New line of Festool products at Home Depot...

Perhaps this is not a relevant analogy (Festool iPhone) and (Home Depot Walmart).  It seems pretty good to me, and I was really pleased when Walmart started selling the iPhone a few weeks ago.  They only dropped the price by a measly $2, and it is hard to imagine customers learning more from Walmart salespeople than from any number of online resources.  Still, it puts a great product in front of an enormous shopping public, and this sounds good to me.
 
I was really pleased when Walmart started selling the iPhone
Click to expand...

There's another reason why Apple wanted the iPhone in Walmart, beyond the wider audience they can attract.  Because they make A LOT more margin on each phone sold at Walmart.  Here's the way it works.  Let's say you have a phone that you want to sell through all distribution channels.  Well, you want to "manage" the final retail price so that the consumer pays about the same at all retailers.  Otherwise, you will have a lot of problems (returns, mad retailers, etc...).  But each retailer has a different margin requirement (mark up) and different cost structures.  In general, their margin requirements are as follows:

Wholesale Clubs:  ~6% (they make most of their money from the membership fee)
Walmart: ~18%
Best Buy:  ~28%
Sears and other "selling floors": ~35%

If you want the end consumer price to be the same everywhere, then you must adjust what you charge each retailer (so that your price times their mark up results in the same final price everywhere).  Given this, where do you make the most money?  The Wholesale Clubs and Walmart of course.  Manufacturers LOVE Walmart because their mark up is so low.  This means that the manufacturer can keep a decent margin...and the consumer also gets a very low price.  This is one of the reasons Walmart has thrived.  Apple is making A LOT more money off the phones sold to Walmart than the ones they are selling at Best Buy.  And it's the same phone.

Festool could learn something from this dynamic (no, don't panic, I'm not now suggesting they sell to Walmart ::) )
 
Marrt,

The example may not be a good one. The Iphone is one product with a limited number of accessories. Festool's line is rather large (skews are over 1200). Festool is strongly encouraging dealers to stock a good number of those skews and know somethin' about them.

Bob
 
I wish my Woodcraft had more accesories, all though george does keep track of what he sells, who has it and what consumables and misc. parts they will need.

I have noticed that there seems to be more and more items for the tools I own, that makes me happy.

I cant wait for my sortainers to come in!!

 
  Festool is totally different in so far as your not buyin' a tool your buyin' an integrated system, and who at home depot is aware of that.Try findin' the 500 Platin at home depot. If it works don't fix it. The tools are a great investment for some of us; some of us not so much.Yeah, could I get the crappy rotex please.
                                                                                                                            Dan
                                                                                                               
 
You know he might have an idea here, but the idea of cheapening is a little off.  My primary trade is a tile setter, and I seem to be a junkie for a certain Luxembourg brand who's price point is also considered outrageous by those who don't make a living with them.  I am referring to Hilti, which is now being sold at . . . Home Depot.   Their quality hasn't gone down because they are being sold in a box.  Rather more tradesmen, who never would have gotten to know the value of the brand, have a good idea why they are so much more $$$$.  Put Festool in the rental section,  then guys can try them , then they will buy them and then they will be here asking questions and looking at the "how to" threads.

Craig
 
No one has even given Protool a mention, so I will. These are contractor grade tools that are less expensive than the Festool line with the same warranty, made by Protools, a Festool company. They are not interchangeable, but they don't really compete. Protool makes corded hammerdrills, regular corded circ saws, drill bits, concrete and plaster mixing machines, etc.

Now before you chime in with, "yeah but we can't get those here" remember that neither can you buy Festools at HD. I'm just saying it's more likely you'd see Protools there than Festool, just another way to drag this discussion totally out.
 
Eli said:
No one has even given Protool a mention, so I will. These are contractor grade tools that are less expensive than the Festool line with the same warranty, made by Protools, a Festool company. They are not interchangeable, but they don't really compete. Protool makes corded hammerdrills, regular corded circ saws, drill bits, concrete and plaster mixing machines, etc.

Now before you chime in with, "yeah but we can't get those here" remember that neither can you buy Festools at HD. I'm just saying it's more likely you'd see Protools there than Festool, just another way to drag this discussion totally out.
Click to expand...

Eli,

I think in time, you may be correct about Protools.

Bob
 
I'm not going to continue the discussion on why I think Festools are worth what I paid for them!  As someone pointed out, we could all write a book on that subject.

My 2 cents though....even if Festool started selling their products at Home Depot, it wouldn't last very long.  It may help them sell more units initially, just by building awareness of their brand.  In the long run Home Depot would stop carrying them, because they wouldn't sell enough volume to justify the "real estate" or shelf space that they took up.Big box stores work on volume!  Festool just won't sell the volume of tools that matches their expectations.  Its alot of inventory to carry for a long time, for low sales volume.

I agree with the comment, to paraphrase - "blame the consumer, not the Chinese for the lower quality of products".  The average consumer wants cheap goods.  This is what the big box store gives them. 

I don't want to over simplify the big box business model, but higher volume translates into lower price per unit. 

Furthermore, you rarely see the same quality level or product line at Home Depot that you get at a 'contractor-grade" distributor.  For example if you buy a box of 10 electrical outlets from Home Depot - they are not the same box of 10 that you buy at an electrical wholesaler.  Home Depot's are made in China.  The Wholesaler's are made in the USA or Canada. With all the counterfeit products coming out of Asia, I'll gladly continue to visit the wholesaler.

 
It is hard to get Hilti Through HD.  I would rather go 15 miles to a real lumber yard that has a giant wing just for the Hilti items.  That way if I have a problem those guys have no where to run and hide at.

I would be very interested in picking up a few things that Protool offers in thier line up.
 
Deke said:
Just my two cents as a home shop non pro, but I like the idea of going to Woodcraft once in a while for the "good stuff" while going to the big box stores every week for the run of the mill things. It's more of an outing and something to look forward to. Also, if there were a place like Woodcraft closer to my house I would be in bankruptcy by now! Of course I have purchased many many routers, saws, drills, sanders... from Lowes and Home Depot but not once did I ever find a sales person who knew more than I found from my own research. Not even close.
Click to expand...
Probably why it's called a "DO-IT-YOURSELF" store.
 
You know what I find disturbing is any of these salesman can go on the net and become very informed, but they do not. It happens with car salesman also. I can remember arguing with the salesman about what motor was in which package and of course my info was correct.

Even at 10.00 an hour wouldn't you just study up on the tools. A  few days on google would do it, but it seems they don't.

Same at Rockler. I know their stock better than many of their employees. With computers in so many homes you would think these salesman would be much more informed than they are.

 
First, do you think they make $10 an hour?  I doubt if they make much more than minimum wage at Lowes and HD.  We know a woman who worked at Lowes for over 20 years and she told me they don't even get any employee discount...zero.  I was shocked...  Heck when I worked in a Hobby Shop in high school the owner would let us have anything he could get at his cost plus shipping which usually gave us about 35% off retail.  My cousin had an Ace Hardware store and he gave his employees what they needed at cost too.  Heck I am not even sure the guys at woodcraft make more than minimum wage and if they do I bet it is not a ton more...

I agree that I probably know more than most of the people I deal with at these places...like I said I am still looking for that master plumber or electrician at Lowes.  I have not run into him yet...  You would think people would want to know more and care more but in many cases they feel they know as much or more than the customer and if the customer knows more they just let you go on your own.  People just don't care to expand their knowledge unless it will lead to them being more valued and paid more.  And in most work situations today there is no loyalty between company and employees like there was 20 or 30 years ago.  And I think in the end that hurts us all.

Best,
Todd
 
Yeah they do it's regional at HD they get about 10.00 an hour to start. I guess they may hire a few for less but my sons girl friend works at HD part time and gets 10 something an hour.
 
Interesting and a bit surprising....  A few years ago a friend of mine who is an engineer went to Lowes and wanted to work part time as a kitchen designer to make a little extra money and because he enjoys doing it.  In talking with the manager he found out that he made more than the store manager as a designer/engineer.  I don't think they were even willing to offer him $10 an hour to work there so he jut started designing houses on his own and doing drawings for local builders as he is an expert auto-cad user.

Best,
Todd
 
Well like I said it is regional at HD and she did have college, but the minimum wage in IL is already 8.00 an hour and going up again in 2010 to 8.25 and I suspect it will not be to long and we will be at 10.00 an hour. It's also time and a half after 40 hours.

Oops the wife said the min is 7.75 until July 1st here in IL.

Check this out. The minimum wage in KS is 2.65, that has to be impossible ! But it says so here:

http://www.dol.gov/esa/minwage/america.htm#Illinois

That has to be wrong I thought the federal min was 6.55, I guess the states do not have to follow that.

I verified on 3 sites the KS minimum wage is 2.65, that is an outrage.
 
Notorious T.O.D. said:
....
I agree that I probably know more than most of the people I deal with at these places...like I said I am still looking for that master plumber or electrician at Lowes.  I have not run into him yet...  You would think people would want to know more and care more but in many cases they feel they know as much or more than the customer and if the customer knows more they just let you go on your own.  People just don't care to expand their knowledge unless it will lead to them being more valued and paid more.  And in most work situations today there is no loyalty between company and employees like there was 20 or 30 years ago.  And I think in the end that hurts us all.

Best,
Todd
Click to expand...

The best I hope for at HD and Lowe's is an employee who can tell me or show me where an product is located.  A few years ago I was looking for supplies and information so I could rewire the cable within my house to work with 1080p HD TV, after realizing that the pro electricians I had used for other work did not know what they were doing re cable, and testing of my old cable by Warner Cable indicated it was marginal in signal quality.  The employees at HD were able to direct me to the shelf location where the cable, fittings and tools were located, but could not answer any of my questions, e.g. which type of cable I should buy to ensure compatibility.  Although I had done some reading on the subject and knew generally what I wanted, there were still many choices to make and I was not sure.  While I was studying all the information on various product labels, along came a ~35 year old man with his lady friend to whom he explained what she needed for her TV cable system.  He answered all my questions and pointed out the pros and cons of various products and tools and why he preferred certain products and tools.  Armed with the information he provided I bought products that have worked well.  My wife and I did the complete installation, excepting the line from my house to the Warner Cable junction box on the utility pole.

Dave R.
 
nickao said:
Well like I said it is regional at HD and she did have college, but the minimum wage in IL is already 8.00 an hour and going up again in 2010 to 8.25 and I suspect it will not be to long and we will be at 10.00 an hour. It's also time and a half after 40 hours.

Oops the wife said the min is 7.75 until July 1st here in IL.

Check this out. The minimum wage in KS is 2.65, that has to be impossible ! But it says so here:

http://www.dol.gov/esa/minwage/america.htm#Illinois

That has to be wrong I thought the federal min was 6.55, I guess the states do not have to follow that.

I verified on 3 sites the KS minimum wage is 2.65, that is an outrage.
Click to expand...
Nick,

According to the FLSA:

The federal minimum wage is $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009. Many states also have minimum wage laws. In cases where an employee is subject to both state and federal minimum wage laws, the employee is entitled to the higher minimum wage.

Tipped employees are individuals engaged in occupations in which they customarily and regularly receive more than $30 a month in tips. The employer may consider tips as part of wages, but the employer must pay at least $2.13 an hour in direct wages.
 
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