The sky is falling, run qiuck

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OK it is not that bad, but I did get a mailer from my local Woodcraft today. They are closing their doors. :(

Now on top of saving up for a new tablesaw, I have to figure in for extra gas money. Will the madness never end?
 
75% off August 1st. I was just there the other day and noticed stock was low. What they will have left by next Monday won't be much. And finals start next Monday, so I will miss out.
 
Had the same thing happen here, with added effect that I lost my job. (worked there)

Your feelings hit home with me. Since the stores ARE Franchises, they have to stand on their own. Our location had a GOOD variety of tools and the other things needed to support woodworkers.

Our problem was that some customers would only come in for sales and also came in to look around, but bought off the internet to save the sales taxes.

For the last two years, our owner poured money into the business, to keep the doors open. Finally, he decided to cut his losses. There were two stores in town. The other is more into flooring, so the inventory mix is different; meaning that we have to spend more on the internet, to be able to get what we needed.

My belief is that we Have to Support our local businesses, or it will be like frontier days, where you sent away for everything and got No local support.

One of the last things that happened really had my head spining. Our shop work rate was $35.00 per hour. (Planning, sanding,custom work, etc. for small jobs, we do them free, for our customers) I got a call from a guy that wanted 200 8' oak boards planed and sized. I told him our rate and he went ballistic. I asked him if he had bought the wood from us and he said no, our price was a nickel high per bd/ft. I broke a cardinal rule of mine. "Is the bad press he will spread around worth it. Usually the answer is NO!

But since I already knew we were closing in two weeks, I said to my self - Heck Yes - and said, take it back to where you bought it, to which he replyed. "They don't offer that service."

Sorry for your loss.

Bruce
 
Although I found the Woodcraft in Allentown to be a bunch of swell fella's and helpful, its lack of inventory was a dissapointment.
But I dont blame them.
I went there for a Router, and some bessey clamps.
They didnt have anything I wanted.
It really makes no sense since I can get it online from woodcraft and wait for a shipping special.
I dont blame the owners for closing, they cant be expected to stock every new item and every old item, there are just too many of them.
The only way I see Woodcraft retailers making it, is by becoming a catalog type of store. Where they are given one of everything, and it can be touched and played with by all who are interested, then ordered and shipped to home.
The sales people can help make decisions using their experience and combining it with the needs of the customer.
 
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Bruce, when I went in, I carried something out. Small or large. I really didn't want that store to go. People need to understand, if the little guy can't make some profit, he won't be there when you need him. Now mine is gone.

Rich, that was actually a thought. I talked to a guy that could have funded it, but the distance from our houses, plus others nixed the deal.
 
I think the stores are a good idea, yet hard to compete with the parent company's catalog. I loved the concept, it is where I went to learn to turn my first pen. Look at the trouble that has created for this ole world!!!! I felt bad for my guy, he cashed in his retirement for his store and so I assume, his going under meant he lost his retirement and is back at the grind. He ran a good store, but the economy ate a lot of businesses. :(
 
The guys that had the franchise here went independent and opened up their own store. The big problem I think they had was being able to get access to some of the products they used to sell. I.e. distributor type agreements and such are much easier for a company like WC, than for a small independent.

I try and visit them once a month, but there really isn't that much I need, and they really don't have that great of prices... It's got to be tough to be in that situation....
 
My personal feelings about woodcraft has been that, yeah they are A version of the big box stores for woodworking. Although I do purchase from them from time to time, it is usually when I can't find it anywhere else. I usually find them to be higher in price than I can get elsewhere.
If they were within a half hour to 45 minute ride for me I may think a little different just because of the convenience factor but that's it.
We used to have a Woodworker's Warehouse which later was bought up by Western Tool here and their prices were always competitive and mostly reasonable. Western Tool pulled out of the east coast and we dont have anything like it to fill the gap so I have found many suppliers that I deal with consistently online. Some are small businesses just like I would find here if there was enough of a demand. These are people I am on a first name basis with just from dealing with them over the internet. For me, I find this to be just as good if not better than driving to a store. If I plan accordingly I can place an order with them when I have free time, know it is going to be to me within the week, and go about my day. So for me I feel more productive this way and when I factor in the time I wouldnt be working because I had to drive to the supplier, find what I needed then drive back and get back in gear the 10 or 15 bucks in shipping is actually a savings. Many times a big savings.
And I have received excellent service from these folks, so I keep going back to them. There have also been times when I couldn't find what I needed and have been able to send one of these folks an email describing what I needed and if they knew where I could find whatever widget or jig and again they have been more than helpful.

Steve it's too bad you couldn't make it work, but, yeah one heckuva nut to crack everymonth if you have to carry that much inventory. What you need is someone that can set up a small store, carry what is needed to support the woodworkers in your area, a few machines on hand and special order the rest. Most suppliers will set up "stocking dealer" programs that allow store owners to not have to outlay large amounts of capital to just have it sitting there collecting dust. And with our present economy, suppliers are becomming quite flexible with the little guy as I'm sure the big guys are starting to make them nervous by not meeting their projections!
 
Apologies for the long reply (two parts due to character restrictions)

For what its worth I don’t think this is a phenomenon restricted to Woodcraft.

Here are my reasons

1) The general consumer is tapped out. Disposable or discretionary cash spending habits and priorities are dramatically changing and will continue to do so for some time to come. The boomers have woken up after the crash to the volatility of the market and their own debt along with definite pending real retirement. There are too many areas where there discretionary funds are needed. Grandkids, medical, retirement home, and extended lifespan realities. At the same time there is downward pressure on wages in North America as competition with the rest of the worlds low wages strikes home.
We also all face pending inflation with high interest rates as an after effect of the financial collapse.
2) The franchise model where the principle is able to host a catalog mail order site as in the case of woodcraft, is doomed in my view. You have the principle using the store as a means of relationship development and brand presence and awareness, tapping into the store on royalties, yet restricting purchasing to what Head office determines is the best deal for them. Think of the chaos this causes at the store. Overnight inventory can become end of line as the HQ switches from one brand of say clamps to another. The store is now required to stock and order the new line while still trying to carry and dispose of the old at a lower margin.
3) As others have said choice. Impossible for the store to stock all the range in quantities. Therefore if you going to have to go into the store and order well you might as well do it online. Either you or the store owner is going to eat getting it to you after you placed an in store order.
4) Relationship ownership. Once the HQ has had you order from the site they know you a woodworker and have you in the database. They can entice and solicit orders from you directly through their highly promotional advertising email blasts that cost them nothing. In the old days it would have cost them postage. Now they can do it with frequency and by us going through the web they even get response rates and demand frequency etc.
5) There is a growing trend towards zero stock which has been on the rise since the beginning of the Just in time manufacturing trend. What is happening now is fulfillment is not necessary coming from the Woodcraft warehouse. Many industries have already moved to a ex factory warehouse fulfillment approach. Meaning you could order two or three items which originate from different suppliers and have perhaps three parcels arrive. One may be actually from woodcraft due to their stocking the actual item because of the kind of distribution deal they could leverage. The other two direct from the manufacturers principle warehouse merchandising company. Its all about taking cost out of the distribution chain. Grizzly saw this coming donkeys years ago. I admire them they got probably the slickest operation.
6) The price at the local store can only do one thing. Go up. Its only the franchise which restricts that at present. But for the future this model will have to fall by the wayside. The local store has to become a place of convenience shopping just like the local convenience store where you pay extra for the convenience of being able to get it there and then.
7) Take a look at the recent profits posted by UPS and other courier companies. There is no slicker operation in the entire world than the operations of FedEx and UPS. These are University Case studies in how to run and manage and organization. Their volumes in parcels keep going up as the internet shopping trend continues.
8) The retail store property owner inevitably an investor in property definitely has a mortgage on that property. As rates rise and common area costs rise (maintenance and utilities and cleaning etc) rents will have to rise. There is no where else the investor can recoup these costs other than to pass it on to the tenant and the tenant will find either he has to do greater volumes at existing margins to survive or increase price for being in existence and convenience.
9) The store also has exposure to increases in product cost. At present product coming out of China is increasing in price. Sounds strange but a fact there are many factors causing this I wont go into them here.
10 ) The store also has the cost of manpower to serve you. Regardless of what we might think of these store peoples knowledge or ability they are still there and cost money. When you shop on the internet you do all the work and talk to no one. Remember that. So if you a person that needs affirmation from someone else to make a purchase you are going to pay for that luxury in future.
11) Then the poor store owner has inventory carrying costs. Sales and promotional events held just to move goods don’t make life easy for them as we cherry pick these sales. That does not bring in high gross contribution and this is what is needed to fund all the costs.
12) You only have to read the posts we have on our forum about how use of the car has changed specifically for more rural or distant communities given the gas price. That run to the store 60 miles away is now not an impulse decision. But a buy online can be.

So all you can see for this poor guy is rising costs lower sales volumes and even less contribution to cover the overheads while growing liability in terms of line of credit all in the hope that tomorrow it will bounce back.

Just as the arrival of the big mass discounters took its toll on main street shopping in the small towns so too will this trend eat up the local retail stores. There is huge change in the wind especially as there is even a significant move towards banking and purchasing now on a mobile platform like your Ipad or smartphone.

I am sure there are members here that remember the very first emergence of the mail order catalogs and the convenience that brought. At the time that took place it boosted purchases at both levels store and catalog. It even created opportunity for a local pick up agent in the small towns with shipping being consolidated to the agent cutting shipping costs at the time.

You can see that trend in the serious corporate chains that have a strategy to deal with this.
Take Lee Valley. They own their own stores. They have facilitated a means to order online, be notified of your order being ready and drive by the store and pick it up at a separate entrance where there is no line up.
Best Buy in Canada doing the same so is Sears etc. The key here is once again convenience. To me it’s a good mix and I think a chain like woodcraft should be looking to acquire some of the stores which they probably are doing behind the scenes at the ones they already know do a good volume and offer this service. But it would eat into their profits so why do it. My personal view is they have their eyes set on bigger markets. Online permits them to take their brand offshore. Tapping into the foreign market and private labeling middle ground products still made in China like the line of Woodriver planes. ( I die before I buy one just so you know where my allegiance stands)
Bare in mind any external sale can be performed at a lower cost which may mean they eat or subsidize shipping costs to get that market share. Market share will mean greater volumes meaning extra bargaining power when they buy, market share will add more to gross contribution which as I have mentioned before (the term marginal cost) everything drops to the bottom line. So where would you focus if you were woodcraft.?
On saving the local store, or going international with your brand.
With their volumes and consequential price they can penetrate markets that before were way to small by comparison to looking at the USA population and economic purchasing power.
In the past for a retailer corporate type chain to enter a market (even a neighbor like Canada) they need to be opening at a absolute minimum 5 to 10 stores in one go. That’s a huge chunk of sunk capital for future sales to return. Now they can sell over the border on a one by one basis with no cost they already have the computer system and its being paid for by the existing market volumes.
This my friends is a function of the WTO bring down international duties allowing market access.

If you wish to sell your wares you need to think global now. There is only one world not just the local market. He who does not get on this bandwagon and start to learn to market internationally and sell across the world and carve out a niche well they going to feel the heat in my view.
 
Reply continued

So Steve I like you feel the pain. I grew up working in a real hardware store. We carried everything from obscure to specialist and mass demand products. But then in my past country they allowed the grocery store to stock paint, then stock other bits and pieces and before we knew it they were killing the lines that were profitable with discounting because of their buying power. But they did not cut glass or offer mixed birdseed at the time. They did not have advice on the weedkiller to use for your vegetable garden.
We should have stopped it then in my view. But that’s just nostalgia speaking. I still try where possible to support my local hardware store owner in the midst of the orange borg but realities are causing me to dislike both of them.
 
Rob, you make a good point about the world. I have older relatives that just don't get how small the world is. The "Net" has shrunk the world to marble size. With the click of a button, I can communicate to just about anyone in the world.
 
I'm lucky to have the woodsmith store here locally. I know they are were struggling but I was told things are going well now. There inventory is pretty large but many bigger ticket items they only have the floor models or maybe 1 other in stock. When they get good deals from a manufacturer on equipment they buy BIG quanities and pass the savings on to the customer and move the product quickly. The building also houses the customer service dept for the 4 magazines the parent company publishes and that company has pretty deep pockets. (so I've been told)
 
My local WC closed a few months back. The owners said business was great, they were just tired of it. (they own another WC 1.5hrs away from here). I felt sorry for the guys working there. They were mostly old dudes (kindred spirits) and needed to stretch their retirement.

The pay didn't seem that great. One worker moved to Home Despot and said HD payed more starting than WC did after he worked there 5 years!

I didn't shop there a lot. It was pricy. I do miss the convenience. Now I actually have to plan ahead!
 
Sometimes I think the current sales tax model here dooms the small local stores. It's extremely hard to compete with someone that doesn't have to pay 9% sales tax like we do locally. It's really uncommon now days for a store to not be able to ship an item for under 9% of the total sale, and internet stores have less overhead/unlimited market to sell to.

The ones I see doing well typically have some type of protected product line, comercial sales, or offer convenient service (ace hardware for example) It's not just the mom and pop stores, circuit city, blockbuster, movie gallery, and others are struggling from internet business competition.
 
I used to live where we had a couple of local run woodworking/tool supply houses... both of whom went out of business, oh, and one tool distributor who is still in business, but who really deals mostly with contractors, have to know what you want, very little 'customer service' involved there... he can get it, but you dont' get your hand held.

Accordingly, I've dealt mostly with the internet portals, woodcraft, rockler et al... and only occasionally made special trips or detours from other trips to visit the brick and mortar locations (allentown, rochester, buffalo NY Woodcrafts). I must say, the B&M stores all were well stocked, had friendly knowlegeable staffs, but there wasn't enough for me to make a special trip all that often. I've learned more from you guys online about tool selection than I ever would get from the store clerks given the limited amt of time I had on site when I went there.

SO... I suppose my point is, unfortunate, sorry you are losing the local guy, but tool purchases can be done from the internet.
 
I really like going into a WoodCraft store... they are fun places to look around, but I do find the stores to be a little on the high side pricing wise... I'm on SS so money is usually tight... I try to make all my purchases from monies made from selling my turnings... else I wait until I do have monies... plus it's about 50 miles from my house to the store so it's almost more economical for me to shop on line.

So far, looks like the Knoxville store is still strong... may be hurt some this summer, the shopping center they are in is being renovated and given a new face lift... so when I was there yesterday their class room was all boarded up... still open, but the front was boarded up in prep for the renovation.
 
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