No more Festool on Ebay.com or live.com

[Julian Tracy]

Did your friend deal with someone that had a lot of positive feedback?  On a purchase that large, I'd want to talk with the seller first.

Too many Ebay amateurs out there that buy from (obviously) suspect sellers at prices too good to be true and then all of a sudden Ebay is "risky".

Besides, there's not a $4k fourwheeler out there that would be worth paying shipping costs on, so I'd not buy something that large and $$ unless I could go get it, or have numerous conversations with the seller.

Yea, there's issues with Ebay, but it's not the dangerous back alley marketplace some would make it out to be.  A bit of common sense goes a long way to keeping your troubles/losses at a minimum.

Julian

 

[ejfud]

Wow, Festool just keeps giving me reasons to stop buying their products.

I really don't see how a program such as the Live cash-back deal hurts them in any way. They would sell more tools, but I guess that's not what they want.

 

[Per Swenson]

Folks,

They are protecting their dealers.
Per

 

[sainttjames]

MisterSofty's Cashback experiment is just that...they are attempting to redefine the search model and wrest marketshare from Google.

Whereas Google gets money everytime you search for something and click on the advertised links...MS is attempting to turn that model on its head by paying you for clicking on the link...MS wins and the consumer wins...

The internet has been a disruptive technology since its adoption by the public...the larger players are merely looking for leverage and the best way to harness that new paradigm.

Clearly no one can tell Festool how to sell their product, BUT Utterguys (and some others) have been doing business this way for a while - selling through ebay.com was merely their channel prior to MS's Cashback...(and whatever your 'concerns'/fears about buying from ebay.com....well...welcome to the internet...have a seat...stay a while you might find it interesting...or not  )

That Festool would basically tell those that were selling through this channel that it is no longer longer allowed to do so, may not be completely "equitable".

If one has relied on this business model for some time, with Festools knowledge, Festool could be "estopped" from preventing distributors from using this business model if they have relied on it "to their detriment" (a related defense is "laches").  I don't know the exact context here but these are certainly some of the issues involved...

 

[RDMuller]

I spent 30 years in the marketing department of a huge company which makes products that are technically very sophisticated, -- much more so then Festool's  (agricultural sector of the economy).  If the product furnishes value to the end-user, it is in everyone's best long-term interest (including the consumers) that margins are maintained in the distribution chain, or support for the product will completely evaporate.  Dealers will no longer provide shelf space, technical knowledge or technical service on the product.  The manufacturer will cease to invest in developing and enhancing the technology.  Good long-term marketing is not just having a discount that is greater than the next guy down the road.  Next thing you know, the product is being made is some third world country and quality falls apart.  Good marketing is bringing the total package that your customer needs -- value, knowledge, product availability, product improvement, etc.  The Ebay --- Amazon --- etc approach is awful for support ---- the whole thing is price and usually relatively quick shipping.  Granted these things are important, but they aren't everything that makes for good marketing.  Festool has done the right thing here to level the playing field.

By the way -- folks buying over the internet and not paying sales tax.  Who do you think pays for the roads you drive on, the schools your kids go to, the police that assure your safety, etc.  Our state recently had a 1% increase in sales tax to give some property tax relief.  One caller on a radio show proclaimed this was great since he bought and registered his cars in a neighboring state and bought most of his major consumer goods over the internet.  Some people want to have sales taxes completely replace income taxes.  No one likes paying taxes, but the shear reality is that these services provided by government agencies must be paid for.  To keep the playing field level, I would be in favor of taxing all internet purchases.  This should certainly be easy enough to do since all of this merchandise is being paid for with debit and credit cards and shipped by only a relatively few carriers.

 

[Julian Tracy]

Folks,

They are protecting their dealers.
Per

BS - Every one of their dealers could post Festool items on Ebay with buyitnow pricing.  Most Festool B&M dealers are useless in my area except maybe a few.  When's the last time you walked into a Woodcraft store that had employees with more knowledge about Festool products than yourself?

Maybe it's just the store I'm close to, but usually you ask a question and they stick their head in a catalog to find out the answer.  I could do that.

The ONLY reason I've bought from in town dealers is due to need it now jobs, etc.  In those cases, the "price fixing" policy is handy as I know I'm only getting taken for sales tax.  (Yea, yea, I know - my duty to the state, etc...)

Where do they stop?  "We no longer sell to holder of Chase credit cards because of the 2% cash back..."

This goes above and way beyond "protecting their dealers".

Of course, I only care cause I was about to buy the 700 trimmer kit last night, LOL!  Else I'd be the rest of you - shut up and take it like a man, it's the cost of buy this fancy green stuff.

Julian

JT

 

[Dan Baker]

Folks,

They are protecting their dealers.
Per

As a dealer and user of Festool I appreciate Festool's Support.  Thanks RD Muller for explaining the results when tools are sold only on price.  It is more expensive for a specialty woodworking store to pay for knowledgeable staff and to provide the time and space for demonstrations.  It is very frustrating to spend hours with a customer showing and demonstrating  a product and explaining the benefits only to have them return weeks later to proudly claim they saved $10 bucks on amazon.

Festool has chosen to try to prevent the decline in knowledge, service and support for their product with their pricing strategy.

 

[Per Swenson]

Julian my man,

Calling my statement BS, you know they are protecting the dealers...BS.

Well maybe you didn't think that through all the way.

I am not a Festool employee or a dealer, but once and awhile I have this ability

to place my feet in another's shoes.

Yours also.

Right this very moment at 10 to 6 in the morning, I had to check my Visa balance to make sure there

was a least 20 bucks left for cigarette's and coffee.

So I can empathize about saving 250 flippin dollars on anything.

Festool is not discounted to provide a level playing field for their distributors.

So when Bill the child of Satan Gates digs in to his own pocket

to bribe you to use his search, he in inadvertently upsets the apple cart,

sending it down the slippery slope.

I assume you are a professional contractor due to your statement about

needing the tools for jobs, so you really shouldn't have to shut up and take it like a man.

No. You examine your business model and incorporate the price of tools into the cost of doing

business, pass that on to the consumer and let them do the whining for you.

Saves money on blood pressure medication.

Off to get nicotine and caffeine, have a nice day.

Per

 

[Bob Marino]

I am not sure if Festool will offer an "official" reason here on the FOG, but it's what Per, RD and Dan B have already stated - much better than I could have, BTW.

Bob

 

[Julian Tracy]

Per,

Hopefully I didn't offend with the BS comment - Your posts and your work have shown you to be a master craftsman worthy of anyone's respect.

I'll probably still buy the 700 setup, but it's just a bit harder to justify when I already have 2-3 laminate trimmers capable of doing the work, albeit not nearly as smoothly as using the new Festool setup.

But I still think that a hands off approach in this situation would have been more appropriate.

Suprised Festool hasn't been acting as the tax police for their online dealers so as to "protect their dealers".  Similar difference.

I buy a Kapex online, I save $78.  Maybe they should force online dealers to charge a shipping rate equivalent to the highest state tax rate?

Have a good day.

Julian

 

[Matthew Schenker]

Good Morning,
The more this goes on, the more it seems to me we should hear from Festool.  I know for a fact that Festool employees have spent a good deal of time reading this and other challenging discussions in recent days, but have not left a response.  (By the way, as most of you know, you can easily see a list of who's reading a discussion.)

The more this goes on, the more speculation will arise.  For example, in one way or another, some people have wondered out loud if this is an isolated decision, or does it represent the beginning of other control measures that Festool will take?  That's a legitimate question.

If the only "answers" we get are from people who are not employees of Festool, or dealers, no matter how sincere and thoughtful they are, we can't be sure we know what's going on and we run the risk of more speculation.  That's bad for everyone.

In other words, we need someone from Festool to explain why they did this, and whether it is part of a pattern or a set of new directions.

Answers from the top are good for everyone!

By the way, this discussion is also a good test of the independence of this forum.  We're here to challenge, not follow.

Stay in touch,
Matthew

 

[utterguys]

Some of the people suggest that Festool dealers items on eBay are being discounted, they are not, they are being sold at the same price everyone else is selling for not only that we pay a listing and selling fee so we make less than others that sell on-line or out of a catalog. So we are all on the same playing field, we all get the same discount (providing you qualified when you got setup). We can not help that search engines are giving a discount, also I do not subscribe to any of those search engines, they are linked to eBay.com and live.com.

Many other dealers and myself rely on other avenues to sell products, wether it be on the internet, magazines or local advertising. We all accept credit cards over the phone and in person and the card holder possibly gets cash back from there credit card company for using there brand card. If this is going to be the way we are limiting where the customer wants to buy from than the world is in trouble. The economy is already bad enough.

I enjoy selling and using Festool and do not mind taking the time to sell the customer the right tool for the job even if it takes more time than the last customer. The customer will alway remember that and respect that in the dealer.

I just want to let people in the FOG that I did not start this topic to cause a problem just want to make aware that this taking from my and other dealers livelyhood and if this is being controlled now what will the future hold.

I totally respect Festool and all there dealers as they have made Festool the best product line on the market today hands down and they will continue to come up with better quality products than any other company on the planet for portable power tools.

Thank you, Andrew

 

[Bob Marino]

Suprised Festool hasn't been acting as the tax police for their online dealers so as to "protect their dealers".  Similar difference.

I buy a Kapex online, I save $78.  Maybe they should force online dealers to charge a shipping rate equivalent to the highest state tax rate?

Have a good day.

Julian

[/quote]

Julian,

Interesting points and I would like to chime in again here. Originaly Festool was overwhemingly "on-line"  -  dealers did not stock tools. Orders were called in and drop shipped to the customer (except for some dealers stocking accessories). Sales tax was charged, collected and remitted to every state that Festool had a "sales prescence" in - virtually all 50 states.

Then dealers were allowed to stock tools - they were referrred to as dealers and those of us not stocking the tools remained ISA's.
Some/most ISA's quickly became dealers, and since they did not have a "sales prescence" in states other than their own (mostly the case) they could offer  "no sales tax collected" to customers outside their state. ISA's (those having Festool drop ship for them) were "at a loss", because online dealers did not charge/collect sales tax and the ISA's (because Festool was shipping the items) had to. Sales were affected, so most ISA's chose to become stocking dealers (there is more to that story). Sales tax is not someting Festool or dealers have control over. Dealers do have lee-way regarding shipping charges - some charge nothing, some only below a certain price, etc.
Right now, as I am (temporarily anyooo) setting up a brick and mortar, I know there are advatages and disadvatages. I  may get NJ/NY customers who want to buy right then and there and are willing to pay the sales tax and many NJ customers will not buy from me (either as a walk in or online) because of the sales tax. As regarding the Kapex, I would bet most dealers would love to sell all of them in store rather than paying $50 - $75.00 to UPS/Fed-Ex  for shipping.

Bob

 

[utterguys]

Bob,

you have made great points and I respect and take count of everything you post on FOG as sometimes I get jealous of how much you a respected and know in the Festool community, but I would like to say that maybe Festool should have a different policy for dealers that sell on-line, maybe they need to be a stocking dealer like you and I. I stock every tool and a good portion of the accessories (due to space), but I do very little drop shipping maybe 3-4 a year. This should be something that Festool needs to look into for internet dealers. I am not sure if the dealers that sell on eBay.com and live.com are stocking dealers or not but I only list what I normally stock and sometimes sell out of a product before the auction end due to my walk in business.

Bob, please feel free to contact me at anytime and we can discuss more about this.

Thank you, Andrew

 

[Michael Kellough]

I spent 30 years in the marketing department of a huge company which makes products that are technically very sophisticated, -- much more so then Festool's  (agricultural sector of the economy).  If the product furnishes value to the end-user, it is in everyone's best long-term interest (including the consumers) that margins are maintained in the distribution chain, or support for the product will completely evaporate.  Dealers will no longer provide shelf space, technical knowledge or technical service on the product.  The manufacturer will cease to invest in developing and enhancing the technology.  Good long-term marketing is not just having a discount that is greater than the next guy down the road.  Next thing you know, the product is being made is some third world country and quality falls apart.  Good marketing is bringing the total package that your customer needs -- value, knowledge, product availability, product improvement, etc.  The Ebay --- Amazon --- etc approach is awful for support ---- the whole thing is price and usually relatively quick shipping.  Granted these things are important, but they aren't everything that makes for good marketing.  Festool has done the right thing here to level the playing field.

By the way -- folks buying over the internet and not paying sales tax.  Who do you think pays for the roads you drive on, the schools your kids go to, the police that assure your safety, etc.  Our state recently had a 1% increase in sales tax to give some property tax relief.   One caller on a radio show proclaimed this was great since he bought and registered his cars in a neighboring state and bought most of his major consumer goods over the internet.  Some people want to have sales taxes completely replace income taxes.  No one likes paying taxes, but the shear reality is that these services provided by government agencies must be paid for.  To keep the playing field level, I would be in favor of taxing all internet purchases.  This should certainly be easy enough to do since all of this merchandise is being paid for with debit and credit cards and shipped by only a relatively few carriers.

For the same reason you state, I favor the complete elimination of sales tax.
All states should have a progressive sales income tax.
Our economy is driven by commerce, why tax that?

 

[Bob Marino]

Bob,

you have made great points and I respect and take count of everything you post on FOG as sometimes I get jealous of how much you a respected and know in the Festool community, but I would like to say that maybe Festool should have a different policy for dealers that sell on-line, maybe they need to be a stocking dealer like you and I. I stock every tool and a good portion of the accessories (due to space), but I do very little drop shipping maybe 3-4 a year. This should be something that Festool needs to look into for internet dealers. I am not sure if the dealers that sell on eBay.com and live.com are stocking dealers or not but I only list what I normally stock and sometimes sell out of a product before the auction end due to my walk in business.

Bob, please feel free to contact me at anytime and we can discuss more about this.

Thank you, Andrew

Andrew,

Thanks for the kind words, but as you and I both know, the commissions/bonuses and incentives given to stocking dealers are different than for those that have Festool drop ship. This is to adjust te playing field and encourage all delaers to stock and ship themselves.

By all means, lets talk!

Bob

 

[Michael Kellough]

Right now, as I am (temporarily anyooo) setting up a brick and mortar, I know there are advatages and disadvatages. I  may get NJ/NY customers who want to buy right then and there and are willing to pay the sales tax and many NJ customers will not buy from me (either as a walk in or online) because of the sales tax. As regarding the Kapex, I would bet most dealers would love to sell all of them in store rather than paying $50 - $75.00 to UPS/Fed-Ex  for shipping.

Bob

Don't worry, you get the NY customers, and a good portion of the other states too I bet 

 

[Matthew Schenker]

Good Morning,
As we wait for Festool's response, let me point out that tax issues have already been raised in another discussion, which you can find by clicking here.

Let's keep this discussion focused on the decisions Festool is making about retail venues.  If you want to post about sales tax, please use the other discussion.

Thanks,
Matthew

 

[pmkierst]

Some customers need the full services of a good dealer. The pro, who wants extremely quick service, loaners, repairs and support is one of those. He isn't going to buy from some random dealer on the net, regardless of the price, because being out a tool costs him a lot more then he'll ever save. He'll almost always good looking for a trustworthy dealer and stick with him.

The amateur guy in his basement now, he mightn't need all that.  Yet he has to pay the same, deal the same? Why? What value does the dealer add to him? Sure, sometimes, but the idea that all sales must be uniform is very old school, well before internet days, let alone the modern age.

Again, if the dealers are adding so much value, they will earn their business and don't need overly strong protections (there is a middle ground, I am sure). There is no particular reason why they should be 100% protected; that just propagates bad dealers and hurts the product. Hell, customers can see the uniformity of pricing and offering and will probably assume that the margins are being kept artificially high and they are being ripped off.

I'm not suggesting all out price war; that probably wouldn't serve anyone. But excess protection of dealers doesn't either.

Beyond all that, banning a channel because a third party has temporarily offered a rebate is ludicrous. How long does Festool think MS can pay those kinds of rebates? Anything more then $40 or so to gain a customer is way out of line, and their target is probably more like $5 (depending on their estimated retention).

 

[Daviddubya]

Matthew - While I will find Festool's response to this discussion interesting, I doubt the Festool response will quiet the controversy.  It seems lately that no matter what reason is given for an action by the company, there are those that will object, apparently because that reason does not align with the individual's thinking as to how it should be or how they would like it to be.  In reading this thread I am left with the impression that we already have the answers to the questions of why Festool made the move they made.  Unfortunately, we do not have acceptance of those answers.  Let the debate continue!  Don't you just love Internet forums?