relation to the economy and Festools keeping profitability. They better react to the economy and am certain they are in many ways.

Nickao

 

[Bob Marino]

It was conjecture Bob and if you are not privy how do you kn ow and the economy crunch was foreseen by many of the better companies last year, so I do not think my conjecture is totally out there. I was not dissing them, but stating that the tired pricing is a proven business tactic.

I would hazard to guess 50% of the Festools are sold through online sales, so I do not buy your demonstrating thing.

Woodcraft does demonstrate the tools fairly well, though I do not love them and think some of there staff are not the best.

I would buy from you and have, with no demonstration. Out of over 15,000.00 in Festools I have never held nor looked at a Festool in a store and I think many are like me and in the future more will be. I purchased based on the statements in this forum. I may be wrong but if you did not all online I think you may make a lot less money on your walk in sales alone.

Again, I was not dissing Festool but commenting on the tiered pricing and its timing in relation to the economy and there profitability and think they better react to the economy and am certain they are.

Nickao

Nick,

Though I am not certain - as I stated - I am fairly in some type of loop, certainly more privy than customers (why wouldn't I be!)
I never thought  you were dissing Festool, not even a little bit.  I will certainly not get into specifics here, but I do have the Festool sales agreement and have read and discussed it with the appropriate powers that  be and I don't agree with your assessment.
Festool does want to greatly encourage brick and morters and that includes properly demonstrating the tools.

Bob

 

[nickao]

You know more than me about Festool company Bob, no question.

Are they crazy. Brick and mortar is out, online is in and will be more and more. The overhead on brick and mortar can kill so many businesses especially a small businessman just starting out.

Even the groceries get delivered here in Chicago and with gas at what it was a 35.00 trip to look at a tool is out. So if they are pushing  brick and mortar I question their common sense. I guess in certain big city markets it makes sense, but I am sure the online business through their retailers is their greatest growing segment.

 

[jaegerhund]

I've only bought Festool tools online --- I've never seen a Festool product demonstrated.  I usually do a little research on my own before buying.  I don't think there are too many locations in Louisiana where I could try out before buying if I even wanted to.

Justin

 

[wnagle]

Bob,  

Not to mention a lot of these stores want your business but won't keep much in the way of stock.  If I drive there and they say they can order it... I say so can I and cheaper.  Hartville Hardaware is one exception, they work hard to keep you as a customer in many ways... they stock many products, and I want them to stay in business, so I give them my business when I can.

 

[Bob Marino]

I want to make it clear, because, maybe I am giving a false impression. Festool is encouraging all dealers to have more tools on hand (including accessories and consumables), have employees that are knowledgable, and where applicable, demonstrate the tools in a proper manner.
Yes, they are encouraging b & m's, but within the framework listed above.

Bob

 

[honeydoman]

I bought my first festool the atf55 saw and guide at a woodworking show or jlc live, I think because it was demo'd to me.  since then I have bought most of my fesstools at the local woodcraft store, 45 min away.  and same thing they carry it in stock as I want it now.  also I have bought lots of tools online from amazon mainly but several others as the price is less due to tax issue.

but with festool I prefer to go their lookat it and buy it.  I also do lots of research on line, ask questions on forums and then buy.  as with the kapex it would have been a pain to buy and send back 4 kapex and keep waiting for the next one.

so both have their advantages.

 

[Dan Clermont]

That is too bad. I've never been to a Woodcraft. Were they a good stocking dealer with plenty of consumables?

How was the knowledge base of the employees?

I would think that if they had knowledgeable staff and carreid most consumables to draw customers back into the store they would have been very successful and the volume may have been enough to make it worthwhile.

Dan Clermont

 

[peter halle]

Woodcraft stores are franchises and are able to make their own decisions on some issues.

 

[Bob Marino]

Woodcraft stores are franchises and are able to make their own decisions on some issues.

Exactly correct and as such each store (and every other dealer) will decide if stocking/selling Festool is financially worth it for them.

Bob

 

[wcmlutz]

They are a franchisee. They can make their own decisions on what they carry. They typically had a few of the tools and a good amount of consumables mainly sandpaper. They weren't the most knowledgeable about the tools. They also didn't have the space to show off more of the tool line. I am not real certain what kind of volume they did, but the same tools appeared to be there every time I visited.

Mike

 

[nickao]

They did not even franchise until 1998 and now out of 80 Woodcraft only 3 are still corporately owned. It makes one wonder why they do not own more stores themselves.  At one time they owned over 20 stores corporately.

nickao

 

[UCLA Fan]

Just my two cents (or .00001 euros) worth,

I completely disagree with the statement that Brick n Mortar is dead. In fact, those stores that have both a BnM and online business seem to be on the right track. I love my Festools BUT I will not spend that kind of money on a product I have never laid my hands on. To me that would be like buying a high end car (you know a Buick or an Oldsmobile even lol) without a test drive. Once I have tried the tool I may indeed look to the internet for my purchase, but only if the price difference is significant. Here in Calif we have to pay 8.25% for sales tax but not on out of state internet purchases. If the price is large (more then several hundred dollars) then I will buy from a free shipping online dealer. But I buy all my supplies from my local Rockler. I only wish they carried more of the festool line. I hate having to wait for sand paper in some grade they don't have locally and I have to buy online. So if Festool encourages it's dealers to do a better job of stocking and demo'ing then good for them. If woodcraft can't step up then make room for someone who will. There is a BnM dealer (Andersen Plywood) 20 miles from my local Rockler that has a huge selection of Festool and plenty of stock so they are getting more and more of my business.

I am a finish carpenter and furniture builder by trade and NO ONE on any job site I have ever been too in the Los Angeles area has even heard of Festool. I always get ohhs and ahhhs when they see my setup but they have never heard of it. They all buy their tools from local BnM's and never shop online. This is a HUGE market and many of them would invest in Festool if they saw it in there local BnM. I think the move to BnM is critical for Festool's long term success and although there are growing pains I hope they make it work!

 

[nickao]

I bought a 2002 PT cruiser in 2002 . They dropped off the keys I gave them a check I never went to the dealership. The best car purchase I ever made and no hassles.

I guess different people want different things, I hate salesman that know less than I do and hate wasting time I could be making money.

That's my opinion, brick and mortar for some, I just do not have time.

Nickao

 

[Jim Becker]

They did not even franchise until 1998 and now out of 80 Woodcraft only 3 are still corporately owned. It makes one wonder why they do not own more stores themselves.  At one time they owned over 20 stores corporately.

The trend in many "chain" businesses has been to move away from company owned locations to franchises over the past x years. (It's happening in the restaurant business a lot recently) A major reason has to do with accounting and risk. They can run a much leaner and adaptable business if they don't have the direct responsibility for each of the brick and mortar locations.

BTW, Mr. Marino does a mean demo...

 

[woodshopdemos]

Just my two cents (or .00001 euros) worth,

... Once I have tried the tool I may indeed look to the internet for my purchase, but only if the price difference is significant. ...If the price is large (more then several hundred dollars) then I will buy from a free shipping online dealer. But I buy all my supplies from my local Rockler. I only wish they carried more of the festool line. 

  Just look at that statement and I don't mean to single out this one person. The view is too often held. Here's the gist of it: "Demo it to me B&M store so that I can go home and order it on the internet" ? and we wonder why stores don't want to put more into inventory or have better sales/demo time and space.
  This philosophy has been eroding many marketing segments. The camera store is a biggie. In the 60's, you would have a hands on demo and then buy. Then the mass merchandisers entered the marketplace with cost plus 5% but no demo and we wondered why the neighborhood store only sells films, frames and greeting cards.
  I am lucky. My Woodcraft stocks Festool products, demos Festool products and sells enough to keep the brand active...but they figure they get half the sales. They can tell. When they demo but don't sell but a week or so later the person comes in for suppplies for the tools, they can figure it out. And people even bring in that tool for repair...that's pushing it.

 

[Bob Marino]

Just my two cents (or .00001 euros) worth,

... Once I have tried the tool I may indeed look to the internet for my purchase, but only if the price difference is significant. ...If the price is large (more then several hundred dollars) then I will buy from a free shipping online dealer. But I buy all my supplies from my local Rockler. I only wish they carried more of the festool line. 

   Just look at that statement and I don't mean to single out this one person. The view is too often held. Here's the gist of it: "Demo it to me B&M store so that I can go home and order it on the internet" ? and we wonder why stores don't want to put more into inventory or have better sales/demo time and space.
   This philosophy has been eroding many marketing segments. The camera store is a biggie. In the 60's, you would have a hands on demo and then buy. Then the mass merchandisers entered the marketplace with cost plus 5% but no demo and we wondered why the neighborhood store only sells films, frames and greeting cards.
   I am lucky. My Woodcraft stocks Festool products, demos Festool products and sells enough to keep the brand active...but they figure they get half the sales. They can tell. When they demo but don't sell but a week or so later the person comes in for suppplies for the tools, they can figure it out. And people even bring in that tool for repair...that's pushing it.

John,

You raise a very point and  I don't disagree with it. However, the other side of the coin (and thee usually is another side) is that an "on-line" dealer can spend an awful lot of time on the phone with a customer, advising on which accessory is best for what tool, what's needed to do this, etc. only to have the customer go back to the b & m and buy it there.

Bob