Price Increases in Canada

Gbrooks91

Member
Joined
Dec 4, 2014
Messages
7
I was just on the Lee Valley website to have a look at the prices of the festool line.  The prices have officially got to the point where I think it is foolish to start to buy into this system, I will list a few of the prices with tax included.  it represents a good outfitted shop with mitre saw, vac, router, 2 sanders, domino,  jig saw and a work table - total cost today is $10,108.  I purchased a domino XL a year ago and was thinking of buying into the MFT and track saw system possibly with the OF1400.  with the prices the way they are, I'm going with the dewalt system.  These prices are insane!!!!  if before the price increase people stopped buying this stuff, it would make them rethink their pricing strategy.  Like come on the kapex is $1412 more than the 12" bosch glider, the OF1400 is $400 more than its competitors.  and the MFT... a folding table with an MDF top almost $1000, very useful tool but not for that kind of money.... festool makes great tools, but not that great.

Kapex $2088
OF 1400 - $797
Domino XL - $1976
CT 36 - $1006
Boom Arm - $484
Rotex 150 - $842
TS 55 - $917,
ETS 150 - $514
MFT - $961
Carvex 420 - $523
 
Yeah -- I personally feel like I'm officially priced out of the market now. There's a few accessories that I will probably still pickup, but no new tools. If the price goes up due to a low CAD, does that mean prices go down when CAD picks up again?
 
broseiden said:
If the price goes up due to a low CAD, does that mean prices go down when CAD picks up again?

Don't count on it. If they do, kudos to them but once people will get used to that price, I doubt they will lower the price.
 
Festool is a EU company, the Currency comparison in question is CAD to EU and in the past 12 months that has strengthened by almost 8% so the products should have gone down in price based on exchange.  For those that wish to compare CAD to US yes the exchange degraded for CAD and it costs about 11% more in CAD to buy US dollar purchases so Festool US needs to sell their product for an additional 11% more in Canada than they do in the US. BUT here is the rub, the US dollar strengthened against to EU so the US dollar prices of the tools should have dropped by almost 18%. All this means is that a $500 USD tool a year ago should have cost $555 CAD and today should have dropped to $411USD and cost $515 CAD. Instead it stayed the same in the US at $500 USD and went up approx. 10% in Canada to $611 CAD. This math is based on one year ago vs today exchanges of EU to US 1.36 to 1.12, CDN to US 0.9 to 0.8 and CDN to EU 0.66 to 0.71.

As those in the EU know full well, Festool is not obligated to sell their products at a currency neutral price around the world, they sell them for what they think the various markets will bear. So please don't believe the price increase in Canada has anything to do with currency other than marketing believes it is an easy margin increase because people will believe it is supposed to go up because of "currency".  We ALL price our goods and services for what we think the market will pay, it's up to us, "the market" to send the message that this latest opportunistic move is not something we are willing to bear. Like other posters I don't see myself adding to the substantial investment in Festool that I already own, I will by consumables and replacement parts but that's it, and I will be buying them from one of the retailers that did not force Festool to decide "do we lower the wholesale price in US dollars or allow the retailers to raise the price in Canadian dollars?" because we all know how that worked for us consumers here in Canada!
 
I agree with others, due to the price increases there are now many FESTOOL items I cannot justify buying and the rest will have to offer compelling advantages over the competition. All the talk about currencies is something most people don't think about when comparing tool prices, if you live and work in Canada $500 is $500 not $565.

I have most of festool's line and I enjoy using them but if I were starting out today at today's prices I would go with the competition on some items.
 
Yup good points about the market and the pitfalls of not having independent distribution here in Canada. Festool is not the only company to do this.
 
itchy said:
I agree with others, due to the price increases there are now many FESTOOL items I cannot justify buying and the rest will have to offer compelling advantages over the competition. All the talk about currencies is something most people don't think about when comparing tool prices, if you live and work in Canada $500 is $500 not $565.

I have most of festool's line and I enjoy using them but if I were starting out today at today's prices I would go with the competition on some items.

I'm in agreement here. My tool purchases profile intermingles other mainstream Brand names because while they do essentially the same job/outcome for most of the tasks they are employed for. Maybe they don't necessarily have the the same dust control they are more than suitable for the task at hand.

In a perfect world I'd have all Festools tools where it made sense to do so. But the reality is that I can't justify the expense at the price point vs. the ROI modelling.

A case in point is the Kapex, I'd love to have one to lug to job sites for trim moulding in condos, and the DC, but I have a huge 12" Hitachi scms that weighs a ton but is perfect for large crown jobs as it has a digital readout that allows angles down to .3 of a degree (very accurate and I cut crown on the flat using an app to set the compound mitre). But, it is a major pita to lug around. So, unless I'm doing crown I use a super accurate Swedish made manual mitre saw I bought at LV to cut base and casings which creates zero airborne dust in a small condo on the 18th floor.
http://www.leevalley.com/en/wood/page.aspx?p=32926&cat=1,42884,43836

For 20-50 LF of casing or base from a water damage claim it doesn't make sense to drag the big saw around.

That said, with the all the costs to run the business such as CPP, WCB, Insurance, promotion, taxes, etc.... And still make decent margin it is easy for some to say that every expensive tool will pay for itself, yadda, yadda. But at the cost for the Kapex, just to offset the tool cost with the stand and mitre extensions ($2,000+) one would have to do an extra $40,000 job at a 37% margin just to offset the additional incremental cost of the saw which doesn't make sense for me at this juncture.

I too doubt that prices will go down if the CAD rises in value against the USD, the parallel would be the price of fuel that has gone down here in Alberta to $.80/L because of low oil prices. The oil prices continue to drop, but now the fuel prices are rising substantially and now they are blaming supply and demand issues because of strikes and refinery issues in the US.

The only way prices will "adjust" for Festool tools is if sales overall in the US decline because of S&D and then and only then if Festool's market share in the US is large enough they may reduce pricing if margin can still be achieved. Canada is such a small marketplace for Festool so in the grand scheme of things we really don't have much influence on such things. We probably are less than 5-10% of what the US marketplace is to them.

The only thing that would help at this juncture is direct importation from Festool Germany to Canada to be set up which would be a win-win for Festool, Dealers and Festool purchasers, but it may not make business sense for Festool to do this.
 
Another analogy to Festool vs. the other tool guys is Tesla vs. Prius (plug in ) in the electric car arena.

I'm sure there are tons of Tesla owners who can and do justify that buying an electric car for 3 times the price of a Prius that gets you to your destination the same way that the Prius would but does it faster or cleaner per mile than the Prius makes sense.

Tesla sells x number of vehicles per year to "their" target market in the US and are not necessarily trying to target the Prius buyers 'cause they're not.
 
Yeah the only time I will be buying FESTOOL in the future is if I can justify the price difference. I don't really care if all my tool boxes match or not my concern is productivity and quality. Other manufacturers products are improving all the time and more are taking note of dust collection, modular storage and accessories. Where festool stood/stands out is offering tools no other manufacture does e.g the domino. They used to be the only tool company to offer a track saw but since the patent ran out there are alternatives. I have a TS 75 but if I were buying today I'd go with the makita SP6000 with 55" track at $399.99 CAD (on sale) over the TS 55 at $812.00 CAD.

The truth is the price is the price either you want it or you don't.
 
Woodn't It Be Neat said:
Festool is a EU company, the Currency comparison in question is CAD to EU and in the past 12 months that has strengthened by almost 8% so the products should have gone down in price based on exchange.  For those that wish to compare CAD to US yes the exchange degraded for CAD and it costs about 11% more in CAD to buy US dollar purchases so Festool US needs to sell their product for an additional 11% more in Canada than they do in the US. BUT here is the rub, the US dollar strengthened against to EU so the US dollar prices of the tools should have dropped by almost 18%. All this means is that a $500 USD tool a year ago should have cost $555 CAD and today should have dropped to $411USD and cost $515 CAD. Instead it stayed the same in the US at $500 USD and went up approx. 10% in Canada to $611 CAD. This math is based on one year ago vs today exchanges of EU to US 1.36 to 1.12, CDN to US 0.9 to 0.8 and CDN to EU 0.66 to 0.71.

As those in the EU know full well, Festool is not obligated to sell their products at a currency neutral price around the world, they sell them for what they think the various markets will bear. So please don't believe the price increase in Canada has anything to do with currency other than marketing believes it is an easy margin increase because people will believe it is supposed to go up because of "currency".  We ALL price our goods and services for what we think the market will pay, it's up to us, "the market" to send the message that this latest opportunistic move is not something we are willing to bear. Like other posters I don't see myself adding to the substantial investment in Festool that I already own, I will by consumables and replacement parts but that's it, and I will be buying them from one of the retailers that did not force Festool to decide "do we lower the wholesale price in US dollars or allow the retailers to raise the price in Canadian dollars?" because we all know how that worked for us consumers here in Canada!

I agree entirely with you first paragraph but not so much with your second one. I think that what made the difference was the decision from Lee Valley to drop Festool due to the reduced margin.
 
Francis - we actually agree on the second paragraph as well.  I didn't want to name dealers specifically but yes one did force the issue and the response from the Manufacturer wasn't "I have room now that the USD is so strong against the EUR to lower my wholesale cost to restore your margin" it was "let's raise the Canadian retail price, we can blame it on the dropping CAD vs the USD even though the CAD vs the EUR is strengthening". If that retailer was looking out for their Customers they would have said there was no way they would continue to support the brand if the retail prices were raised and that the only way they would keep the brand is if the wholesale price was lowered.  It also astounds me that few if any of our US friends have asked why haven't they seen a price drop now that the USD to EUR has strengthened almost 20%
 
Also to be clear, Manufacturers and Retailers are free and welcome to execute their businesses as they see fit, it does not have to be the way I or others see how it should be handled.

And like the Manufactures and Retailers , Customers are also free to do as they please with their purchases.

Kevin
 
I'm glad I have most of the tools already. Some of these prices are pretty nuts. I wonder how this will affect sale sin Canada.
 
Time to speak with our wallet.  Sure did want to get a DF 500 sometime
 
I'm going to guess this increase will affect sales, some items more than others. The items that will not be effected as much are those that have no competition like the Domino.
 
The thing is that the tools r second to none.
Never been impressed by a brand so thoroughly!
These tools unfortunately r worth the money.
R they really expensive? Yes. Are they good value yes.
Especially in the hands of seasoned pros.
These tools allow my team and I to truly express our capabilities.
Faster, cleaner, more organized, precise, crisp work.....
You know what they say.....you gotta spend money to make money!
 
I agree on the quality of the tools they are impressive and in some instances they offer features no other brand does. I do feel that the price increases over the last two year (20% total) is not proportionate to the Canadian market.
 
Woodn't It Be Neat said:
Francis - we actually agree on the second paragraph as well.  I didn't want to name dealers specifically but yes one did force the issue and the response from the Manufacturer wasn't "I have room now that the USD is so strong against the EUR to lower my wholesale cost to restore your margin" it was "let's raise the Canadian retail price, we can blame it on the dropping CAD vs the USD even though the CAD vs the EUR is strengthening". If that retailer was looking out for their Customers they would have said there was no way they would continue to support the brand if the retail prices were raised and that the only way they would keep the brand is if the wholesale price was lowered.  It also astounds me that few if any of our US friends have asked why haven't they seen a price drop now that the USD to EUR has strengthened almost 20%

Amen to that. Me neither I don't want to blame Lee Valley for that move. If the margin wasn't good enough, they have the right to drop de product. I just hate when they (Festool) blame canadian dollars for price increase but they don't drop it when USD is higher compared to EUD.
 
Unless TTS is willing to gamble in this currency climate, I bet the US price hikes aren't far behind...so we'll be right there with you in a few weeks.
 
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