US built power tools...my insane dream.

[HardDrive]

For the past couple years, I have had this crazy dream floating around in my head of starting a company that makes US made power tools. 100% US made. Not a screw, motor, piece of marketing material....none of it foreign made.

I remember my grandfathers craftsman powertools. Beautiful forged aluminum chassis, lasted for decades. I still have a US made craftsman 3/8 drill from the late 80s that works like a champ.

Even if they were twice the price, isn't there a market out there for folks willing to buy a quality US made tool? Or is this mythical market segment just a unicorn?

Would such a company be viable if you assumed extremely low production numbers from the outset, and priced accordingly?

Has the Laphroaig quarter cask gone to my head?

[porsche4life]

Yes it has in fact. I mean some people would pay extra for that but not enough. Your production costs would be astronomical to find electronic parts not made in asia. I mean there are some very well made foreign power tools and it would be hard to compete with those prices making things in small quantity in the USA.

[Gogar]

I love your idea, but I can't pay $1299.99 for a 3/8" drill, even if it is forged aluminium.

[Esel Mann]

Some thoughts,

- Yes folks would be willing to pay 2x, but certain conditions apply. Not sure exactly what you are making or desire to make but, either you demonstrate your tool allows the user to do XYZ quicker, or what is currently out there needs to be absolute crap or, or the tool is simply not available or no longer available. When I say crap I mean crap and not opinions. As in the tool simply will not do as advertised or only lasts for a very, very limited timespan.

- Can you perhaps make the case for a niche market? Power tools is very broad in scope. Niche markets are where a small operation can potentially survive. Too many headaches for the big boys.

- Have you toured the factory of any tool makers here in the U.S.? Or perhaps already have tool making experience? Where the experience is around medium to high volumes? If not, I suggest you do. It will be a sobering experience. Reason being everything is highly automated these days. Even used equipment can lead to $$$$. You will need to stockpile $$$ as you will be spending it, long before any $$$ comes in.


All this aside, you have a hankering that is entrepreneural. Kudos to you! Explore it! But do your homework up front before plunking down any $$$. And be sure that whatever you embark upon you are in a position where you do not need any $$$ from the operation to live off from anytime soon (this is a trap many fall into).


Yes, one can still manufacture in the U.S. However one must smart about it, tenacious, and willing to delay instant gratification.


Best wishes fellow entrepreneur! And remember the only person who will stand by you is you. You must be the champion of your goals and desires. No one else is willing to take the risk.


Regards,
Carlton

[HardDrive]

Originally Posted by Gogar

I love your idea, but I can't pay $1299.99 for a 3/8" drill, even if it is forged aluminium.

Can you pay $250 if it comes with an 'absolutely no BS, we fix it for life' guarantee?

[941MXVET]

Originally Posted by HardDrive

Can you pay $250 if it comes with an 'absolutely no BS, we fix it for life' guarantee?

I probably would. I think you'll have issues keeping your price that low though.

Something to think about; Years ago there were craftsman who purchased a tool to use for their entire career, today many construction techniques, and materials change on a regular basis, thus requiring different tools for the job every couple years. I've been in the electrical field since 1988, and have seen many 'must have' tools come and go.

[red-beard]

If the government will buy a $600 toilet seat, it can afford $2500 for a USA made power tool. Make sure than your congress critter includes a line in the next bill, that the stimulus must, along with USA union workers, and USA Steel, that power tools, construction equipment, etc, used in the stimulus, must be USA made.

[Gogar]

Originally Posted by HardDrive

Can you pay $250 if it comes with an 'absolutely no BS, we fix it for life' guarantee?

I suppose I would if I were a skilled craftsman drillin' a lot. Milwaukee warrantees are only 5 years.

[red-beard]

I bought a Sawzall from Sears, and for a few bucks bought a lifetime warranty.

[porsche4life]

Originally Posted by red-beard

I bought a Sawzall from Sears, and for a few bucks bought a lifetime warranty.

For awhile Rigid offered a free lifetime warranty on all cordless products including batteries. My dad took them up on that offer and I have to say I am pretty impressed with the 24v Li-ion stuff.

[m21sniper]

Originally Posted by HardDrive

Can you pay $250 if it comes with an 'absolutely no BS, we fix it for life' guarantee?

I don't think you could make that offer and be profitable.

[Jim Bremner]

Originally Posted by red-beard

If the government will buy a $600 toilet seat, it can afford $2500 for a USA made power tool. Make sure than your congress critter includes a line in the next bill, that the stimulus must, along with USA union workers, and USA Steel, that power tools, construction equipment, etc, used in the stimulus, must be USA made.

Red Beard. I worked for a couple of the guys that made the $1,100 coffee maker for the airforce. It needed to survive a 20g crash, within 5 minutes it needed to brew a pot in less than 1 minute. Every 5 minutes after that it needed to brew another pot in less than 2 minutes. it couldn't weight more than SX and needed to be smaller than Y but the kicker was that they only needed 200 of them EVER

some strerno fuel and some instant coffee would have been smarter.


I've had a few fixed gear cogs made here and am trying to have more items produced here.

[Esel Mann]

$250.00 would entirely depend upon what it is and what you in the end claim it to do. Furthermore before a pricetag is assigned, one needs to know what their cost(s) are to manufacture such tool(s). Setting the sellable price of a product is part art, part, science, and part snake-oil.

While your lifetime no BS guarantee is a noble one, is it the correct one? For example, if I understand you, your product(s) are built like brick ****houses. Thus they should never fail. However not if but when, how is your company going to handle it. Imagine the end-user. Your product breaks, they are on a critical job where time is everything. They don't have the time to do the whole go down to the store and exchange it (presuming of course the store has one in stock). Or the end-user is on a job in a remote location. How are you going to honor the guarantee in such a way that the end-user is in no way put in a pickle? We're not talking about many end-users here. You cannot afford to loose any of them due to bad experience(s) with the product.

The guarantee part of any product is no straight forward claim. There is much thought and science behind it. Many a company has been dealt a good punch, some brought to their knees because of the guarantee assigned for their product(s). If I recall correctly, though I can't remember where I saw it, Sears has brought many a tool maker to their knees because of the guarantee (which they hold the tool maker to) on the Craftsman series hand tools.


Please don't take the above as discouragement. I am merely pointing out things that need to be addressed. This is all part of the process. Keep working your idea. It will be worth it!

[red-beard]

Actually, if this is a serious design project, setting the price and the profit, along with all of the feature, i.e. a market study, is extremely important before you try to design something. Profitable engineering is "design to cost".

[jyl]

Wow, seems like $1100 was a good price for such a magnificent device.

Red Beard. I worked for a couple of the guys that made the $1,100 coffee maker for the airforce. It needed to survive a 20g crash, within 5 minutes it needed to brew a pot in less than 1 minute. Every 5 minutes after that it needed to brew another pot in less than 2 minutes. it couldn't weight more than SX and needed to be smaller than Y but the kicker was that they only needed 200 of them EVER

What was the application that required such a coffee maker? What military vehicle was expected to have a 20g crash that would leave occupants ravenous for coffee within 2 minutes or else?

[MotoSook]

Reminds me of the scene from the movie "Outsourced" when an American calls the order center in India and was angry that he was buying and American Eagle figurine made overseas and being sold through an Indian sales rep.

The rep kindly said she was sorry things were the way they are, but that she'd be happy to provide information to a company that sells the exact same figurine made in the USA and sold in the USA for something like 10% more.

The caller calmed down and ordered the figurine through the India rep.

(That's loosely what I recall of the scene)


Making all American tools may be difficult since a lot of the smaller parts to assemble your tools wil be difficult to source in-shore. Anyone know what percentage of Craftsman or Sears tool is made off-shore? I think you'd be surprised.

I know of a large $ product which was "Made In Canada" and purchased bought for a multi-million dollar project. It said so on a very large name plate rivoted to the product. Within days of being in service, the product cracked and could have caused a major accident. Further investigation revealed the casting was made in China and the Canadian company fluffed the paper work since it was really assembled in Canada. I can't imagine the dollars that would have been paid to the end user if there had been a major accident.

Besides the material issues...you'll have labor cost issues with the unions. You'll never get costs down enough to make a product that makes any sense to a large enough group of patriotic buyers.

I'm all for keeping jobs from going overseas and I'm all for quality....but the manufacturing environment in the USA just is too extreme.

[jyl]

Okay, I can buy an 18v LiON Makita cordless drill-driver for $250. Not sure where it is made (some Makita is made in USA, other in Asia, Mexico, etc) but it is a quality, durable, reliable piece of equipment.

If it were 90% made in USA, I'd pay an additional $50. Impossible to be 100% made in USA, at least the LiON battery and electronics will have to be sourced overseas. If it had a really long warranty, 10+ years, and some way to register it online so I didn't have to keep the receipt, I'd pay an additional $20. If it were very cool looking - polished aluminium casing, etc - $50 more. I personally wouldn't pay above $400. It would be nice if the metal casing didn't electrocute me.

I think there are some expensive brands of German-made power tools that have survived. So there is probably a business model somewhere.

You'd probably want to sell these direct, with a really good website that draws people into the "made in USA" story, pics of the proud war veterans and attractive blond women who would make the tools, a forum community, etc. Get publicity through tool and remodeling magazines and websites, internet geek and man toy sites, places where nationalism runs rampant (gun forums etc), etc. Going through a conventional retailer would be hopeless. The tool would need a distinctive look - polished metal casing would work - and logo.

Would be worth finding out the cost of power tools to the retailer. Off the top of my head, I'd guess Home Depot makes 20-25% gross margin on power tools.

[Schumi]

I had one of those black and decker drills from the 1950's around my house for years. All aluminum casing, heavy, durable, never once had a problem with it. Made 100% in the USA. Unfortunately it had one fatal flaw; if you used it in the summer when your hands got really sweaty and you pushed on the top of it for leverage while drilling, you would inevitably get the %&#$ shocked out of you. This is probably one of the reasons they A) ground things and B) make them out of plastic now.



Things like a nice set of drill bits are things I pay for the quality because I know I'm going to use them forever. Unfortunately, in that respect, I could always go out and buy a set of Bosch drill bits and drill, and have quality that couldn't be exceeded here in the US most likely. I mean, it's made in Germany, you know the Germans always make good stuff.

[cgarr]

They will last too long so you loose all the repeat customers. unless its a union shop.

[red-beard]

This reminds me of the Denver Convention. They were trying to get items made that were:

Made in the USA
Union Made
Green

They could never get all three.