Why are tools so expensive

[Baddabing]

It really annoys me that we seem to be getting ripped off big time, in Australia when it comes to the price of tools.

For example: DeWalt 10" table saw XE 745. In USA you can pick up with a stand for around US$299. https://www.lowes.com/pd/DEWALT-10-in-Carbide-Tipped-Blade-15-Amp-Portable-Table-Saw/1000465645
In Bunnings, the same saw is $949, occasionally with a stand via redemption. https://www.bunnings.com.au/dewalt-1850w-254mm-table-saw_p6260316
Now US$299 is around A$399. Some will say freight is the killer...I say BS to that. I import around 300 containers a year from the USA and sea freight is pretty cheap, around A$5,000. I expect you would get around 16 of these saws on a pallet, 20 pallets per container = 320 saws at a cost of around A$15 per saw. So, if retailer margins are consistent across both countries, the saw should cost A$415. Where does the other $534 go? Now maybe because we run at 240 volt and the US at 110 volt, some additional cost may be in the motor. It still leaves a huge hole and someone is profiteering big time. It is pretty much the same with Bosch, Milwaukie etc across all power tools.

Now lets look and hand tools. A Stanley block plane is USA is US$36.00 or A$48.00. Lets assume freight is about $5 per plane (probably only a couple of bucks) we are up to A$53.00. https://www.homedepot.com/p/Stanley-6-in-Bailey-Low-Angle-Block-Plane-12-960/203727261. The same plane in Bunnings is A$159.00 https://www.bunnings.com.au/stanley-50-x-35mm-adjustable-block-hand-plane_p5767091. How do we get from $53.00 to $159???? !!!

It really pees me off. We are getting ripped off unbelieveably.

[Chris Parks]

These comparisons never work because the Americans think they are getting ripped off at the prices you quote so can you explain that? Do you think the Americans have a valid reason to say that they are getting ripped off because they sure think they are. The Poms think they are getting ripped off also and the Americans in some cases say they can buy cheaper in the UK than the US. As I said comparisons do not work.

[BobL]

This has been gone over and over ad nauseum in these forums.

Just for a start, minimum wage in the US is ~AUS$10/hr in Australia its almost double that.
That's why tools in the US look expensive to the average US worker.

[aldav]

There's always options. Why you'd buy a new Stanley plane from Bunnings when you can buy a Luban from any number of local sellers for less is totally beyond me. Only a consumer with a complete lack of knowledge of the product options and quality would do that. To get value you have to study the field.

[Beardy]

I agree with what Chris said, the grass is always greener on the other side.

You can’t expect the living conditions we enjoy here and the pricing structures of other economies

[tonzeyd]

As others have said prices are relative to the economy

Prices are relative to wages in any particular country. Similarly you can buy cars cheaper in Thailand than Australia for exactly the same item hence why Australia is constantly battling gray imports/replica's

Plus it also depends on the supply chain, don't know what its like in other countries but here in Australia there are distributors supplying to distributors which then onsell it to the end user with each distributor taking their own cut.

This is even before we get into supply and demand factors, pricing to minimise back orders etc

[KBs PensNmore]

What a lot of people don't see, is that our country has a population of 20million whereas the USA has 327million.
More items can be sold for X in USA, but to sell the same item and get an equivilant $ value, we are forced to pay what we do. Plus there are customs fees, Grab Snatch and Take, and as Tony mentioned the distributors who sell to the distributor who sell to the distributor to the store, and everyone has their hand out for a share.
If everyone was to get 20%, which in all probability is under stated, of an item imported for $20+20%=$24+20%=$29+20%=$35 plus the GST $3.50, it would have to be sold for $38.50. On some smaller items, a Markup of 200-300% is the norm. I know these figures aren't correct, as I don't have a calculator handy, but you get the picture

[Luke Maddux]

Another thing to take into account is that this isn't the exact same saw. Remember, this one has a 240v motor in it, which may well be more expensive. I'm not saying it is, just that there's a chance it could be.

Also, didn't Aus institute some sort of fairly significant import tax recently? Or is that only on consumer goods being imported by the end user?

Either way, I agree that does seem like a more significant price hike than I remember when I lived there. I was used to seeing "double plus a bit" on these kind of things, not triple. It looks like it's gotten a bit worse in the past two and a half years since I left.

Have you considered buying American and putting this kind of thing into one of your containers? Maybe you could help some friends out at the same time? Just a thought, although you'd run into the motor voltage (actually frequency is more of a problem) issue if you did this.

Good luck.

[BobL]

Another thing to take into account is that this isn't the exact same saw. Remember, this one has a 240v motor in it, which may well be more expensive. I'm not saying it is, just that there's a chance it could be.

Also, didn't Aus institute some sort of fairly significant import tax recently? Or is that only on consumer goods being imported by the end user?

Either way, I agree that does seem like a more significant price hike than I remember when I lived there. I was used to seeing "double plus a bit" on these kind of things, not triple. It looks like it's gotten a bit worse in the past two and a half years since I left.

Have you considered buying American and putting this kind of thing into one of your containers? Maybe you could help some friends out at the same time? Just a thought, although you'd run into the motor voltage (actually frequency is more of a problem) issue if you did this.


The cost of 240V motors does not add to the costs as they are needed for European countries and China itself uses 240V - they are now selling a lot more of the stuff they make internally..
US prices are almost always quoted sans GST.
Frequency is not a problem for most basic motors but our 50Hz does cause them to run 20% slower than when on 60Hz.
If speed is critical for a machines operation that uses belts and pulleys this can be adjusted by using different pulleys - again a minor cost.
One type of machine on which they do nothing speed wise are dust extractors - they just swap out the motor so the DCs sun 20% slower and collect 20% less air/dust.

[A Duke]

Hi,
A 240V motor will have more copper in the coils than a 115V motor.
That could account to a Cent or two.
Regards

[Bohdan]

Hi,
A 240V motor will have more copper in the coils than a 115V motor.
That could account to a Cent or two.
Regards

Actually it will have twice the number of turns of wire but they will be half the cross section area.

So total amount of wire is the same.

[BobL]

3 phase motors will often use the exact same coils just connected in a different way.

[A Duke]

Actually it will have twice the number of turns of wire but they will be half the cross section area.

So total amount of wire is the same.


Hi,
Yes, but they will have to go through a couple more drawing processes, hence still more expensive.
Regards

[China]

What it all boils down to is tools are expensive because consumers a happy to pay the price, if consumers don't buy items because they are too expensive the price will soon drop, look what people are prepared to pay for items such as iphones
landed in Sydney at $80 each

[FenceFurniture]

Oh gawd, not this again.

I'm so bored with it.
http://www.woodworkforums.com/attachment.php?attachmentid=362985&d=1446868992

[62woollybugger]

FF, you need to use your cat more, it's getting covered in cobwebs, due to lack of use.:D

[Uncle Al]

Looks like the cat has been surfing on the web again:D

Alan...

[rwbuild]

I thought Brett's post purrfectly appropriate

[Simplicity]

I thought Brett's post purrfectly appropriate

[emoji849][emoji849][emoji849][emoji849]

[rwbuild]

Sorry Sir :-

[Baddabing]

Australia has a free trade agreement with the USA. I understand power tools may be a bit dearer due to 240v, but $100 more for a hand tool seems outrageous to me

[Chris Parks]

Australia has a free trade agreement with the USA. I understand power tools may be a bit dearer due to 240v, but $100 more for a hand tool seems outrageous to me

As one who used to use it the FTA for importing from the US only applies to anything sourced and manufactured in the US. Even if the raw material is imported and the product manufactured in the US the FTA does not apply.

[Beardy]

Australia has a free trade agreement with the USA. I understand power tools may be a bit dearer due to 240v, but $100 more for a hand tool seems outrageous to me

If the comparison was that simple I am pretty confident that the little privately owned hardware/tool stores would be undercutting Bunnings with their products and be making a healthy profit.
From what I have seen that doesn’t seem to be the case.

[DaveVman]

If you try to import something you might be staggered at all the extra fees that get added to the bill. We're inefficient and everyone pays for that inefficiency.
We are also over regulated. All those regulations translate into costs for the consumer. Our wages are very high. Our fuel excise taxes place a big cost on every aspect of our economy. Especially being a big country with a small population. I could go on but basically we are a high tax, high fee, over regulated economy and someone has to pay for all that.

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[dwcon1431]

It really annoys me that we seem to be getting ripped off big time, in Australia when it comes to the price of tools.

For example: DeWalt 10" table saw XE 745. In USA you can pick up with a stand for around US$299. https://www.lowes.com/pd/DEWALT-10-in-Carbide-Tipped-Blade-15-Amp-Portable-Table-Saw/1000465645
In Bunnings, the same saw is $949, occasionally with a stand via redemption. Our Range | The Widest Range of Tools, Lighting & Gardening Products (https://www.bunnings.com.au/dewalt-1850w-254mm-table-saw_p6260316)
Now US$299 is around A$399. Some will say freight is the killer...I say BS to that. I import around 300 containers a year from the USA and sea freight is pretty cheap, around A$5,000. I expect you would get around 16 of these saws on a pallet, 20 pallets per container = 320 saws at a cost of around A$15 per saw. So, if retailer margins are consistent across both countries, the saw should cost A$415. Where does the other $534 go? Now maybe because we run at 240 volt and the US at 110 volt, some additional cost may be in the motor. It still leaves a huge hole and someone is profiteering big time. It is pretty much the same with Bosch, Milwaukie etc across all power tools.

Now lets look and hand tools. A Stanley block plane is USA is US$36.00 or A$48.00. Lets assume freight is about $5 per plane (probably only a couple of bucks) we are up to A$53.00. Stanley Bailey 6 in. Low Angle Block Plane-12-960 - The Home Depot (https://www.homedepot.com/p/Stanley-6-in-Bailey-Low-Angle-Block-Plane-12-960/203727261). The same plane in Bunnings is A$159.00 Stanley 50 x 35mm Adjustable Block Hand Plane | Bunnings Warehouse (https://www.bunnings.com.au/stanley-50-x-35mm-adjustable-block-hand-plane_p5767091). How do we get from $53.00 to $159???? !!!

It really pees me off. We are getting ripped off unbelieveably.My guess would be that it's what the consumers will pay. If no one bought at high prices, the prices would have to come down. That's the nature of basic economics.

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[RSD]

If you try to import something you might be staggered at all the extra fees that get added to the bill. We're inefficient and everyone pays for that inefficiency.
We are also over regulated. All those regulations translate into costs for the consumer. Our wages are very high. Our fuel excise taxes place a big cost on every aspect of our economy. Especially being a big country with a small population. I could go on but basically we are a high tax, high fee, over regulated economy and someone has to pay for all that.
Australia is about the most over-regulated country in the world and we seem to be getting worse. As an example - before any model of chainsaw can be commercially imported into Australia it has to undergo emissions testing to an Australian standard. I honestly don't think that there would be enough chainsaw use hours across an entire year in Australia to really warrant the cost and effort required - but some numpty or committee of numptys has somehow been given the power to decide that it is a requirement. So who ends up ultimately paying for the testing - we do.

[Glider]

It really pees me off. We are getting ripped off unbelieveably.

Mate, you are certainly right about a few items/brands, but that's all it would be.

Firstly, U.S. prices are always advertised net of state sales taxes which average about 5.5%. Freight varies depending on inland freight to the port, and whether you're shipping full containers or consolidating with others. Don't use the published exchange rate, subtract 4% for the foreign currency buy rate so one USD will cost you $1.52 today.

You may have to pay the bill at the time of order, in which case you put up the money roughly 8 weeks ahead of receiving the goods. Customs, GST, clearance & local freight come next before you end up with a cost into the warehouse. The lead time also determines the minimum stock level so you'll end up holding a minimum of four weeks stock but almost certainly more than that. So you pay interest at around 12% on the goods for about 12+ weeks, plus warehousing etc. as well as spare parts, people to handle or repair returns, sales people to sell the stuff, store men to ship it, bean counters etc. etc.

When a retailer buys your product, you may well have to wait up to 120 days to be paid because the big guys have you by the family jewels. They're the ones who really have the power. If they discontinue your product, you end up with a lot of stock to sell elsewhere. Their specials are your specials and their advertising costs are yours.

At the end of the day, the price of any item is what the market will bear. None of us like it; but that's life in Oz. On the positive side, I reckon things saved for are better appreciated. Many of us kicked off with minimal gear and made good things with it before upgrading when we could.

mick :)

[Spyro]

LOL Wesfarmers
I think what they do is, they have their people buy huge quantities of anything they can find cheap (or force someone to sell cheap to them because they have all the power). Anything at all.
Then they give this item to an average housewife and observe what she's going to do with it. The housewife test. If she sticks it in the fridge, they sell it at Coles. If she wants to take it outside to the porch or the shed, it goes to Bunnings. She goes to kitchen/bedroom? Send it to Target. If she looks confused, Kmart.

Bunnings sold $13bn last year and made $1.6bn profit, so that's a 12% margin, which is high but not outrageous. The only problem I see with that is that Bunnings is a high volume supermarket with about zero specialisation and technical expertise, not much different than Coles. They just take what the housewife test sends to them. Then they put it on shelves and try hard to not answer your questions. They do that by running the shop with as few people as possible until you get bored of waiting and go and read the instructions yourself. That's what most Bunnings staff would do anyway. And they're honest about it, it's a warehouse, it's literally on the name of the business, they're not your woodworking consultant. So that kind of business if it had any competition whatsoever (which it doesnt because Australia), typically would make about 5% margin, not 12%. 12% is what you'd expect from a specialised low volume merchant in a technical industry, not a supermarket.

So yeah we do pay our businesses a little too much for what they offer. But most of the high prices we pay reflect decisions we consciously made decades ago. We decided to pay ourselves high wages, we floated the dollar because we didn't want to pay what it takes to peg it, and we let our businesses deal with it (which they did, and built it into the price of course), then we let the cost of land go nuts because we basically love it and couldn't help ourselves borrowing to buy more and more (and in the process made our banks the most profitable in the world) and of course our businesses built that into the price as well. And we demanded government intervention and protection when things go sideways, which of course we pay upfront for, very expensively, in taxes and overregulation.

And to be honest? On the whole, those decisions were not all terrible. Far from perfect but we could've done a lot worse.
We can still complain and finetune some of that when it goes too far, and we should. But generally I like it here, most people do. I break the law in little things pretty much every day because I hate over-regulation, but you know, you take the good with the bad. And there's plenty of good to come with it.

[Spyro]

The US market is a bad comparison. It's one of the cheapest markets in the world for a long list of reasons that we can't copy (currency, size, power and preferential commercial arrangements with most countries) and some other reasons that we don't want to copy like liberal labour laws, low wages and lack of insurance and benefits. Fk that.

Anything else that could be copied I believe we already have and maybe improved on, like beaurocracy and ease of starting a business. Maybe we could work on the over regulation a bit.

[FenceFurniture]

Yes, ignore the US market. It may not be around for too much longer in its current state anyway.

Think about the European market. Tools from there are directly compatible with Australia's electrical system. In fact tools from (say) Germany only need a change of plug and you are good to go.

Now I have imported *rather a lot* of power tools for people over the years and have done extensive research into various brands, so I know (at least knew) precisely what I'm talking about. There is a brand that this is very worthwhile for because of the extraordinary margins that are applied locally, particularly to the accessories for said tools. The tools themselves usually worked out to be 65-80% of the local cost after air freighting them in, but there were some (larger/heavier) tools that freight made uncompetitive, depending on the exchange rate at the time. There was no GST applied as the packages were always sub AUD1000 ex freight. SOme of the accessories were 25% of the local cost and the average for accessories was about 40%.

There were many many other brands like Makita, Bosch, Hitachi etc that were not worth bringing in because the local prices here were "sensible" and more or less in line with European prices. Note too that Makita is now a Germany based company, btw.

Forget all the bricks and mortar, GST, wages, blah blahdie blah excuses that are always trotted out to defend higher prices for some tools here. They are as substantial as a shoji wall in a light breeze. If Makita et al can remain competitive to the point where it's not worthwhile privately importing them, then so can the greedy brand(s). It really is as simple as that.

Makita et al don't seem to feel the need for making illegal retail price maintenance exclusively legal either, funnily enough. :ranting2:

[RSD]

Yes, ignore the US market. It may not be around for too much longer in its current state anyway.
they certainly aren't heading in the right direction at the moment...


Now I have imported *rather a lot* of power tools for people over the years and have done extensive research into various brands, so I know (at least knew) precisely what I'm talking about. There is a brand that this is very worthwhile for because of the extraordinary margins that are applied locally, particularly to the accessories for said tools. The tools themselves usually worked out to be 65-80% of the local cost after air freighting them in, but there were some (larger/heavier) tools that freight made uncompetitive, depending on the exchange rate at the time. There was no GST applied as the packages were always sub AUD1000 ex freight. SOme of the accessories were 25% of the local cost and the average for accessories was about 40%.
For us newbies - is that the one that starts with F and has 7 letters?

[Beardy]

Why aren’t some of the other high end brands represented here in Australia and getting in on the action of ripping us Aussies off and making their fortune? :?

[RSD]

Why aren’t some of the other high end brands represented here in Australia and getting in on the action of ripping us Aussies off and making their fortune? :?
Our market isn't really big enough for most brands to set themselves up here and so they need to find/be found by an importer/distributor.

[Beardy]

Our market isn't really big enough for most brands to set themselves up here and so they need to find/be found by an importer/distributor.

And of course that would have nothing to do with the potential disparity of pricing when one of these niche product companies does setup camp here with reps on the road offering free onsite product demonstrations, an Australia wide network of retailers stocked with their product and an after sales support and repair service.
I wonder where the money comes from to pay for that?

[Glider]

Does anyone know how it all works in Noo Zulland?

mick

[elanjacobs]

My guess would be that it's what the consumers will pay. If no one bought at high prices, the prices would have to come down. That's the nature of basic economics.

Sent from my SM-T580 using Tapatalk
Oh gawd did you really have to re-open this? It was quite happily dead for over a year and now we gotta go through it all over again :doh:

[Spyro]

Is there anything cheap in Australia?
At some point I imported kangaroo leather from the US cheaper than the shop in Melbourne, explain that to me.
Poor roo went around the globe post mortem for no reason other than humans being weird.

[allfix]

Oh gawd did you really have to re-open this? It was quite happily dead for over a year and now we gotta go through it all over again :doh:

Most of these threads are full of comments like yours which don't have any useful content so it's frustrating to read through the entire posts in search for a useful information, please only replay if you got informative content or opinions.
Regarding the topic, I do agree that the products' prices go crazily up parallel with high demand but they will go down when there is little demand.
I always remember what an "uneducated" marketing teacher said to me that marketing is the study for understanding what people want to buy while I argued with her that marketing is the art of selling stuff people don't really need.
And we in Australia all know that we live in a BIG island where most of the stuff came from overseas unless we produce it.
I often see stuff listed in US or UK (for example) cheaper than what we pay in Australia while the same identical stuff is made in China from the same brand.
Delivery is another issue because I often see that it's cheaper to ship the same item from China to the US but it would be more expensive to ship to Australia even so we are closer to China.
People talked about US wages being lower than Australia and that doesn't make sense to me because you need to do a full overview between two nations.
And lets look at our AUD which in these last 10 years has became less than valuable.
Many of you guys buy from overseas and you know how "painful" is the exchange right now, 10 years ago I could buy something on eBay listed for US100 and only pay AUD95 while now I pay AUD130-140 for the same item listed for US100, also add carriers' fees listed in USD to be converted to AUD.
Then we have the new compulsory 10% GST on imported goods and you we'll see that Australians are being ripped off.

[elanjacobs]

Most of these threads are full of comments like yours which don't have any useful content so it's frustrating to read through the entire posts in search for a useful information, please only replay if you got informative content or opinions.
Yes, because we're all sick to death of seeing the same question and the same answers being done over and over again. Nothing you've said hasn't already been said by someone else, either in this thread or in another one just like it. It's tedious, it's pointless and it's not going to change anything.

[allfix]

we're all sick to death of seeing the same question and the same answers being done over and over again
You do not represent all forum users nor you're obliged to go through these questions.

I've found this thread quite interesting and I'll keep on adding information so my question is why do you keep posting non informative content here if this thread bothers you to death?

[doug3030]

You do not represent all forum users nor you're obliged to go through these questions.

I've found this thread quite interesting and I'll keep on adding information so my question is why do you keep posting non informative content here if this thread bothers you to death?

Were you looking in a mirror when you typed that?

[Lappa]

First the postage thread now this one :doh:

[doug3030]

allfix has not made any friends yet

Doesn't surprise me :rolleyes:

[justonething]

First the postage thread now this one :doh:

Lockdown rage

[poundy]

I kinda feel bad for the postal rampage, but not really... but at least I can say here that I didn't click no "report to admins" like I may have been accused of :U