Buying habbits !

[Spectric]

Hi all

I was wondering today if the major suppliers are missing a trick or two when it comes to selling woodworking tools and machinery. Ok some offer credit at 12.9% Apr but what if you could buy something and the cost was spread over several months so you did not have one large payment to make. I am thinking along the lines of the Tv sales channels where they sell something for say £600 and you pay with five interest free installments, this makes spending easier and I am sure some would spend more to get the higher specification machine rather than limited by their budget at that point in time. This probably applies more to the home user and hobbyist where the justification is harder and you dont earn from the tools but could help many others.

I have a poll to see what others think and perhaps the suppliers will think it,s a good sales tactic and offer it or Axminster on QVC!!!!

 

[AJB Temple]

Thought at first we were talking about nun's clothing.

I have a lifelong rule of never buying anything at all on term credit (I use credit cards for protection, but settle in full) except for property mortgages. In these uncertain times I am even more against personal debt.

I also assume (correctly) that interest free credit is a myth. The seller takes the cost of money into account when pricing the goods. They both avoid discounting the sale and get commission from the finance provider. Nothing is free.

 

[MikeG.]

Thought at first we were talking about nun's clothing. .....

Damn, you got there first!

-

The answer from the entire forum is no, we wouldn't buy any more. We've all got enough tools already.

 

[Inspector]

We just bought an "estate" tractor to work the 9 acre property and for snow removal. We could have got the dealer financing with 0% interest or got a bank loan with a $2,000 discount off the price of the tractor. When calculated if the bank interest was less than 4% we came out ahead. If over it was better to go with the dealer financing. We went with the bank. Both dealer and bank had no penalties for early payout but you don't get the $2,000 back from the dealer whereas paying off the bank loan saved interest.

So if I fell if I really had to by a machine now I would get a bank loan and pay it off as fast as I can rather than pay a hidden loan fee from the dealer. Sellers almost always have a lower cash price than what they will sell for if they have to arrange financing.

Can you guess how I voted?

Pete

 

[Doug B]

I don’t like being in debt so wouldn’t chose finance, it definitely wouldn’t encourage me to buy more tools not that I need encouraging

 

[marcros]

what is the purpose of the question? is it a general wondering, or market research for a business? In fairness to all, if it is market research, I think it should be stated, however I will leave that to your best judgement.

If it is market research, you may find that the demographic of the forum skews the results. We have a lot of members who like to restore old tools, and who dont chase the latest and greatest- many would not see the replacement of their 40 year old saw with a shiny new one as an upgrade. Fairly frequently, we have questions about people setting up a workshop with a lump sum of money- either pension, redundancy or leaving the armed forces are common sources of this. I would be interested to see the profile of the membership, but from comments, there are many "empty nesters" amongst us, as well as some with younger families. This will give an idea of the disposable income, compared with the average tool buyer (I would guess that the membership here are older than the average tool buyer and probably have less need for credit, but it is a guess)

Snap-On made a lot of money over the years by supplying tools to young mechanics on the drip. Others maybe did the same. It is an interesting idea and works on other items. I try to avoid debt where possible, but when I have shopped around and got the best deal possible, I would rather keep my money in my bank for as long as possible. I have used interest free on a couple of bits of furniture, a fairly expensive (for me) picture, a BBQ. It didn't cause me to up spec, just eased cashflow a bit. (The money was sat in another account, just drip fed through rather than going on day 1 of each purchase.) I always make sure that any payments are matched to the life of the asset- so no paying for a sofa over 20 years, and would only do it if there is no discount in lieu of the interest free.

My final point in this long response is the interest free option being free. We all know that it isnt free to the business, it is priced in. That is obvious, but it is often done at a corporate level. The local sales person at the branch has a set of fairly rigid prices. We have all seen the sale ends Monday DFS adverts, and if you do in Monday you get the price, maybe a nominal bit less when the manager steps in to close the sale. Go in Tuesday, you dont get that same price, end of discussion. As a consumer, I buy a sofa every few years when the old one is shot or the wife wants a change. We buy at the DFS/Sofology/etc end of the market and that is their lifespan. It is not practical to try and negotiate with the chief exec, and if you start discussing the genuine cost of interest free credit to the branch, they dont care, they are measured on sales. What is the discount if I pay in full now? zero sir...

 

[Doug71]

Years ago some old bloke gave me the advice "If you can't afford it you can't afford it.". I only buy something if I can pay for it, if not I save up until I can afford it.

 

[marcros]

Would you turn away work that required a specific tool, even knowing that there was more of that work available if you had the kit?

If you had the money but the option was there to spread the payments at no cost, why wouldn't you at least consider it?

 

[Doug B]

Would you turn away work that required a specific tool, even knowing that there was more of that work available if you had the kit?

Personally If I hadn’t got the money to buy the kit outright then yes, I’ve gambled before on continuity of work that never happened & though it didn’t involve going into debt it still causes hardships when supposed guaranteed work doesn’t materialise.

If you had the money but the option was there to spread the payments at no cost, why wouldn't you at least consider it?

Well if the finance has been built into the price then no but if the price was as cheap as I could get then yes I’d consider it........then more than likely pay cash for it.

 

[MikeG.]

Would you turn away work that required a specific tool, even knowing that there was more of that work available if you had the kit?......

Is there such a thing? Genuine question, but can you think of something a joiners shop or a carpenter couldn't do without a specific tool, given that they'll have all the standard tools already?

 

[Doug B]

Is there such a thing? Genuine question, but can you think of something a joiners shop or a carpenter couldn't do without a specific tool, given that they'll have all the standard tools already?

A good friend has just bought a huge cnc on finance & basically on the strength of one very big job, so it can happen.

 

[MikeG.]

But anything you can do with a CNC you can do with standard tools. You maybe can't do it as quickly or efficiently, but lack of a CNC is hardly going to stop you taking a job on.

 

[clogs]

When I bought my first Harley Davidson....I can remember my dads words (long past on)....
when u put the cash on the counter RIGHT then u decide if u really want it.....!!!!

 

[Lons]

A good friend has just bought a huge cnc on finance & basically on the strength of one very big job, so it can happen.

Not uncommon but it's a calculated risk and the risk is very real unless that job is guaranteed from start to fulfilment and if the full cost of the machine, or whatever you're buying for the job isn't recovered during that time then it might never be recovered.

I'm not saying risks shouldn't be taken but personally I wouldn't have done it unless I could afford to lose what I'm spending which really means no finance.

The government interest free / low interest loans changed the dynamics a bit though the people I know have just used those to pay off existing loans rather than buy new equipment.

 

[wallace]

Wadkin were doing payment schemes back in the 5O's

 

[johnnyb]

I am to the core no debt. but I can see the risk/ reward potential of buying a machine and having a good chance of getting more of the same work. I guess I'm a risk taker then. buying tools ie small purchases I dont see the point.
I was working on a house bay last week another young joiner turned up in a small van(connect) to fit skirting. he had the most incredible selection of new tools. his battery chopsaw was 600 etc etc. no coping saw, 2 blunt chisels. it may have suited him. all my tools looked battered in comparison.

 

[marcros]

Is there such a thing? Genuine question, but can you think of something a joiners shop or a carpenter couldn't do without a specific tool, given that they'll have all the standard tools already?

for an established joiner or carpenter then there are many ways to skin a cat, and I dont disagree with your point, far from it. Examples that spring to mind- a reasonable van maybe, equipment to a business starting up (not suggesting that it needs to be top of the line kit, possibly even buying a business. Some work is on such tight margins that whilst it is possible to complete it using other methods, taking on volume supply wouldn't be feasible- eg replicating volume cnc cut components by hand.

Maybe my point strays away from the taking on debt aspect and into job pricing and risk. To me they are connected. You get a few enquiries for bespoke skirting each month, so you can cost the bespoke spindle cutter into the first job it is used for, but you can't price a whole spindle moulder into that first 200m run. you run some numbers to see how often the machine will be used and whether it will earn its keep. the debt vs pay cash is just another consideration. yes you could use moulding planes, but there becomes a point where you won't get any of the jobs because the labour element is too high.

 

[MikeG.]

......I was working on a house bay last week another young joiner turned up in a small van(connect) to fit skirting......... no coping saw........

How did he fit skirting without a coping saw? Did he just use a jigsaw carefully, and leave it up to the decorator to sort out?

 

[Droogs]

Probably everything on a bevel cut and gap filled with caulk

 

[MorrisWoodman12]

There is no thing as interest free credit as many others have already stated, the cost of the interest is built upfront into the price. Yes it is. Whoever's heard of a successful businessman giving anything away? The thing that really, yes REALLY, gets my gander up is that you cannot get a discount when you pay the full amount without taking the IFC. In other words you pay for the interest even though you don't get credit and the seller ggets takes the iinterest as a bonus. I'm like many others who avoid credit but wonder if I should take the 'IFC', put the money in the bank, getting some interest on it (ha,ha), and set up regular payments.