Festool and Retail Price Maintenance

[mister henderson]

Another point- Festool maintaining their retail price doesn't directly benefit them, it benefits their stockists. Anyone who has ever run a business will know just how expensive that is, and it's getting worse all the time.

That's not true - why would they do it? Altruism?

It stops successful retailers who succeed in selling in volume from exerting price pressure on the manufacturer.

That is why it is unlawful and illegal - because it stiffs the consumer and keeps profits artificially high.

Yes, but whose profits?The retailers!, not Festool themselves. If Festool owned the retailers then it would be entirely lawful for them to set the price. They don't own them, therefore don't benefit themselves. I can only assume that you have never been involved in a retail business. Profits artificially high? That's a laugh, most retailers are hanging on by their fingernails.

If it was left up to market forces then there would be no specialists tool shops left, just B&Q's and ebay traders. I think that would be a bad thing, how do you feel about it?

 

[Jake]

So, until Festool intervened to save tool shops, they were all going bust?

Even the good ones?

Yes, it helps the manufacturer's prices, if the retailers cannot discount. That's just obvious. It's why retail price maintenance is so popular with manufacturers, and why it was banned in the first place.

 

[mister henderson]

Yes, it helps the manufacturer's prices, if the retailers cannot discount. That's just obvious.

No it doesn't, nor is it obvious.

People who make top quality stuff hate their products being discounted for marketing reasons, not reasons of profit.

Think about it. If you made quality furniture and sold it through shops, you would want them to make a reasonable profit, wouldn't you? Yes of course you would. If they made a reasonable profit then they would try hard to sell them, they would have attractive displays, the customers would buy them and everybody would be happy.

But what if an Ebay shop started selling your stuff and only took half the profit (which they could afford to because they didn't have to maintain a showroom, staff it, light it, provide a car park etc etc etc). How would your other retailers feel, would they continue to sell your furniture? Of course not.

It's entirely reasonable for people not to buy Festool products, and it doesn't matter what their reasons are. But it is not reasonable to say that Festool are doing anything wrong. Illegal maybe, but not wrong.

 

[xraymtb]

I would like to remind people that Festool have not been shown to have done anything illegal at the present time and we should all remember that when we post.

This entire thread, and others that have come before, are based upon the assumption that Festool have fixed the prices of their products - an assumption that has not been proven. The original post, linking to a judgement made in Australia, does not allow any of us to say otherwise.

I do think discussion of these issues is valid and of great interest and am merely suggesting that we try not to convict Festool of any wrongdoing without valid evidence.

 

[Jake]

Yes, it helps the manufacturer's prices, if the retailers cannot discount. That's just obvious.

No it doesn't, nor is it obvious.

People who make top quality stuff hate their products being discounted for marketing reasons, not reasons of profit.

Oh well, I can't be bothered to argue with you any further than this, but you are wrong. Yes, of course they want to be seen as a premium brand, as well as selling premium tools, but the setting of their own prices to the retailer ought to be the thing that determines that.

 

[chippy1970]

Part of the reason why Festool, AND MANY OTHER COMPANIES, control their prices like this is to maintain a high level of service to customers at the local level.


Regards A High Level Of Service

I brought a CS70 sawbench, around 2 years ago when i was fitting a lot of kitchens, great machine no complaints, until after a few months, if the saw was being used for long periods, suddenly it would lose power as if the variable speed had been turned down, but with complete lose of torque.

I took it back to the shop, off it goes for the first trip, no saw for 2 weeks, back it comes, nothing wrong they say, a few weeks later same again, of it goes again, back it comes, they say the same again.

Clearly there is something wrong with the machine, either that or myself and others using it, are all going mad.

Festool comments, it is all as it should be, and there is nothing wrong.

Great service that. I am so glad i paid so much for it now with such wonderful backup.

I have been using festool tools for over twenty years, and they are not what they once were.

Regards comparing festool to porsche's and BMW's , i think you need to get out more.

I need to get out more :x :x :x :x :x :x :x

AND WHO IS IT THATS WASTING TIME ON HERE MOANING ABOUT FESTOOL ? I think it might be you that needs to get a life mate :x

Also I was not saying that Festool are equal to Porsche I was trying to show that other things like cars have an EXPENSIVE brand and a CHEAP brand.

If you have been using Festool for twenty years as you say then surely you have left it a bit late to moan about them now.


At the end of the day Festool do not price fix I have always got discount on stuff that I have bought. By the way I am not a Festool only nutter I buy hundreds of other brand tools so I dont need to stick up for Festool.

 

[andycktm]

Just got in Chippy :lol: :lol: :lol:

 

[chippy1970]

Yeah just been down the Festool Arms for a Heineken and some Sauerkraut :lol: :lol:

 

[ivan]

We live in a society that works on the basis that competion generally makes best use of scarce resources, so any attempt to reduce competion between manufacturers or retailers is made illegal. Incidentally I believe Festool pricing, whilst top of the market, is closer to competing brands in the US than here.

Those who manage to get out of the workshop now and then will probably have heard of the phrase 'Rip off Britain'. Consumer tv programs and the Consumer's Association have highlighted the fact that all sorts of items which are sold in several countries are commonly sold at the highest price of all(excluding tax) in the UK. As a nation we apparently are prepared to accept paying more than folk in other countries.

 

[BradNaylor]

I think we've established that Retail Price Maintenance is illegal, and that Festool have been found guilty of this in Australia. It would also seem to be clear that their practices are no different here.

Mr Henderson makes an interesting point about the internet however. An online retailer can obviously afford to work on much lower margins than one who has to maintain and staff a showroom operation.

If Festool (or anyone else) is prevented from setting retail prices, what is to stop them simply refusing to supply a retailer who sells online?

However, my suspicion is that eventually the vast majority of power tools (and other goods) will be sold over the internet directly by the manufacturers, thereby cutting out the entire retail trade. And then there will certainly be no competition on price on any particular brand.

It will be a sad day though, when there are no tool shops to browse around - just online catalogues...

Cheers
Dan

 

[mister henderson]

Oh well, I can't be bothered to argue with you any further than this, but you are wrong.

I think you are entitled to disagree with me, but to baldly state that 'you are wrong' is getting a little bit close to the edge of what is acceptable.

I am still interested to hear any cogent argument you have against the points I have made.

 

[xraymtb]

I think we've established that Retail Price Maintenance is illegal, and that Festool have been found guilty of this in Australia. It would also seem to be clear that their practices are no different here

This is the kind of statement I was hoping to avoid with my earlier post. We should be careful not to comment with such finality - if for no other reason than to protect the forum we all enjoy using so much.

 

[mrwilby]

I think we've established that Retail Price Maintenance is illegal, and that Festool have been found guilty of this in Australia. It would also seem to be clear that their practices are no different here

This is the kind of statement I was hoping to avoid with my earlier post. We should be careful not to comment with such finality - if for no other reason than to protect the forum we all enjoy using so much.

I think you only need to look at the price of any festool equipment to see that there is clearly an inability for retailers to adjust the item pricing.

Furthermore, if you contact festool retailers and ask for a quote, you will find it quite common to be told that prices cannot be discounted, but some items can be provided for free instead.

Make of that what you will.

BTW, I have an extensive range of festool items, so I'm not anti-festool. I agree with everything Jake has posted in this thread and also in the prior thread (just a week or two back). Tooltechnic should be investigated by the OFT IMO.

 

[BradNaylor]

I think we've established that Retail Price Maintenance is illegal, and that Festool have been found guilty of this in Australia. It would also seem to be clear that their practices are no different here

This is the kind of statement I was hoping to avoid with my earlier post. We should be careful not to comment with such finality - if for no other reason than to protect the forum we all enjoy using so much.

I chose my words carefully, Mike.

'It would also seem to be clear that their practices are no different here'

That is not 'commenting with finality'. No chance of a libel suit there!

Cheers
Dan

 

[Jake]

I think you are entitled to disagree with me, but to baldly state that 'you are wrong' is getting a little bit close to the edge of what is acceptable.

You ought to bear in mind perhaps that I was responding to your post which said:

But it is not reasonable to say that Festool are doing anything wrong.

So it's OK (for you) to say that a (my) view is unreasonable, but not acceptable (for me) to call a view (yours) wrong? How does that work, then?

I am still interested to hear any cogent argument you have against the points I have made.

I've told you why economists/regulators/law-makers/lawyers/judges etc regard retail price maintenance as wrong, and why it is unlawful and illegal, and contrary to the running of an efficient economy (and thus to the interests of consumers). You're just not reading what I've written, or you are ignoring it.

 

[mister henderson]

I think you are entitled to disagree with me, but to baldly state that 'you are wrong' is getting a little bit close to the edge of what is acceptable.

You ought to bear in mind perhaps that I was responding to your post which said:

But it is not reasonable to say that Festool are doing anything wrong.

So it's OK (for you) to say that a (my) view is unreasonable, but not acceptable (for me) to call a view (yours) wrong? How does that work, then?

I am still interested to hear any cogent argument you have against the points I have made.

I've told you why economists/regulators/law-makers/lawyers/judges etc regard retail price maintenance as wrong, and why it is unlawful and illegal, and contrary to the running of an efficient economy (and thus to the interests of consumers). You're just not reading what I've written, or you are ignoring it.

I think the time has come for us to both drop out of this discussion without saying any more, and agreeing to disagree

 

[Anonymous]

]

How can you compare Festool to Dewalt unless you are saying Festool tools are rubbish as most of Dewalts tools are.

Can you substantiate this statement?

Dewalt are pro quality tools and the two I own (Mitre saw and 1/2" router) as as good as the Festool (router considerably better in my opinion) I own in build quality and use. I have had no problems at all with my Dewalt kit and would buy again without hesitation.

 

[chippy1970]

Ok Tony as you asked.

I bought a Dewalt 625 1/2" router a couple of years ago this router was never right , things like a lot of vibration and the cutters would visibly wobble as the router slowed down.

This router was returned to Dewalt maybe 6 or 7 times and they kept saying that there was no problems with it. Eventually after months of wasting my time they agreed that I was right and there was a problem, something inside was bent from manufacture.

They swapped the router for a new one and after 1 month I noticed that the silver casting around the motor was starting to crack (another manufacturing fault).

Dewalt then said we are very sorry what do you want us to do so I said the least they could do was give me the top of the range DW626 router as compensation which they did and so far that one has been ok.

As for your comment that the Dewalt router is as good as the Festool one have you actually used a Festool router if so which one ?

The OF1400 router is of a much better build quality than the Dewalt, it has much better extraction, it has a ratchet system for quicker cutter changing, it works with a rail system, it has clip on template bushes and many more features.

So how can you say the Dewalt is better ?

ONCE AGAIN I AM NOT A FESTOOL ONLY PERSON so dont get me wrong I dont blindly like all their stuff

ie I have heard that their jigsaws are not as good as my Bosch jigsaw not surprising as Bosch invented the jigsaw.

 

[Petiegolfer]

Ping do the same thing with there golf clubs. If a dealer is caught selling them cheaper they lose their account.

Selling something for say £200 and only making a tenner on it...barking mad if you ask me. Running a big store well costs a lot of money. There arent many who survive.

Golf pros form cooperatives to increase their buying power from the manufacturers. Some manufacturers will only give them an account if they agree to buy so much stock.

I cant imagine its any easier selling tools?

Festool in a way help dealers because they know that they will get the local trade from those items as they wont be under cut by the guy in the next town or the online fulla's...not necessaryily a bad thing!

Would be good if Festools were cheaper though!

Piers

 

[Anonymous]

Ok Tony as you asked.

I bought a Dewalt 625 1/2" router a couple of years ago this router was never right , .

One faulty router does not make all their tools poor quality.