Tool Industry product mark-up

I will preface this by saying I have bought from PWS and was totally happy with the price and service.

Having said that I have a shop full of incra. PWS is 2k kms to the south, timbecon 4500 kms to the west. Incremental tools answer my emails in remarkably short time and with tremendous knowledge and curtesy.

It bothers me more than a little that so much of our workforce is now in retail.

We once had a strong agricultural business, yet we are moving towards being a net food importer. (those frozen peas that say made in aus/nz are actually grown in china and packaged here)

We once had a strong manufacturing business, before the "socialist" Hawke/Keeting government shut that down.

We have a become a one trick pony, and that pony is mining. It is the only real economic differentiator between us and NZ. If that pony drowns, we sink with it. See what happened to the UK.

Sorry this is somewhat off topic.

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Originally Posted by rsser

A good local retailer will give you that; you build a relationship, and you can ring them to sort out a prob and be going within minutes... you can order gear more cheaply from o/s, but bear in mind the threat that poses to loss of local employment and support.

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For the simple reason I chose to support the local blokes - in whatever category/industry that business might fall into. :2tsup:

It might cost more, but so be it.

Yebbut - if we support the local people just on principle, we give them no incentive to improve (or even maintain) quality or service. The UK's industrial sector got to the stage where not much made in the UK was worth buying, so the sector as a whole went pretty much down the drain. The "Buy British" campaign either didn't help or - my guess - actively contributed to the problem.

That said, I'll echo the favourable comments about PWS. Yes, the prices can be a bit steep, but the service is top shelf.

- Michael

I support local based on the principle of receiving customer satisfaction before customer purchase and after. Do that and you get my loyalty or fail to continue to provide that, well...

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Originally Posted by Waldo

For the simple reason I chose to support the local blokes - in whatever category/industry that business might fall into. :2tsup:

It might cost more, but so be it.

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I reckon that we would all agree but the difference between all of us will be the marginal cost that we are each willing to bear to support the local blokes.

For instance, if the margin were just 10%, we would probably all support the local bloke; if the margin were 50%, many of us still would, but not all of us.


However, when the margin is 150%, as it often is, who in their right mind would support the local bloke?


The local bloke has to add some serious value to warrant that sort of a mark-up. I m not sure that when someone buys a fishing downrigger from a chain store like BCF at 150% more than I can import it for myself, that they are going to get any value-add from the kid who tries to answer questions about it.


I was equally unimpressed when I was shopping for a column drill press from Carba-tec 18 months ago. The can't-be-bothered attitude that I got from the kid there when I queried the lateral movement at the chucks in the machines on display made me go elsewhere. ("Well we are not talking about a CNC machine here.")

I subsequently bought a Jet machine at twice the price from elsewhere but the point of the story is that just because a retailer is local does not mean that they deserve a huge price premium on that reason alone.


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Buy British. Today in the U.K. we cannot do that. Cars, no Rover. Trains, either hand built steam trains at over £3m, or imported from Italy. Record Tools, hardly any production, the mills in Sheffield are vacant. Computers, Spectrum, BBC, gone to make way for PC's and Macs. Hi Fi, maybe 1 Scottish producer.There is little British product to buy. Chinese tools? No thanks. Second hand prices have shot through the roof.

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Originally Posted by Mike Wingate

Buy British. Today in the U.K. we cannot do that. Cars, no Rover. Trains, either hand built steam trains at over £3m, or imported from Italy. Record Tools, hardly any production, the mills in Sheffield are vacant. Computers, Spectrum, BBC, gone to make way for PC's and Macs. Hi Fi, maybe 1 Scottish producer.There is little British product to buy. Chinese tools? No thanks. Second hand prices have shot through the roof.

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So what does Britain produce these days? Where does the income come from?



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Most employment there as here is in transport, construction, retail trade, 'hospitality', administration, and professional and community services. Manufacturing employment here is < 20% of the total.

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Originally Posted by rsser

Most employment there as here is in transport, construction, retail trade, 'hospitality', administration, and professional and community services. Manufacturing employment here is < 20% of the total.

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Hmmm. Most of that seems to be internally focussed. A country still has to produce saleable stuff, otherwise it would trend towards poverty. (I think! )

Here we sell minerals, tourism (which I guess is also pretty big in the UK), education, farm outputs and expertise (ie project management of big overseas projects).

So I expect that Britain has other exportable outputs, also. I would not think that they would be so big in the things that we are big in so that is why I thought that manufacturing might be their core activity. After all, that is where the industrial revolution started. :)



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The U.K. makes some money by selling it's gold reserves. The theatre and music. Call centres are outsourced in India, our plumbers and builders are Polish. Thousands of offices do administration. And the odd F1 race car. Rolls Royce sold to the Germans, Bentley to VW (Germans). No apprentice schemes.

Depends how you measure economic activity. Employment is one way; value of goods and services traded another. Not nec in sync. Look at our energy and mineral exports in relation to numbers employed in those industries.

i just bought 2 dmt duosharp 10 inch whetstones from amazon.com for a total inc shipping AU$321.65.

carbatec brisbane would have charged me AU$498 for the exact same products.

i like to support local business but this is ridiculous......

regards, justin.

...same boat as Justin.
A nice package from the US arrived on my doorstep last Tuesday. All up total cost AU$485.
Exact merchandise purchased in OZ would have cost me AU$684 plus freight from Victoria.
Now I don't mind paying a little more over here, but the above math just doesn't compute, and I know I did the right thing by ME.
This argument can go on and on and on...just do what feels right in your circumstance and you feel comfortable doing it.

Cheers

Glenn

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Originally Posted by justinmcf

i just bought 2 dmt duosharp 10 inch whetstones from amazon.com for a total inc shipping AU$321.65.

carbatec brisbane would have charged me AU$498 for the exact same products.

i like to support local business but this is ridiculous......

regards, justin.

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Did you look at these? Diamond Sharpening Plates

thanks waldo, i did look at the dmt diamond plates. 2 reasons i chose not to buy these are, i prefer the diamond encrusted in the plastic plate and i also prefer the larger 250mm plates. those provided in your link only range from 150mm to 200mm.

anyway, over the years i have tried all types of sharpening, oilstones, diamond stones, etc, etc, i really like the 10inch/250mm dmt duosharp whetstones.

trent from harold and saxon also recommends them for his chisels.
and philip marcou from marcouplanes recommends them for his own plane blades, so they cant be too shabby.

regards, justin.

250mm would be good. Likewise I have tried wet stone, oil, wet & dry and am currently using the fine and extra fine stones with great results. I just have to make up a cradle for the DMT stones.

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Originally Posted by brisbanefitter

some of those selling on the net at low prices have little to no overheads, possibly some kind of warehousing but minimal staff.
thos who charge higher amount you may find are large well established operations with multiple store locations, 100's of staff, warehousing costs etc etc etc.
how many web sellers have a store front with actual people you can talk to, face to face over a counter?

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Just to give an etailers take on this, and having had a traditional store for many years previously, I can say the overheads are about the same if not slightly more and webstores are certainly not a cheap alternative to a real shop if you want to do it properly. (ebayers and garage gurus notwithstanding)

The bit you actually see is only the tip of the iceberg, behind the scenes there's usually a massive amount of coding and development which can be very expensive and requires constant maintenance, add to that the cost of simply adding 1 product (which can take up to a day with full photography and editing), throw in some packing materials and labour for every sale and mix lightly with around 5% total gross deduction in fees from merchant accounts/payment gateways and credit card companies and you soon realise that its not the cheapy way of selling that everyone assumes it is :C

The advantage of course is that you are reaching a far wider audience than you could with a physical local store and you are open 24/7 so hopefully that should be reflected in extra sales.

As for a store front, most manufacturers have a bonkers policy of requiring a store front to qualify for a trade account (so we use ours for collections) but we still have a lot of resistance from some big name companies simply because we are web only. :oo:

It is obvious that the convergence of the internet, competitive, trackable, delivery services including the US Postal Service and simple, safe payment facilities like Paypal or Visa and Mastercard have made it so much easier for the average bloke to import stuff from overseas, quite cheaply, thus bypassing sometimes absurd local pricing of the very same stuff.


On the other hand, it also seems to have created an upsurge in home based businesses which obviously have lower costs than those having to pay rent on commercial building space.


That may be the ultimate answer to the quandary faced by Aussie businesses trying to compete in the retail world. The old business adage still holds true, "Get big, get small or get out."


For instance, at least three of the businesses that I have bought stuff from recently are home based, Aussie businesses. "Northwood Tools" showroom is a large room at the back of a house set amongst palm trees overlooking the family swimming pool in the residential area of Burpengary outside Brisbane (plenty of quality stock to be seen there); "The Sandpaper Man" operates out of a small room at the front of a house in a residential street in Manly West in Brisbane (also plenty of stock), and "Bob the Welder" is a home based business in West Ballina in Northern NSW.

All of those businesses have given me excellent service and great prices. Indeed, even with the delivery of heavy welding rods, I have been able to buy cheaper from Bob-the-Welder than I can at Bunnings and with just a one day delivery time to my home in Brisbane. 'Tis more convenient for me to buy my welding rods that way than to drive over to Bunnings.


Indeed, the service is sometimes better with these home based specialists. Last month, I was contemplating spending $475 on a new mower because I could not get the needed part for my 21 year old Rover with a Briggs and Stratton motor. However, by Googling the part number, lo and behold, "Pig Iron Parts", a home based motor parts liquidator in upstate New York, delivered a new part, in its original packaging to my home within six days at a very reasonable price. That saved me the need to spend another $450 this year on a new mower.


So, should we feel sorry for conventional retailers who miss out on sales to us when we import products at greatly reduced prices from overseas? Absolutely not! That is how markets develop. We are seeing the emergence of a very virile worldwide trend in home based businesses to meet the challenges.


I, for one, am all for it.


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The more we buy fror OS, the beter the postal system will get.

There is a lot of product out there, but most Aussie retailers seem to think we all have to have brand names in our sheds. There is comparable (big word for me) products available for a fraction of the price, that they could import.

I build lots of jigs for production runs. There is NO retailer in AU that provides for that. All the knobs and levers (very limited) as well as the track is double the price I can get it posted to me from OS.

Check out the range at this site Woodworking tools, supplies, plans, accessories and more - ptreeusa.com

Cheers Scott

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Originally Posted by Doc0055

The more we buy fror OS, the beter the postal system will get.

There is a lot of product out there, but most Aussie retailers seem to think we all have to have brand names in our sheds. There is comparable (big word for me) products available for a fraction of the price, that they could import.

I build lots of jigs for production runs. There is NO retailer in AU that provides for that. All the knobs and levers (very limited) as well as the track is double the price I can get it posted to me from OS.

Check out the range at this site Woodworking tools, supplies, plans, accessories and more - ptreeusa.com

Cheers Scott

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Disagree one of the forum's newest sponsors McJings does a good range of knobs McJING Tools Online and lots of other gear at similar prices as on that site you put up.

Disagree postal charges never get cheaper even when fuel does.

I picked up some T-track at McJing's this week $10 the good heavy hold downs $10

Tool guys have nothing to complain about as the margins are small compared to the jewelery industry.

They work on the hunreds of percent with everything they sell even up to 500%.
Why do you think they can give such big discounts and still make money.

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Originally Posted by Charleville

So what does Britain produce these days? Where does the income come from?

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The finance industry, that's why they were hit so hard when it went pear shaped.

Britain, Ireland and Australia are one trick ponies.

Ireland tried to set itself up as a low tax company/bank headquarters, worked ok for a while.

Britain let it's manufacturing run down (this was a joint effort of the government, unions, managment etc, no one group could take the second largest auto manufactuing nation to virtually nil in 15 years), the coal ran out, tourism doesn't create enough income to matter much. They let the economy become more and more focused on financial services and trading.

We rely similarly on mining. None of our other industries really matter much, and we are approaching becoming a net food importer. Imagine that eh ? We rode the sheeps back until it got wobbly and collapsed...Australians often scoff at NZ's lower standard of living but the ONLY reason ours is higher is mining income. Like Britain Whitlam, Fraser and Hawke let manufacturing die in Australia, all in the name of "productivity" and "economic rationalism". If mineral prices fail we go down with them. And don't think it won't happen. There were plenty of clever people who never thought the investment banks would collapse the way the did either.

I agree with most of it. I don't think the UK coal ran out. It just was no longer competitive running deep mining when open cast coal from Australia, Poland and South Africa could be produced dramatically cheaper.

Good for Australia in the short term, most of it going to power stations, but vulnerable long term with pollution concerns encouraging a move to alternative power generation.

Cheers

Peter