Lie Nielsen tools

[D_W]

Back to LN, adding to what Tony said. When LN was unable to meet demand when going through mostly retailers and gray market, they went back to mostly marketing in house and only increased in size moderately and not immediately.

If they are having trouble meeting domestic demand in the US without compromising their principles, it probably signals at least for now, they'll pull distribution back closer to home (the US) and you'll be stuck trying to buy planes on ebay and ship them to England.

This doesn't help people in the US trying to find planes for less than new at used price, but we do plenty of this to you guys buying your tools on ebay at a price several times that which you'd pay in person there.

From LN's standpoint, they like to travel around and demonstrate their planes because they have a philosophy that they need to be accessible and able to be tried in a certain way. If they are shipping planes overseas and not able to travel around and demonstrate and take domestic orders, they probably don't like it.

 

[Vann]

Mate, I know you live on the other side of the planet....But the flag is still the wrong way up.

Yeah, that's what it looks like from down-under .

Actually, I never noticed. I wonder if I sourced the picture from the Russians...

Is this better?

Cheers, Vann (who's off to source another flag photo).

 

[shed9]

In their accounts filed last year, Thomas Flinn & Co (the makers of Clifton) had net assets of $350,000 (£270,000). Their corporation tax liability was £60k so approximates to £300,000 profit. Now you can't tell everything from a limited company accounts about the health of a business, but it implies to me they are not a massive business and there is no reason to lower prices - they can't afford it and can't meet demand either

That's not a profit calculation. I agree you can't tell everything from the posted accounts of a limited company, so why go on to make specific negative claims that can't be extracted from those accounts?

No disrespect to yourself meant but it's a tad irresponsible to comment on the viability of a business online without actual facts, especially when those comments are aimed at that company's target customer.

 

[Adam W.]

Yeah, that's what it looks like from down-under .

Actually, I never noticed. I wonder if I sourced the picture from the Russians...

View attachment 132242 Is this better?

Cheers, Vann (who's off to source another flag photo).

Perfect!

 

[BucksDad]

That's not a profit calculation. I agree you can't tell everything from the posted accounts of a limited company, so why go on to make specific negative claims that can't be extracted from those accounts?

No disrespect to yourself meant but it's a tad irresponsible to comment on the viability of a business online without actual facts, especially when those comments are aimed at that company's target customer.

I don't believe I commented on their viability or success as a business, I commented on the fact they're a small business and therefore there is not the margin or incentive to lower prices - I think we'd agree that large companies have much more flexibility with pricing and expansion to meet demand.

It was merely to serve as an explanation of why they have no need to lower prices as someone said their pricing strategy was wrong and I was arguing that their accounts show the strategy was correct.

What we know for certain from their accounts is they had an audit exemption which means they are a small business

 

[pgrbff]

I have a Lie Nielsen 62 in good condition I haven't used in some years. I'll have to dig it out as it's still packed from when I moved in 2012.
Should still have box.
I have been intending to list it on eBay, but after a bad experience where a courier signed the delivery docket but failed to deliver for several days, and Paypal wouldn't consider reimbursing me.
Fortunately, the item did turn up in the end.

 

[shed9]

I don't believe I commented on their viability or success as a business, I commented on the fact they're a small business and therefore there is not the margin or incentive to lower prices - I think we'd agree that large companies have much more flexibility with pricing and expansion to meet demand.

It was merely to serve as an explanation of why they have no need to lower prices as someone said their pricing strategy was wrong and I was arguing that their accounts show the strategy was correct.

What we know for certain from their accounts is they had an audit exemption which means they are a small business

....and yet you carry on sharing your opinion on their viability, this time their margins, incentives and strategy? Do you have any details on their group structure or commitment to the limited entity from within that?

 

[SMALMALEKI]

I don't believe I commented on their viability or success as a business, I commented on the fact they're a small business and therefore there is not the margin or incentive to lower prices - I think we'd agree that large companies have much more flexibility with pricing and expansion to meet demand.

It was merely to serve as an explanation of why they have no need to lower prices as someone said their pricing strategy was wrong and I was arguing that their accounts show the strategy was correct.

What we know for certain from their accounts is they had an audit exemption which means they are a small business

I need to make it clear.
LN has its products priced for the US market let’s say $250 which is almost £190 but we end up paying £280 due to different added costs of importing. The TF is pricing their products almost £280 and equal to LN product.
They could use their advantage of being local producer to dominate UK market with a competitive price.
for this simple reason I don’t but new Clifton products.

I would have done it if it was my business.

 

[Blackswanwood]

I need to make it clear.
LN has its products priced for the US market let’s say $250 which is almost £190 but we end up paying £280 due to different added costs of importing. The TF is pricing their products almost £280 and equal to LN product.
They could use their advantage of being local producer to dominate UK market with a competitive price.
for this simple reason I don’t but new Clifton products.

I would have done it if it was my business.

Not sure I follow your logic.

LN small shoulder plane is $185 local price which is £140 at current exchange rates but retails in the UK at £206.

Clifton small shoulder plane retails at £192.07 which is already competitive.

I don't know the size of the market for premium wood working tools but guess it's not massive so the scope for larger market share at a lower margin resulting in higher profit sounds exceptionally risky.

 

[BucksDad]

Not sure I follow your logic.

LN small shoulder plane is $185 local price which is £140 at current exchange rates but retails in the UK at £206.

Clifton small shoulder plane retails at £192.07 which is already competitive.

I don't know the size of the market for premium wood working tools but guess it's not massive so the scope for larger market share at a lower margin resulting in higher profit sounds exceptionally risky.

And this was the point I was trying to make, particularly when you are a small business.

@shed9 I still don't believe I was commenting on their viability, just pointing out their pricing strategy was correct. And yes, if you look at Companies House, you can see how their company is structured... However for the avoidance of doubt, I would gladly remove the comments & figures from my previous postings, unfortunately the forum doesn't allow me to do so, so the mods will have to remove it (@MikeK)

 

[SMALMALEKI]

Not sure I follow your logic.

LN small shoulder plane is $185 local price which is £140 at current exchange rates but retails in the UK at £206.

Clifton small shoulder plane retails at £192.07 which is already competitive.

I don't know the size of the market for premium wood working tools but guess it's not massive so the scope for larger market share at a lower margin resulting in higher profit sounds exceptionally risky.

That’s exactly the numbers thank you. LN small shoulder plane was £185 until last weekend and Clifton was £190.
I think they should be near to £140 as LN actual pre export/input duty added.

 

[D_W]

I think you'd find that Flinn can't make them profitably at that.

If the figures above are correct, let's assume (anyone with facts can change these to be the right facts - and for self appointed mothers on here, if these are completely off- seems a bit low to me from a feel standpoint for total numbers - this is an illustration with the important point of this being margin. Not magnitude).
* Flinn make 370k revenue
* flinn shows a margin of 60k
* clico folds, but before they do, they sell of anything anyone is willing to buy (clifton planes here). If flinn has purchased the brand for some cost, that has to be repaid or it makes no business sense. An upstart making their own way has to popularize what they're selling, but they don't have this initial cost
* Flinn changes certain elements (one on this case, the iron, may be due to sourcing the iron - they could be sourcing all kinds of stuff, who knows).
* Flinn charges 190 for a plane that they make in small numbers compared to LN

Your proposed price is 24%+ less than their current price.

Where does it come from? If the margin figures above are correct (or even close), they may be before repayment of the cost of acquiring the rights to make clifton planes. In the US, that's an after tax purchase, which is painful.

Even if they're not, they are suddenly making something at or below cost to grow market share.

Sheffield is famous in the US for not changing processes to be competitive. Two very popular instances on US forums occurred where clifton planes came to the US unusable, and the buyer was never made whole. At the time, LN actually gave accuracy specs and they would often take stuff back even if a user was just dissatisfied with something that was in spec (I unfortunately did that once thinking an iron may be a bit soft - they tested it, it was 61.5 hardness - I was embarrassed. They mentioned that it was from a prior heat treater and may have a different feel on the stones that I"d noticed and offered to send me a new one for free along with my old one. I apologized and declined their offer).

I'm not sure why flinn is taking heat here (I get the price difference). Clico couldn't make planes at the same price or they'd probably be doing it. LN is privately held, so we don't know what they make, but their prices have changed 10 or 15 percent in 15 years. I'd bet they're hard to compete with at a same quality level without offshoring planes (and then that creates a burden - if you really want a specific quality in china, you either have to get lucky and find an enthusiast, which is probably not that common, or have someone in china permanently or often. The fickle market of internet buyers will pick apart the smallest differences)

 

[BucksDad]

@D_W please remove your comment. We don't know their revenue or true margins

(I have upgraded to a UKW Supporter so I can edit my previous post and remove it)

 

[D_W]

@D_W please remove your comment. We don't know their revenue or true margins

it is an example, an illustration - you need straw numbers to grasp the concept. We don't know the actual numbers, so it doesn't really matter what they are unless they are materially incorrect (e.g., a lot of overseas stuff sold at woodworking suppliers is marked up 2-3 times. If someone would assert that's the case with flinn, that'd be interesting - and incorrect).

Nobody is assailing their business condition - rather making the case that it's a bit entitled for folks to look from the outside and state what their prices should be (this always ends up being lower than the current price).

 

[Daniel2]

We pay it, they stay in business......everything is good with the world.

 

[SMALMALEKI]

I think you'd find that Flinn can't make them profitably at that.

If the figures above are correct, let's assume (anyone with facts can change these to be the right facts - and for self appointed mothers on here, if these are completely off- seems a bit low to me from a feel standpoint for total numbers - this is an illustration with the important point of this being margin. Not magnitude).
* Flinn make 370k revenue
* flinn shows a margin of 60k
* clico folds, but before they do, they sell of anything anyone is willing to buy (clifton planes here). If flinn has purchased the brand for some cost, that has to be repaid or it makes no business sense. An upstart making their own way has to popularize what they're selling, but they don't have this initial cost
* Flinn changes certain elements (one on this case, the iron, may be due to sourcing the iron - they could be sourcing all kinds of stuff, who knows).
* Flinn charges 190 for a plane that they make in small numbers compared to LN

Your proposed price is 24%+ less than their current price.

Where does it come from? If the margin figures above are correct (or even close), they may be before repayment of the cost of acquiring the rights to make clifton planes. In the US, that's an after tax purchase, which is painful.

Even if they're not, they are suddenly making something at or below cost to grow market share.

Sheffield is famous in the US for not changing processes to be competitive. Two very popular instances on US forums occurred where clifton planes came to the US unusable, and the buyer was never made whole. At the time, LN actually gave accuracy specs and they would often take stuff back even if a user was just dissatisfied with something that was in spec (I unfortunately did that once thinking an iron may be a bit soft - they tested it, it was 61.5 hardness - I was embarrassed. They mentioned that it was from a prior heat treater and may have a different feel on the stones that I"d noticed and offered to send me a new one for free along with my old one. I apologized and declined their offer).

I'm not sure why flinn is taking heat here (I get the price difference). Clico couldn't make planes at the same price or they'd probably be doing it. LN is privately held, so we don't know what they make, but their prices have changed 10 or 15 percent in 15 years. I'd bet they're hard to compete with at a same quality level without offshoring planes (and then that creates a burden - if you really want a specific quality in china, you either have to get lucky and find an enthusiast, which is probably not that common, or have someone in china permanently or often. The fickle market of internet buyers will pick apart the smallest differences)

Hi
My price comparison was just a market reality. We get charged more compared to our friends on the other side of the pond.
The fact that I see some item overpriced is my personal opinion. Although I would love to support the last man standing but my budget stretches to a limit.

 

[D_W]

I don't think your comment was unreasonble. It's entirely reasonable from the standpoint of if something is made at a price in the US at the same level, then what's the difference in the UK? I don't know the answer to that aside from making the side point that LN probably operates "solvently" at their price level much because they're in maine and partially due to them not making rash actions.

Stuff made in the US tends to be cheaper here than it is in the UK, and other things imported from neither place can be cheaper here due to volume. We get shelled on stuff from Europe or UK, though. Like the Marshall UK amplifiers (and probably all Marshall). For whatever reason (I'd love to know what it is), distribution and retailing makes the marshall amp price much higher than UK or europe even after they've added vat and before we add sales tax.

Part of the answer to that is that marshall can get it here and I guess not in europe. But for overseas (especially first world goods) items, we often have someone with exclusive distribution here and the price is very high.

Shapton stones are a good example - some of the pro stones in the US cost twice the Japan cost. Which is interesting because they're regarded as a basic commodity stone in Japan (not hard to find a 12k pro on buyee for the equivalent of $55 from a retailer including shipping and 9% japan consumption tax).

The name-adjusted version of same here in the states for a long time was well over $100 (125-140). The gap was made up by touting the capability and higher end nature of the stones. Which just wasn't factually true in my opinion.

AT the time I'm talking about H. Stanley was the source of US market stones. I have no clue what his share was as distributor (it would've been the retailers tacking on, too), but you could just buy the stones from japan and pay EMS shipping and pay far less.

We also have a US distributor of chosera stones - those aren't that cheap in japan, but to be cost competitive, apparently, a second line of stones came up and was distributed here (one distribution point) with the statement that the chosera stones were too expensive to make so a smaller replacement was being offered. This also turned out to be factually false - I saw them sold on japan yahoo new at retail for a long time and a quick look now shows that amazon fulfillment just sells the stones:
https://www.amazon.com/Naniwa-Chose...ocphy=9005947&hvtargid=pla-348082930249&psc=1
When someone here, china, japan, whatever, has a whole bunch of things like japanese diamond hones or exclusive japanese stones sent surface mail and listed for a small markup, I guess it torpedoes someone who has exclusive distribution rights, but it gives us a bit of a shocker in terms of true cost of distribution.

Atoma is another example - limited distribution appx 2010 and cost in the US was $105+shipping.

Now just sent to amazon fulfillment and sold third party - $58 including shipping for a #140 made in japan bench stone.

Sorry for the too-long answer, those things just stick in my head because I always remember the things we pay more for due to distribution and I think the overseas sentiment is everything here is cheap. Most things sold here that are made here are cheaper here unless another market won't tolerate it (e.g., gibson guitars are cheaper in japan than they are here despite being made here - because the japanese market apparently just won't pay gibson's advertisable price as they have a number of domestic guitar makers who make guitars just as well for cheaper than even their lower price).

It does give me a bit of a wedgie to see gibson's guitars for 10% less in japan after they add a 9% consumption tax (our prices are before sales tax). They're getting the same thing for somewhere around 18% less once you do up the ratios.

 

[D_W]

Side comment, too - canada and the UK have an advantage over US manufacturers where employee benefits are concerned. The cost of health care and compliance here for lower paid individuals (health care costs being flat as a dollar figure for an insurance carrier regardless of EE wages vs. stating the load as tax percentage) such as unskilled labor....really makes it difficult to manufacture things here. Benefits have to be offered for full time (30+ hours) employees at a baseline level that's way above the cost of related taxes covering them in the UK or Canada.

Though I don't actually use LN tools, I see their holding the line over the long term as being kind of exceptional. I can't believe they can weather the current high inflation environment for long and would think a pair of 10% increases are coming or one of 15-20%.

They could prove me wrong. Eons ago, I bought a LN 7 when their list price was 425 (it's still 425) and I got a retailer (also in maine) to ignore their new no-discount rule and give me $25 off. I wouldn't ask that now, but was a little miffed at the time because LN was pulling most retailing back to in house and they banned retailers from offering discounts. That stings a little bit when it's new. Now, I would buy from their store front end because they've erased whatever they gained from that several times over.

 

[D_W]

I find a topic like this highly interesting because it illuminates to some extent what it costs to get domestically made goods.

An apprentice in 1910 in the highest of union wage areas would need to work a full day or more to afford a stanley jointer.

It's hard to compare pay now because so much is in it other than cash (it would've been mostly cash back in 1910), but it's not uncommon for a union carpenter to have a wage package that's $80 an hour here or more, which puts something like an LN plane kind of where stanley was. Stanley probably had more operating room (margin) at the time, and their planes more "industrially" than the more precise modern version of CNC clean up tightening results on relatively routine goods (there's still casting by a supplier, and still a lot of hand fitting and finishing work done on certain parts).

One other example here that may no longer be the case - Ashley iles bench chisels in the US - a set of 6 would've cost me around $240 with tax half a decade ago. I wanted to try them (I still adore them). I ended up buying them from the UK and paying for royal air mail and they were still cheaper by $60. We don't pay the vat, of course, so anyone doing this where it's allowed tends to find the retailers who won't charge VAT to US addresses.

it costs money for TFWW (who sold the chisels here) to market them and retail them, and if I weren't what I am - someone who will buy, try, move on, pass along and hopefully limit exposure - I would've just bought from TFWW. Even they didn't have them in stock at the time, though.

That's a better comparison to the LN thing because it's flip flopped and the extra that we pay is probably about the same as the reverse on the LN side.

Nobody in the US makes chisels comparable to AI. LN makes nice chisels, and maybe some other folks do, but at the time, the AI cost with shipping was $30 a chisel and they have the English chisel proportions that little over here has. Sorby and crown are sold here, but their chisels are probaly made of steel with less carbon than O1 and the performance suffers a lot for it.

 

[richarddownunder]

Message to the budding realists out there. You don't need these expensive tools to create beautiful furniture. Just learn how to sharpen and hone well. All you need is a few good old tools, as long as they have Sheffield steel, because it is the best in the world. Get all your advice from Grandad and not 'you tube' and away you go. All you folks that pay hundreds or thousands of pounds for one tool.... pah! you need to get over yourselves!

That's a bit unfair. Sure you don't need them but I would have thought it was up to the purchaser to decide what they want and what fits their budget. If we cant admire nice tools, why bother admiring nice (and expensive if you buy it) furniture, when a second hand Ikea will do the job just as well?.