Axminster Price Hike

[head clansman]

hi all


track821ok

I believe your fury over paying £12 more on a £120 order is better directed at the imbecile bankers who put the UK into this mess.

uuuumm, where that come from ????? hc

 

[matt]

do you really believe they do not understand the market and don't want to maximise sales in this current economical climate?

Therein lies the rub... It's not really about maximising sales. It's maximising profit. Profit can come at the expense of sales volume (kinda what we're seeing here). The degree by which you suffer that effect is representative of how you go about maximising/protecting your profit.

At a time when most everyone else is *seen* to be reducing prices, Axminster have rather too boldly increased theirs.

Bottom line... Axminster can be reasonably confident that any dip in sales volume will recover (at least in line with prevailing spending and competition). It's a gamble but when you have to forecast for the catalogue season there is little choice.

As mentioned earlier... I still believe they did themselves a disservice by discounting products directly before increasing the prices. That particular situation could have been handled far far smarter.

Price increases equal grumbling. All you can do in retail is manage the pain to avoid losing too much goodwill.

 

[Jake]

Like someone else said, I've always been a bit bemused at their perceived status in the first place. I use them quite a bit, but use others just as much. They are alright, but so are many others. They aren't generally price competitive, and it doesn't sound like that is improving for the moment. Their service is good, but not so astounding that I feel any great loyalty to them.

As an importer of loads of Chinese stuff, they are obviously caught by the fact that the ren is pegged to the dollar, and the dollar/sterling rate has been battered away from its recent vastly overpriced levels. That kind of currency shift is never going to be comfortable for an importation business.

Think of it as self-enforcing protectionism (jobs for Brits) and make yourself feel better as you save (for ages) for that Sedgwick.

 

[ivan]

It seemed to me that Ax prices began to creep up when they got themselves a marketing manager. He seems to have introduced a regime of somewhat higher prices over the past few catalogues, with occasional special offer reductions in the Lidl style bargains flyer they began to mail out soon after he arrived. This all long before £ fell against $ raising both US and Chiwanese prices.

 

[ike]

It seemed to me that Ax prices began to creep up when they got themselves a marketing manager. He seems to have introduced a regime of somewhat higher prices over the past few catalogues, with occasional special offer reductions in the Lidl style bargains flyer they began to mail out soon after he arrived. This all long before £ fell against $ raising both US and Chiwanese prices.

Don't forget there's been terrific inflation in ex-works prices from China over the last year or two, regardless of the exchange rate. The Chinese want a better lifestyle too - and we have to pay for them to get it!

 

[trousers]

Yebbut the global economic crises has meant Chinese employees being laid off in their droves as well. West doesn't buy, China doesn't make (as much), Chinese labour gets laid off and goes back to paddy fields. So their improvement in lifestyle was short lived really.

 

[p111dom]

Crikey :shock: The new calalogue has just turned up for me and me thinks they are taking the p!ss. The Jet JTS-250 which was on long term "special offer" at £999 is now £1539.51????? And the Jet bobbin sander which went from £279.00 to £305 back down to £275 now up to £328.50. To add insult to injury, written all over the web is 'Added value, now comes with 5 bobbins free'.......it always did. Only the 75mm bigger bobbin was an extra which still is the case.

Something seems very fishy here. Are they ramping up the prices make impending special offers seem better? The Veritas planes are down in price some significantly so like the bevel up smoother down by about £50. At first I though it may be because the pound may be doing better against the Canadian dollar but some Veritas item have also gone up in price. How confussing.

Makes the Festool Domino price rise of about £40 seem reasonable.

 

[p111dom]

(homer) Doh! can believe I just said that. Festool and reasonable price rise in the same sentence. :roll: ](*,)

 

[matt]

Just spotted a bargain... Assistant for £19.95

 

[Jon the Bodger]

Noticed that earlier, Verits scrub plane down £40 to £90...

The Veritas web price changes do look odd. Although the Low Angle Jack dropped £233.86 to £220.95, the Bevel-Up Jointer dropped from £259.58 to £209.99 to be even cheaper than the Low Angle Jack. Bears no relationship to price differentials on the Lee Valley site. Perhaps Axminster are clearing stock.

 

[roombacurious]

Axminster are certainly not the only ones with such big price rises - has anyone seen the new Machinemart catalogue? They always were ridiculously expensive on most items, now... they're just even more!

The whole problem is that yes, the sterling has been devalued and therefore prices of imported goods will go up but... a smart retailer will try to absorb some of that increase by reducing their profit margin. If they're unable to survive a modest cut in profits in all likelihood they won't survive the bigger losses the inevitable drop in sales will bring.

I've always shopped around but during these difficult times there's even more reason to support retailers that make the effort to keep their prices down.

 

[p111dom]

I don't buy the exchange rate being the real reason for the increases though. Take China where most of these machines are built. commodity prices have been falling too. Steel has gone down by more than 20%. Some other commodities have fallen even further which in theory should in turn reduce the cost of production by about 20%. There's lots of scrap metal merchants in the UK shipping scrap to China who will be getting a raw deal exporting to markets with currencies doing better than ours. That will make the price of steel comparatively cheaper for foreign markets again. Anyway the point is that Sterling has lost some 20% of it's value against other currencies but with raw material and therefore manufacturing prices down by the same amount, surely that should balance the price out not increase it by 50%. The price of oil is at a record low so increased costs in shipping sound like a red herring too. Some of the pervious arguments would seem more legitimate if the price increases weren't so add hock. Some down by 10%, some up by 10%, 20% all the way up to 50%, many of them from the same country of origin.

 

[nimmaj]

Maybe that's the point, though - absolutely everything is so volatile at the moment that it's really hard to predict what your actual costs are going to be which makes it really hard to name a price that is valid for 6 months.

To hedge, you could lock in (perhaps terrible) prices for foreign exchange and commodities with forward contracts - or maybe buy some future contracts. If you don't do something like this then you must put prices up and then offer discounts if you can.

I can't imagine axminster is mucking about with derivatives, so isn't the last option their only option? Unless someone up the supply chain is doing some sensible hedging. But if that were the case we'd presumably expect clico/clifton to be playing with commodities derivatives and foreign exchange derivatives. Are they really doing that?!

It's not like things are swinging around by tiny amounts, either. I suspect there's also a lag time to consider. Either in terms of inventory or forward contracts coming through. This could perhaps explain some of the prices going down within the veritas range e.g.?

Not trying to have a pop. I just think this situation is really very complicated and noone's got any idea what's going to happen next!

Have fun...

Ben

 

[Trumpet]

p111dom

Many Chinese companies made little or no money, ranges of items that share a common brand name may be sourced from multiple suppliers - even the same machine (if there was significant demand) may have been built by different suppliers. Show city (can;t remember the name has lost 120,00 jobs, millions have returned to the farms. China has had inflation and their rising costs have had to be factored in, largely offsetting falls in commodity prices and the cheapest suppliers simply can;t make product profitably regardless. Also reducing volume means that prices need to be higher to offset fixed costs.

Now sterling, it hasn't gone down a bit, it has collapsed, far worse than the ERM fiasco. It is surprising that prices haven;t risen by a lot more, maybe they will and this is just a lull before the full compliment of items are re-stocked at new prices.

 

[Trumpet]

Forgot to post a chart - this is what has happened to sterling purchasing power overall.
http://www.tutor2u.net/blog/files/sterl ... rticle.gif

 

[matt]

I didn't go ahead with my order in the end. I did make contact with customer service to see if they wanted to make a concession given the circumstances (I was building a basket to qualify for free delivery. They were out of stock of a product, meanwhile all the prices went up (+35% in the case of my order)).

I think they've been remarkably daft in marketing discounts on a lot of products which ended at the same time as all their prices went up. Take, for example, the Bessey UniKlamp (60cm). Offer price £12.28. New price £17.75.

As others have mentioned, I buy on price. Axminster used to be my start point as they tended to offer good value and service. Sometimes I would not bother shopping around. Not anymore - the landscape has changed...

And... as I secretly expected... Placed an order this week... :roll:

 

[stef]

well,
I think it's pretty normal.
(erm..)
I have been buying a few tools online from axmstr. they were about 50% cheaper than mainland europe, due to the pants falling of the pound.
I bought a makita sander, £166 or 170 euros. cost in France, 340euros min.
i also just bought a makita circular saw, paid £120, or 125euros. price in france ? over 220euros...
now, how they can still survive, i wonder..
either that, or the french retailers are reallly taking the mick !
even with the postage (which has gone up from 15 to 23pounds to France, but maybe due to heavier parcels or new transporter.), prices are well, well bellow par.

 

[Schummie]

And in the US the tools are mutts cheaper, and in Japan and in . . . . .
Yes, in Europe cost some tools more, that is already years so, butt is that a
reason to raise the prices in the UK?
They buy some tools in the US, they transport them to the UK, what is
different . . . the pound. They can buy less in the US because off the pound.
You can try to say that it is normal, but it isn't normal, what did the prices
when the pound was good and the dollar bad . . . . the prices where the same.

 

[Mooeee]

Looking at all the messages regarding the price hike by Axminster. It seems to me that we are our own worst enemy, we want the cheapest prices, and by achieving this makes Axminster bigger (More buying Power) by getting the increased sales only to drive the smaller companies out of business, END result only being able to buy from one company or sole importer of tools (Lie-Nielsen) and then they can charge what they like.

I do appreciate that the exchange rate and cost of raw materials has a big bearing on current prices but raw material demand has dropped off this past six-eight months and prices of steel/Iron and Copper have halved (checking the scrap prices will confirm this).

As for the car industry I do not have an ounce of sympathy for them, for years they have commanded high car prices and given nothing when part exchanging and are now crying to the goverment to help bail them out discounts are in abundance for new cars, don't tell me they can slash £7,500 of land rovers, £12,000 of VW Touaregs and are running at a loss It just don't work in business, they are still making money even after these discounts, I know for a fact that Honda in swindon can make and build a Civic for £5,000 and these are the models that the dealers sell for £20,000.

Enough said only to repeat We are our own worst enemy when it comes to wanting something cheap.

Mooeee

 

[studders]

Enough said only to repeat We are our own worst enemy when it comes to wanting something cheap.

Mooeee

Can't comment on the reason behind the price rises as I don't fully understand the situation re world economics etc. I can't now afford the table saw I was hoping to get so by raising the prices they have lost a sale. I would hope they did all they could to keep prices competitive and haven't just jacked up prices to make a bigger profit or cover losses made elsewhere. I don't expect cheap but I do expect to be treated fairly and, all too often in the UK, we appear to getting ripped off when prices are compared to other countries.