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What is going on with Milwaukee pricing?


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Man, every time I look at Milwaukee, the prices keep going up.

They are officially more expensive than Hilti now.

I am in Canada so I am assuming it’s worse in the US.

 

Looking at Hilti 22v, the bare impact is $169. The Milwaukee Fuel M18 equivalent is $199.

 

I was looking for some 12v compact stuff and the M12 Fuel impact / hammer drill combo was $299 CAD, with 1x 2.0 and 1x 4.0 battery.

I got the Hilti 12v Impact, hammer drill, light and recip saw for $420, with 2x 4.0 batteries.

 

The Hilti 22v rotary hammer is $349 CAD, the Milwaukee Fuel M18 is $379 CAD.

 

What the hell?

I get Milwaukee is popular, but they aren’t worth that much.

Hilti warranty still decimates theirs.

 

I guess they are trying to make up for all the free shit they have given away over the years!

 

 

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I think generally speaking hilti is still more expensive in the US than milwaukee.  I think about a year ago the tariff war here caused or allowed both dewalt and milwaukee to increase pricing by about 10%.  The other thing I've noticed is about the time of their marketing launch of "22v" tools, hilti has become much more price competitive.  There's still a bit of a premium but it's gotten close enough I've seriously considered buying a set.

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My Milwaukee contacts have told me it’s because of the recent tariffs. Your going to see a lot companies moving out of China including Milwaukee. 


I’m confused. Shouldn’t Milwaukee tools be made in, well, you know...?

Kind of like how most Aoex Tool Group stuff is made in the Carolinas because uh Apex is in North Carolina.

Otherwise it would be Beijing Tool, right?


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5 hours ago, paulengr said:

 


I’m confused. Shouldn’t Milwaukee tools be made in, well, you know...?

Kind of like how most Aoex Tool Group stuff is made in the Carolinas because uh Apex is in North Carolina.

Otherwise it would be Beijing Tool, right?


Sent from my iPhone using Tapatalk

 

 

You’d think buyers might pick up on the geographical discrepancy not only in location of production but also in ownership and maybe detach any nationalistically-motivated fanboyism for such brands. Then again, maybe not.

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I’m confused. Shouldn’t Milwaukee tools be made in, well, you know...?

Kind of like how most Aoex Tool Group stuff is made in the Carolinas because uh Apex is in North Carolina.

Otherwise it would be Beijing Tool, right?


Sent from my iPhone using Tapatalk


Most of Apex Tools have been outsourced to China and Taiwan, I beleive one of their last true American brands was starting to wind down US operations about a year ago.


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Price wins for 98% of consumers, and manufacturing costs win for 99% of companies. 

 

I don't know about where you guys are but if a drill was made here in Australia it would cost $500 retail to purchase with our labour costs and taxes. I don't see tariffs working that quickly, not yet anyhow.

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Manufacturing and consumers in the states are a mixed bag or Milwaukee would be out of business.

In a true free market such as commodities with no competitive advantage it is purely a supply and demand game. This is great for consumers because nobody makes any money and the price is as low as possible. It is awful for manufacturers though because they will have maybe 2-3% margins at best when the stock markets demand at least 10% or better. They will soon be out of business. That is where a lot of Asian tool brands are at and what you see all over ebay and Amazon. They pop up and disappear for a reason.

What you want/need as a manufacturer is a competitive advantage. You have to sell your name and reputation, superior product, better customer support, something. This is the opposite of a free market.

Lower prices only works long term as long as somehow nobody else can beat you on manufacturing costs. There has to be a reason and it has to be some kind of natural geographical feature that cannot be duplicated. Otherwise that is strictly a short term game. This is why Australia beats the world when it comes to delivered price for coal and iron to China...shipping cost advantages being “next door”, even though those are commodities. Australia is home to BHP for a reason and BHP is the largest mining company in the world.

Premium tools are an oligopoly. The market is dominated by a small number of competitors. In that market we get Sweezys kinked demand model. Prices are set by watching each other. If you lower prices so do your competitors and everyone loses money instead of picking up market share. If you raise prices the competitors let you and you lose market share. This keeps prices in line. Occasionally competitors will run sales or threaten a price increase and test the water to see if the competitors will follow. Or something happens to raise or lower costs and then everyone tends to go up or down until they all settle down again. It may appear to be a free market but in reality it is right on the edge between a true free market and an unfree one.

Hence as s consumer you can see how free markets keep everyone honest and the system is as fair as possible. As a manufacturer the goal is to constantly find new ways to “beat the system” to make more money. I’ve worked for years on the engineering side of things. I am really good at lean manufacturing... finding ways to reduce costs. But I have never, ever seen a company cost reduce themselves into profitability. That is the sirens call of lean manufacturing but it is an illusion. Again your competitors will just follow your lead. My competitors can’t hide their secrets from me for long and vice versa. It is a big financial benefit and worthwhile to improve manufacturing but to make large margins you have to have a competitive advantage, some new technology or something.

Cost reduction alone is a proven failure. Harvard MBAs have been pushing this idea of squeezing every last drop of profit out of everything across the world and they have absolutely nothing to show for it but the dried up husks of once powerful and innovative companies they left behind them. When these locusts move in the first thing they do is get rid of all “extra” costs. Not just wages and benefits. They also dump or strip R&D, all new product development, all customer support, and strip sales down to a web site. They grind down and remove every spare clerk, foreman, you name it. They infest the company with low paid cheap staff that either can’t or have no interest in product quality. They get rid of accessories and add on products or price them off the market. After a few rounds of this the company is sold off or deemed unprofitable and goes bankrupt. They even call themselves manufacturing efficiency consultants. There is some good in all of it but largely it’s a scam. Ever heard of Engelhard, Griffin Pipe, or Dravo? Those are ones I worked at. Or the king if them all, GE? All eaten by Harvard locusts.

So I understand your attitude that price rules everything. Price is very important but if it is all that matters then both the manufacturer and the consumer eventually lose.

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