Did you notice that you can’t buy many Milwaukee power tools directly from Amazon? Back in November a contact for a major online distributor told us that Milwaukee tools decided to cut off Amazon completely from selling any of their tools.
At the time I thought maybe that Amazon wouldn’t sign a MAP agreement and that’s why they were cut off. This has happened before, most notably with PB Swiss tools.
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A couple of weeks ago Orchard Supply Hardware, a chain of California-based home improvement stores, filed suit against Home Depot, Milwaukee, and Makita for creating an illegal boycott. Apparently Ace hardware’s 4,000 stores are also being locked out of buying and selling Milwaukee and Makita power tools. (Source, and antitrust case number 3:2012cv06361.)
Walk into any Home Depot, Lowes, or Sears stores and you will quickly see that each retailer excludes different brands from their shelves. Exclusivity agreements aren’t a new development.
Such a strict exclusivity arrangement is a great business move on Home Depot’s part, as long as it’s not deemed illegal by the court. But such an arrangement is bad for consumers. Milwaukee tools are popular, Makita tools as well but seemingly less so, and the arrangement should help funnel more customers to Home Depot. There must be some juicy incentives for Milwaukee and Makita for them to have agreed to such an arrangement.
I for one am frustrated that I can no longer purchase Milwaukee tools directly from Amazon. As I publicly responded to an email from Home Depot.com’s corporate team, I strongly prefer buying tools from Amazon over Home Depot, even if I’m not saving any money. If I lived in California, I would probably be even more frustrated to see Milwaukee and Makita tools absent from OSH stores as well.
It will be interesting to see how this all plays out. The suit was filed alleging that Home Depot, Milwaukee, and Makita are violating Title 15 Section 1 of United States Code (Sherman Antitrust Act):
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. (Source)
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According to the Wikipedia, a [Title 15] Section 1 violation has three elements: 1) an agreement 2) which unreasonably restrains competition 3) and which affects interstate commerce.
Sources and References:
Courthouse News Service
Fast Company
Justia Dockets & Filings
Cornell Legal Information Institute
US Code
Wikipedia: Sherman Antitrust Act, Title 15 of United States Code
fred
For commercial use – my tool buying has mostly been through a local dealer who provided fair (albeit not the absolute lowest) prices and professionally services what they sell – with a well-stocked shop and good turnaround time. These sorts of distributors have become fewer and farther between – but worth finding if you rely on tools for your livelihood. Once in a while – we had a crew that’s stuck and needs to buy from one of the more-local big boxes – which is OK – and sure beats the “good old days” when local hardware stores had few (if any) professional tools in stock – and high prices to boot. We did have an experience where a tool being offered at the big box – was an obvious used return – with a new tool price.
Now – in this new year – that I’m semi-retired, I’m still thinking about buying a few tools for my woodworking avocation – and having more (rather than fewer) online shopping choices was something I was looking forward to. In fact the Makita plane that I was contemplating seems to still be on offer at Amazon:
http://www.amazon.com/dp/B000I0XNN8/
at what seems like a decent price – so maybe I should grab it up.
Steve R.
Stuart–I read this posting with interest, as it was stated that Milwaukee had decided to completely cut off Amazon from selling their tools. You also mention that you are frustrated that you can no longer purchase Milwaukee tools from Amazon. As Amazon must be one of their biggest distributors, I thought I must have missed something. Before starting this, I visited the Amazon site to check this out. I found that on January 4, 2013, Amazon lists 4,153 different power tools, hand tools and accessories. These are spread out over 174 pages in the Tools and Equipment listings. Are you referring to some specific tool(s) or accessories, or is this possibly a policy that has been made public but is not yet in effect? Thanks.
Stuart
If you search for Milwaukee tools and then select Amazon.com as the seller, you’ll see that the list is filled with accessories and less popular tools.
For example, look at a popular M18 combo. It’s no longer sold directly by Amazon, only 3rd parties. Same with the new M18 FUEL drills and drivers. The most popular M12 tools are also no longer sold by Amazon.com directly.
Search for Milwaukee M18. Select Milwaukee as the brand and Amazon.com as the seller. There are 6 items, a reconditioned drill kit, M12 charger, M12 XC battery, 10-piece hackzall blade set, and an M12 radio. For a search of M12 there are 26 items, mostly accessories and less popular tool SKUs.
I observed that certain Milwaukee tools were no longer available via Amazon.com back in the late Fall, but someone in-the-know confirmed that Amazon was being cut off from buying new inventory.
James
uh…. I see hundreds of Milwaukee tools on amazon right now. what are we talking about here? also, I don’t have a OSH nearby, but another local hardware store chain named dixieline carries a lot of Milwaukee tools too… so where is this exclusivity?
Stuart
When you filter the search results you’ll see that Amazon.com is not selling these tools, 3rd party marketplace sellers are.
I don’t have specific details about the arrangement made between Home Depot and Milwaukee and Makita. Exclusivity arrangements are often specific about which competitors a brand cannot or should not sell to.
For example, Home Depot has an exclusivity arrangement with Klein tools that stipulates Klein cannot be carried at home improvement retailers. This refers to larger competing chains such as Lowes and Home Depot, and not independent distributors.
Parke
I’m surprised a tool company would want to miss out on all the sales that I’m sure Amazon would bring. They must have huge incentives. I have noticed that you cannot find Makita products in Lowes and that Lowes carries a full line of Bosch tools while Home Depot seems to only carry a Bosch router at my local store. I personally enjoy buying right from Amazon who has the best price 90% of the time.
Mark
Considering said brands, i.e. Milwaukee and Makita can be purchased elsewhere at merchants such as Grainger and eBay, the consumer still wins out though. That is IF they are willing to seek other options. But Home Depot does seem as if they want to monopolize the market and try to be the only place that sell said brands of tools and other brands as well.
Home Depot now reminds me of Apple trying to be all that ends all with products. They probably will have some success here, but if more consumers were willing to look around, this wouldn’t go so well for their bottom line. Which this all about.
Javier
Stuart good article. I was going to ask you lately but I never got around to do it why amazon doesnt sell many milwaukee tools and has a poor selection and their 3rd party prices arent competitive, but you pretty much answered my question. I earn amazon gift codes all the time and would have loved to buy some milwaukee tools with those codes but Im going to have to use them on other stuff.
Shannon Love
I think of a couple of legit reasons why both manufactures and retailers would like to avoid using Amazon. I suspect they are being hit by the same problems that hit computer retailers and manufactures when the internet took off in the mid-90s.
1) For retailers, they often find that people come into the brick and mortar store to handle the tools and ask detailed questions but once they’ve made their decision, they buy online from someone else. This effect destroyed the mom&pop computer stores back in the 90s. In other words, Amazon is parasitizing, brick and mortar stores.
2) Trying to figure out who actually sold something on Amazon is a nightmare for manufactures. I’m not sure Amazon itself actually sells much of anything but instead just handles connecting buyers and sellers. That means the purchasing experience for customers is entirely out of the manufactures control. Negative sales experiences rub off on brands even if customers know intellectually the brand had nothing to do with some crappy flyby night amazon seller. Plus, you have all the issues associated with warranties, refunds etc but spread over thousands of retailers.
The Apple Stores were Apple’s response to just these kinds of problems. The experience of buying Apple products before the stores was highly inconsistent and confusing and frustrating for customers. Apple wanted customers to have a consistent, high-quality experience when researching, choosing and buying Apple products as well as when getting training, support and repairs. They’ve proven very successful.
I imagine that high end tool makers like Milwaukee and Makita find themselves in much the same situation as Apple did and are trying to regain some control over their customers pre and post purchase experience. Home Depot is likely trying to stop being Amazon’s pre-sales support.
fred
I would agree with you – if we were talking about the local industrial disrtibutor that we’ve used for years – and employs knowledgeable staff – and where you can always find people who know tools.
In the case of Home Depot – my observation is that many of the sales staff would be as well selling shoes as tools when it comes to any detailed knowledge. At my local HD store – when I asked about a Ridgid roofing cutter – I got lots of mis-information that didn’t sound right – and needed me to look online for the real skinny. This was disappointing considering that HD seems to have some exclusivity sell some of the Ridgid-Emerson branded power tools – and even puts the name on shovels (not just the original plumbing tools that started the brand.)
Samibz
On black friday i saw a construction worker at Home Depot with a stack of Milwaukee tools next to him arguing with the HD manager about price matching. Meanwhile, i was at the checkout buying the Milwaukee Fuel Impact and he told me that OSH had all Milwaukee tools 50% off and with no sales tax. I thought he was a complete lunatic because he was yelling and causing a scene, but later that day i stopped by OSH and he was right..all Milwaukee tools were indeed 50% off, and almost nothing was left. Although i managed to pick up the last bare tool circ saw and a bare tool angle drill for a total of 110$. The sales woman said that Milwaukee was not going to sell to OSH any more, but i blew it off as misinformation, but now it all makes sense.
gold nuggets
According to the Power Tool Institute and other industry sources including THD investor reports, THD is estimated to sell 35%+ of the power tools sold in the U.S. and the industry is valued at $7B+ (@retail). That’s a lot of revenue for THD.
THD is not a monopoly in the power tool industry yet, but clearly we can read from their aggressive exclusivity and dealings with competition and their vendors that they are not satisfied with this 35% number. They want more.
Amazon is the biggest and only wide scale real threat to THD and their current business model. Therefore THD is trying to manipulate the market to their advantage. That is their job as a company; however, they do need to work within the confines of the law.
It will be interesting to see how this unfolds.
mnoswad1
I dont think i’ve ever bought a power tool from home depot other than an original 9.6v makita back in the day. I certainly would never ask a guy/gal in an orange apron for specs, suitability, or advise on a power tool…..ever. Seems most the employees could barley operate a parking garage booth and couldn’t keep up with the pace of fast food…..thus big box retail.
The other problem with box store tool buying is local market pricing vs national pricing, Amazon is usually lower by competing across a wider market, but can sell more volume. I rarely see the stock of tools move at my local HD, several outdated display items bolted to a shelf doesn’t help me compare ergonomics, weight, the specs on the box are behind a cage 30 ft up in the air……….the batteries are always dead, so I cant spin the motor for sound. HD is a horrible tool buying experience…..constantly bothered if they can help you, but they never can, and must be told by mgmt to never say “i don’t know”, so they always waste my time by fumbling with half answers when I test their knowledge out.
Not having amazon and other online retailers would obviously help home depot but hurt makita and milwaukee overall.
Tim
You are absolutely correct about current THD employee being completely worthless when it comes to actual product knowledge. As a previous THD employee who prided myself on knowing the specs, having actual experience, and knowing what I was talking about and being forced out of the company due to an overhaul in their scheduling system, I can attest to this fact. THD would rather have lower paid orange aprons on the floor than qualified employees.
Nick
Stuart,
I appreciate the article. I noticed the Milwaukee downtrend when the FUEL M18 units were released. I looked every day, waiting to see when they’d be available — meanwhile, Dewalt’s brushless units were readily available on Amazon.com
Finally, I saw that the FUEL units were available at Home Depot, through a third party distributor that was clad in Milwaukee branded clothing.
I’m upset that Amazon no longer carries their products. Price aside, Amazon.com had outstanding logistical capabilities — meaning that with their prime membership, we could get a tool within 24 hours regularly. Now, that’ s not possible.
itguy08
Good article but I don’t know why I should care about Amazon not carrying Milwaukee. Personally I use Amazon as a retailer of last resort because I’d rather get it locally or help the little guy.
I typically buy tools at HD or Lowes because when I need them I need them now, not in 24-48+ hours. And when there is a problem, it’s a lot easier to walk into HD, return or exchange it and get another.
Case in point: bought the Fuel 18v hammerdrill at Home Depot. Was a no brainer as everyone was at $299. The one I got had a very sloppy forward/reverse switch. 9 times out of 10 when I picked it up (I’m a lefty) I’d knock it to the lock position. Back to Home Depot to check the display model. It’s switch was nice and stiff. Walked in with the old one, out with a new perfect one. Had that been Amazon, I’d have to either order another and return the old one (and be out shipping and time) or wait around for an exchange.
Paying $10 less for a tool is not a big deal when that “savings” can be eaten up in shipping unless you pony up for the $75/year Prime Scam. I’d rather walk in, fondle the tool and walk out with it. If I pay a little more, so be it. I don’t have to hang around for UPS/Fedex, hope it’s OK, and deal with a return process via mail if it’s not.
Stuart
That’s the point, though, that everyone should be able to buy the tools at their retailer of choice. Assuming the retailer has an interest in selling the tools.
If I need a tool ASAP, I buy it at Lowes or Home Depot. If I need it without a few days, I order it from Amazon. For $4 extra per item my Prime membership upgrades 2-day shipping to overnight shipping.
I bought a Porter Cable 18V cut-off tool/angle grinder add-on a few months ago. The first Lowes I tried had one with a busted-open box that was missing parts. The second Lowes had one in decent condition.
A while back I was scoping out cordless circular saws, but the one I was looking to pick up was sitting on the shelf several years. The dust didn’t give it away, it lacked features of the last redesign did. Two other Home Depots didn’t even carry it.
If I order something on Monday from Amazon, it arrives on Wednesday. If there’s a problem with it, the replacement would probably arrive on Friday, maybe even Thursday, and I have a couple of weeks to drop off the return before my credit card is charged for the additional shipment.
I prefer ordering certain things online because it might ensure I receive fresher stock. Often I save a few bucks but there’s also a convenience factor. But most of my orders are pre-meditated. If I relied on my tools for my livelihood and needed replacements or specialty tools quickly, I would probably buy them at home improvement centers and local distributors far more often.
If a vendor wants to carry certain products, they shouldn’t be denied because another vendor – no matter how big – wants a greater chunk of market share.
If Home Depot’s agreement with Milwaukee and Makita stipulates that the brands cannot sell to Amazon, OSH, and Ace Hardware, consumers lose out on top of potential damages and losses to the blocked retailers.
Javier
I dont get why people complain about amazon charging for shipping when orders offered directly through amazon qualify for super saver free shipping if the total at checkout is over $25. Buying on amazon with prime is not the only way to ship your items.
Is amazon not offering super saver free shipping to all states?
Or are the people bashing amazon for charging a shipping fee not actual customers? Or possibly simply unaware that amazon offers free shipping?
Had amazon offered a fuel hammer drill it definitely would qualify for free shipping. Even huge shipping items like flatscreen tvs are offered for free shipping.
Now if people dont want to wait for the delivery times for the free shipping option and need/want a quicker 1-5 business day turnaround then thats a different story as those are premium shipping options and are offered for a fee.
Also the amazon prime membership is far from being a scam. It is a tool that if used properly can save you lots of money on shipping if you order often with 1-2 day shipping. Also to make a good thing better, amazon prime offers streaming of shows and movies.
Jason
What happens when there is no home depot within 2 hours of your town…..me! That’s the point the guy is making. It’s not just Amazon that stopped sales. Now I can’t buy at lowes or any other place here. Lowes doesn’t have shit for hedge trimmers either.
Anton
I can see why Home Depot would want this, but this really is a loss for Makita and Milwaukee. If Home Depot had excellent customer service, maybe, but it’s employees are notoriously ignorant about the products they sell. If I actually want to get advise, I usually go to Ace since the owner is the one running it. Ace people seem to be more knowledgeable and seem to care more about customers versus the HD or Lowes employee that just sees you as an anoyance before lunch break.
Same thing with Sears, it seems more often than not, the employees are mainly cashiers.
itguy08
With the Internet why would anyone ask a salesman about anything? I’m sure there are good ones out there but you can get a better idea of a tool by reading blogs and reviews like this site. They will be a much better assessment than some random salesguy.
I think the last question I asked a salesguy was what he thought of 3 refrigerators we were thinking of – all different brands. It ended up being 1 of our data points.
Other than that, I view Home Depot’s customer service as “within 90 days if there is an issue, it goes back”. They cheerfully exchange or refund me. That’s all I want and all I need and it works for me. I don’t often shop at Lowe’s but I imagine they are about the same.
Stuart
90-day few-questions-asked return policies are strong selling points for Home Depot, Sears, and Lowes.
My current drill/driver, circular saw, and track saw were purchased online, with my drill press, miter saw, hammer drill, air compressor, and Dremel purchased locally via Lowes or Home Depot.
Todd
The bigger issue that folks are forgetting about is “who” owns Milwaukee – TTI Group, Home Depot is probably the largest (or one of the) larger customers of TTI.
TTI makes AEG power tools, Hoover, Dirt Devil, Ryobi, Homelite, Vax and the Ridgid branded power tools (sold only at HD (not the vac’s)), so I speculate that TTI most likely was asked by HD (wink, wink, nod, nod) to cut off certain channels that most likely impacts their largest client and TTI did exactly what they were asked to do and most likely with a very large PO for more TTI products going forward. It is the old 80/20 rule, 80% of TTI sales are coming from only 20% of it’s customer base (HD), not the I/C shops or 2 step accounts (again I speculate).
I haven’t bought new power tools in a while and I know where I most likely will not be purchasing from in the future or what brands I may or may not purchase…..
Colin
Personally, I think Amazon is the bain of B&M stores and manufacturers alike. The sales experience is reduced to vague and brief descriptions and reviews from uninformed and non-professional consumers. It’s amazing some of the stupidity in the reviews section. I personally avoid Amazon unless they have some insanely killer deal on a product i’m not sure I need. Otherwise I would much rather give my business to any B&M store.
mnoswad1
Important to realize that big box brick and mortar stores were the bain of the mom and pop independents first. Seems like they can’t take a dose of their own medicine. Funny that “buying local” now means buying at home depot.
I would prefer to buy local, but not at local inflated pricing. Ever check the pricing at graingers vs. home depot vs. amazon? Makes me feel scammed every time I buy at a b&m store.
look below, same product………which is the better site, better visual ergonomics (i just coined that), easy to read specs, item description, pictures and overall online buying experience. Price and free shipping not withstanding.
http://www.homedepot.com/buy/makita-63-amp-tool-less-jig-saw-with-led-light-4351fct.html#.UOuKIo68CFI
or
http://www.amazon.com/Makita-4351FCT-Barrel-L-E-D-Light/dp/B0013E4AKI/ref=sr_1_1?s=hi&ie=UTF8&qid=1357613661&sr=1-1&keywords=4351FCT
I only recently got interested in Makita tools to replace my old dewalt stuff because of the information I got on Amazon, I was only able to discover the unique variety of Makita cordless offerings by browsing on Amazon.
So If Amazon didn’t sell Makita, I probably would have started to buy into a different cordless system system.
Stuart
Vague and brief descriptions are typically provided by the brand manufacturers. Worse than vague and brief are the inaccurate descriptions. The recent [stationary] dunnage racks that I wrote about were described as having casters and handles. Why? Because someone at Amazon copy-pasted the ad copy that refers to a wide range of Rubbermaid Commercial SKUs in the same general product family.
But I agree about the user reviews. Some of the reviewers clearly lack the experience or insight to offer useful input about the product they’re reviewing. There are useful ones, though, with helpful reviews sometimes outbalancing the less helpful ones. These are not Amazon-specific observations. Still, helpful reviews in a sea of relatively useless reviews are often better than nothing.
fred
It is a much changed world since I first started buying tools in the early 1960’s. Some of the new seems better (more buying choices, bigger discounts available – both locally and via the Internet and more information easily available.) What we’ve lost – maybe the bane (not bain (sic) ) of our new world – is that developing long-term relationships with small hardware stores and their helpful knowledgeable staff. Home Depot pushed them out of business – and as was pointed out above – the Internet is now eating into their business.
What I see as the big issue is that predatory practices (whether by big boxes like HD and Wal-Mart – or by Internet giants like Amazon) can have a negative impact on the manufacture of quality products based on the lure of ever-increasing profitability. Maybe this just is a lament of old age – but professional quality continually-serviceable tools seem to have become a smaller fraction of what’s on offer. I have some 50 year old portable power tools that are still in commercial use – but based on more recent purchases I’m not as hopeful about some of the newer offerings. Some tool turnover is not based on tools wearing out (which they do) but because new tools offer new capability or improved productivity. The march of technology (e.g. electronics making brushless motors practical) and the explosion of cordless tools with changes in battery platforms may help convince us to buy new – but I can’t help also think that some of this is based on marketing strategy to get us to buy more tools more frequently to help support all the big boxes, internet providers and increasingly offshore factories
As far as misinformation available from manufacturers and via the Internet – I’m less-alarmist than others. Caveat Emptor has always applied to our buying – and it is naïve to have an expectation that what we read on the Internet (even on great blogs like Toolguyd) or in Manufacturer’s copy – will be 100% well-fitted to our needs. What I do find useful is that when you sort through the many reviews of some products (e.g. on Amazon) you may be able to find enough pertinent information to make a more informed buying choice.
peter whittlesey
As an old time Milwaulkee tool fan I keep wondering how can we ever get back to made in USA, support quality, decent pay, long term jobs, development of manufacturing skills and education if they out source it all ? Some way we’ve got to get some leverage from professional tool users and equipment buyers to stop the downward spiral. we have to use our $ to fight their $ via boycott’s, divestment and education of buyers from the pro’s to average joe. The old question of “who’s side are you on ?” is still operative from wages, work conditions to war.
see AN INTRODUCTION TO THE WAL-MART EFFECT
http://www.teleos-inc.com/pdfs/wp/Wal-Mart_Effect_Intro.pdf
.
chucker
So, tell me how shopping at Amazon gives you the ability to ask technical questions about a power tool? Anyone can go online and get technical answers
from a trade forum, and read reviews of most power tools. Where is your beef??
If I need a tool for a job….and HD has it….why the f… would anyone wait 2-5 days for some 3rd party to ship it??
John W
Home Depot is an investor in TTI the Chinese company that makes Milwaukee, Rigid, Ryobi and other brands. They have a working relationship where Milwaukee pays to have a company rep in every store. Bosch was setting up Pro Centers in some of the Home Depot stores and really cut into the Milwaukee business. This is when Home Depot decided to require Milwaukee reps in all stores. Remember Home Depot got rid of Hilti a few years ago. My opinion is H D doesn’t care about professionals at all. They only care about pushing product on people who don’t know any better. Service rarely exists in their stores. The Bosch reps were helpful and knowledgeable with more than just their tools. Home Depot = cheap and nasty.
Brandon Waller
No no no!!
Screw Anazon and all the big box stores!
Support smaller companies like Acme Tools, Great Lakes Power Tools, or Ohio Power Tools. They will have a better price, and you support a small business instead of multi-billion dollar greed.
Jason
Home Depot and Lowe’s offer 90 days for returns if I have a problem and we mostly buy dewalt so after 90 days we can go to a factory repair store. Milwaukee and dewalt both still make some great tools and the dewalt flexvolt is great we have not had any problems. We buy mostly dewalt and try to buy the USA made dewalt when we have a choice. Yes I know it’s made with global materials but at least it’s helping to keep a few extra factory open since it is assembled in the USA. HD has some good prices on the tools we buy so I am happy.
Dylan
Dude.. did you really write an article that companies are practicing anti-competitive behavior against Amazon ? It this supposed to be satirical? More companies should do so…
Stuart
In case you were unaware, this was 8 years ago.
Honestly, in hindsight, Milwaukee pulling out of Amazon was probably the best thing they could have done.
Amazon also wasn’t the company suing about anti-competitive practices.