Is Harbor Freight getting too big for its britches?

jkesselr · May 17, 2018

Let me start by saying I love HF as much as the next guy. I have bought plenty of **** from them over the years and a lot of it has been good at a great price and a fair amount has been, well, just ****.

What I would like some thoughts on is do you guys think HF is getting a little too cocky? They have certainly upped their game in many respects, but I am most concerned about the drastic increase in prices across the board. It seems like even things that haven’t been improved are much more expensive now than it ever was in the past. Sure, inflation causes increases in price, as does foreign policy, but not to the extent we are seeing, I don’t think.

I’ll admit, I have a metric ****-ton of Snappy tools, some that I have paid dearly for, but HF has always been the brand that occupies the “get the job done for the least amount of investment” brand space. It seems like they are moving away from that model on a lot of their offerings. They may still be cheapest, but not by as much as they use to be. It is often to the point where, for a marginal increase in your investment, a much better tool can be bought. It reminds me of Craftsman back in the day. Craftsman went from being good tools at cheapish prices to good tools at damn-near tool truck prices, to eventually ****** tools at damn-near tool truck prices. Demand fell off and HF occupied the void and capitalized on it to become the powerhouse it is today. Do you think HF is making this same mistake? Why or why not?

I say all of this and ask these questions out of concern that HF stays around and stays healthy. As much as I appreciate the really nice tools I have, I also really appreciate the cheap tools that have allowed me to do things I otherwise couldn’t afford. I owe this to HF and other inexpensive tool companies and hope they will not follow the same dark road others have in the past.

I look forward to your thoughts on this!

yamaha0343 · May 17, 2018

Subscribed.

zendriver · May 17, 2018

If I owned a retail tool company I would keep my prices high as I possibly can - as long as they were still under everybody else's.

I just bought a complete MIG welder set from them for A little over 600 bucks.

I don't know how it could possibly sell for any less than that.

HF has become a retail force to be reckoned with which is his biggest complaint.

Their popularity will it go up as people get poorer and look for value.

As far as the quality of their items, they just represent the general quality that is made in china today, which is a lot different than it was 20 years ago. It should be no surprise that higher prices are a result of that.

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ngk22r · May 17, 2018

Their quality has continued to go up and people are wanting quality tools at a lower price. Maybe they are working on a new generation of tools to be even more competitive.

Craftsman (Sears) problem was the price stayed the same and quality went down, HF quality is going up.

Bockscar · May 17, 2018

Craftsman tools never even came close to tool truck prices

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American Locomotive · May 17, 2018

ngk22r said:
Their quality has continued to go up and people are wanting quality tools at a lower price. Maybe they are working on a new generation of tools to be even more competitive.

Craftsman (Sears) problem was the price stayed the same and quality went down, HF quality is going up.

However, HF's prices are going up.

ScottsGT · May 17, 2018

I'll give them credit for making a better tool. But it is hard to overcome a bad reputation. I would rather see them morph into a quality tool store instead of the other way around. How many businesses today (Craftsman for example) turn to putting out a sub par product and try to live off their old reputation they once had?
Another that is changing for the positive with a bad reputation is Kia Motors. The Kia of today is as good as a Honda with a 100,000 mile warranty.

Ji m · May 17, 2018

Someone has to pay for all those stores being built.

Compare Pittsburgh to Tekton.

There's some overlap in quality and COO,
and there's also some tools where Tekton is much better (most of their wrenches),
but Tekton is almost always the more expensive option vs HF.

Even though HF carries the direct cost of carrying 800 brick and mortar stores in the USA.

Even Sears isn't able to support that many stores,
and they sell products from thousands of other companies.

dwasifar · May 17, 2018

ScottsGT said:
Another that is changing for the positive with a bad reputation is Kia Motors. The Kia of today is as good as a Honda with a 100,000 mile warranty.

Better than they used to be? Absolutely. As good as a Honda? I don't think so.

Three years ago when I was in the market for a new car, I was down to a Kia or a Honda. Talked to a friend who owned a service shop and sees every kind of car come through. He said Honda for long term durability, without hesitation. This fits with my experience.

Kia/Hyundai is a hell of a lot better than they were, or I wouldn't have been considering one at all. But I'm glad I chose the Honda.

Farmall450 · May 17, 2018

Ji m said:
Someone has to pay for all those stores being built.

Compare Pittsburgh to Tekton.

There's some overlap in quality and COO,
and there's also some tools where Tekton is much better (most of their wrenches),
but Tekton is almost always the more expensive option vs HF.

Even though HF carries the direct cost of carrying 800 brick and mortar stores in the USA.

Even Sears isn't able to support that many stores,
and they sell products from thousands of other companies.

True, but the Sears are several times larger, and with Kmart they had well over 1000 locations.

dwasifar · May 17, 2018

Ji m said:
HF carries the direct cost of carrying 800 brick and mortar stores in the USA.

Even Sears isn't able to support that many stores,
and they sell products from thousands of other companies.

I understand your point, but to be fair, a Sears store is a ginormous mall anchor, whereas a HF store is a much more modest strip mall affair; you can't really compare them.

Plus which, HF isn't run by a vulture more interested in its corpse than its health, so there's that too.

Sears used to run standalone hardware stores that would have been a better fit for this comparison. And it's true that they let those die, but I think it's more accurate to say they don't do it rather than can't.

I miss the Sears Hardware in my neighborhood. It closed years ago. Now it's a Harbor Freight.

ToocoolZ28 · May 17, 2018

They have done what they set out to do, mostly kill off their main competition (Craftsman) now its time to raise prices.

ocloc24 · May 17, 2018

I dont use a ton of HF tools, but I like that they're stepping their game up. They've been going through and revamping each type of tool, and so far I like it. Except for the new power tools, I think youd have to be a fool to buy any of their cordless stuff.

The only thing that kills me, they've been doing a makeover to practically everything they sell, except for screwdrivers, sockets, and wrenches. I dont get it. Youd think that would be the first thing they'd update, as those are the bread and butter tools. Hopefully something is in the works.

I dont use their tools professionally, I'm a snap on guy, but I do use some of their stuff at home.

dimichele · May 17, 2018

ToocoolZ28 said:
They have done what they set out to do, mostly kill off their main competition (Craftsman) now its time to raise prices.

Yep, kill off you competition with low prices, then jack them up, has been around for years.

Tallpilot · May 17, 2018

Tekton recently raised prices too. Everything made out of metal is currently up.

Harbor Freight is moving upmarket with new ‘brands’ but for the most part the cheap option is still there (Chicago Electric for example). So I see it as more choice not them killing competition and raising prices. Certainly their margins are better on $40 angle grinders than $10 ones.

Ocloc makes a good point. The Pittsburgh Pro ratchets are pretty decent for the price but the sockets and especially the nasty Indian made wrenches need some love.

thesilverone · May 17, 2018

.......

zendriver · May 17, 2018

Wow!, the prices at Harbor freight are going up?

Shop much anywhere else? I paid $20 for a ****** screen door closer at a mom and pop hardware store and GF paid almost 8 dollars for a small "smoothie" at some lame-*** chain. She paid almost 5 dollars for a head of cauliflower at the grocery store!

Along with our "new Prosperity" and the helpful Tarrifs, we also get prices going up everywhere big time.

BTW harbor freight did not kill sears.

Sears killed Sears

At least Harbor freight, has something more to offer to go along with their price increases

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Where Are My Gloves · May 17, 2018

ScottsGT said:
Another that is changing for the positive with a bad reputation is Kia Motors. The Kia of today is as good as a Honda with a 100,000 mile warranty.

Im sorry but no. I worked on Honda’s for 6 years exclusively and I now work on Toyota/Lexus with a sprinkling of anything else that comes in, including KIA/Hyundai. They are much better than years before and at first glance may seem on par with Japanese cars. But, with the exception of a couple motors, they are far from being as reliable as Jdm. A Hyundai with 100K versus a Honda or Toyota with 100K is night and day. They don’t hold up nearly as well. The steering becomes floppy and loose, the motors burn oil, and panels on the interior seem to grow apart...

But comparing KIA to HF is probably accurate. Good enough to hang with the big boys and get the job done. But if you treat it like snap-on (again with the exception of a few of their tools) it is not going to hold up.

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dwasifar · May 17, 2018

Where Are My Gloves said:
But comparing KIA to HF is probably accurate. Good enough to hang with the big boys and get the job done. But if you treat it like snap-on (again with the exception of a few of their tools) it is not going to hold up.

+1 this.

Kia still stands for "Korean Imitation Accord." They might catch up eventually, but they're not there yet.

SEastHonda · May 17, 2018

I haven't really noticed higher HF prices, but, if they have raised prices on some items it could be because they know they are dumping and hope to prevent additional USITC investigations and duty orders.

CobraRed · May 17, 2018

Did we not fill the Harbor Freight quality/price/tool truck comparison/lawsuit thread quota this week?

I thought we had.

Thanks OP for picking up the slack. Almost went a full 6 hours.

zendriver · May 17, 2018

SEastHonda said:
I haven't really noticed higher HF prices, but, if they have raised prices on some items it could be because they know they are dumping and hope to prevent additional USITC investigations and duty orders.

I recently purchased a welder's helmet - with a coupon, and the price is about the same as they same for years, maybe a little less.

I think the "sticker shock" is coming from the expectation - usually from people who don't shop there, is that the Hercules cordless drill should be priced the same as the Chicago electric model.

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Git · May 17, 2018

Do you guys think that maybe the reason why the prices are going up is because of the CLASS ACTION LAWSUIT where they had to pay out millions???

The same guys who couldn't wait to file a claim are now complaining about the price increase??????

ARFLY · May 17, 2018

What we are seeing with Harbor Freight is the natural cycle of retail business. Companies start out small with low overhead, low cost, low margins. Companies grow and expand. Overhead goes up, cost goes up, margins hopefully go up. This is not unique to Harbor Freight. This diagram from marketing 91.com gives a good illustration of the cycle of retail.
View media item 83165We have seen the big retail giants go through this cycle. Look at Sears and Montgomery Ward. You can even see Walmart progressing through this cycle. Powerhouse companies like Apple are also moving through this cycle. Anyone remember the Herter's company? Right now HF seems to be in Cycle 2 moving into Cycle 3. Walmart seems to be in Cycle 3 moving into Cycle 4. It's a natural progression. Companies have to invest and grow or they die. Unfortunately the outcome is fairly certain at some point.

AceofSpad3s · May 17, 2018

ocloc24 said:
I dont use a ton of HF tools, but I like that they're stepping their game up. They've been going through and revamping each type of tool, and so far I like it. Except for the new power tools, I think youd have to be a fool to buy any of their cordless stuff.

The only thing that kills me, they've been doing a makeover to practically everything they sell, except for screwdrivers, sockets, and wrenches. I dont get it. Youd think that would be the first thing they'd update, as those are the bread and butter tools. Hopefully something is in the works.

I dont use their tools professionally, I'm a snap on guy, but I do use some of their stuff at home.

The Pittsburgh professional screwdrivers have been around for years and are pretty good
miles ahead of any of the trash western forge butter blade craftsman or husky drivers that are double the cost. Never used them but the Taiwanese chromed pro sockets don't look too bad. I'd agree on the wrenches though.

thooks · May 17, 2018

My thoughts:

1. There's not another store out there that carries what HF does under one roof for the pricing. Most all other stores have the SAME quality, same stuff from China, etc., selling it for much more or their Chinese product is much worse in quality.

2. HF's pricing has gone up, but nothing compared to the increase in quality or inflation or cost of doing business.

3. Hyuandi used to be a $6,000, maybe make it to 60k miles disposable piece of junk car. Have they made improvements? Yes. But their pricing is way too close to Honda and Toyota and their long-term quality is NOT equal.

zendriver · May 17, 2018

Git said:
Do you guys think that maybe the reason why the prices are going up is because of the CLASS ACTION LAWSUIT where they had to pay out millions???

The same guys who couldn't wait to file a claim are now complaining about the price increase??????

I don't - at all in fact I think it will be the exact opposite.

They got tons of free publicity with this stupid lawsuit and everybody who gets a $10 gift card will probably go and buy $150 more worth of stuff at the store.

Besides, most business probably carry liability insurance which would cover payouts in lawsuits.

This frivolous lawsuit did nothing but make some lawyers some money and help push hf into the mainstream even more, imo

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ScottsGT · May 17, 2018

Someone did a lawsuit cost vs. recorded profits in the thread on the lawsuit. lawsuit was a drop in the bucket to yearly profits. Owner is even giving a million $$ to schools this year. I for one am just going to turn around and spend everything back in the business, and then some.

zendriver · May 17, 2018

ScottsGT said:
Someone did a lawsuit cost vs. recorded profits in the thread on the lawsuit. lawsuit was a drop in the bucket to yearly profits. Owner is even giving a million $$ to schools this year. I for one am just going to turn around and spend everything back in the business, and then some.

How does anyone know what Harbor freight's profits are, since they are a private company?

Just curious.

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emeraldcoupe · May 17, 2018

Where Are My Gloves said:
Im sorry but no. I worked on Honda’s for 6 years exclusively and I now work on Toyota/Lexus with a sprinkling of anything else that comes in, including KIA/Hyundai. They are much better than years before and at first glance may seem on par with Japanese cars. But, with the exception of a couple motors, they are far from being as reliable as Jdm. A Hyundai with 100K versus a Honda or Toyota with 100K is night and day. They don’t hold up nearly as well. The steering becomes floppy and loose, the motors burn oil, and panels on the interior seem to grow apart...

But comparing KIA to HF is probably accurate. Good enough to hang with the big boys and get the job done. But if you treat it like snap-on (again with the exception of a few of their tools) it is not going to hold up.
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we have a 2011 Sorrento 4 cyl with 150k + on it, has none of the issues you pointed out. it's holding up quite well.

dwasifar · May 17, 2018

zendriver said:
How does anyone know what Harbor freight's profits are, since they are a private company?

Good question. Maybe it came out in the lawsuit as part of discovery?

6PTsocket · May 17, 2018

Ji m said:
Someone has to pay for all those stores being built.

Compare Pittsburgh to Tekton.

There's some overlap in quality and COO,
and there's also some tools where Tekton is much better (most of their wrenches),
but Tekton is almost always the more expensive option vs HF.

Even though HF carries the direct cost of carrying 800 brick and mortar stores in the USA.

Even Sears isn't able to support that many stores,
and they sell products from thousands of other companies.

Tekton has built it's reputation on customer service. They bend over backwards to "make it right ", if you have a problem. That is the antitisis of the HF model. Exchange for 90 days and goodbye. Or you can buy insurance on some things, killing a lot of the price advantage. Have you ever called HF customer support? Needed a spare part? Not a good experience. It is all basically throw away. The better stuff starts to aporoach name brand stuff on cost so why buy from HF? I have the 44" box set, that had a dent when uncrated, and an old Earthquake that appears to be a knockoff of the IR Thundergun but I hesitate to often spend a lot there. Too much stuff was returned defective for exchange or refund. Their qc is no better than it ever was, from my experience. Most stuff comes from several suppliers with varying quality. I do shop there but it is a **** shoot.

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AceofSpad3s · May 17, 2018

I don't really see a lot of price increases, and if anything they are improved products.
Was pretty skeptical about those vulcan welders, but AvE just did a video on one and said it's pretty good for the money.
The apache cases, bought one for my multi meter, it is very nice for the money and I'll buy more for handgun cases.
The doyle pliers look good but too close to channel lock prices, so I'll agree with the assessment there.
Don't own any but the breman locking pliers look good for the money, didn't fell too cheap and compared to everyone else, they are cheaper and Taiwanese made like everyone else.
The yellow daytona jack is great from what most people here say.

I do see some dumb stuff like charging dewalt prices for a drill (hercules) and the doyle pliers being near US options, and that $90 torque wrench, but on average I would say harbor freight has been improving in quality with their higher lines while still offering bottom of the barrel junk to those that would like it at a cheap price

1982fxr · May 17, 2018

ARFLY said:
What we are seeing with Harbor Freight is the natural cycle of retail business. Companies start out small with low overhead, low cost, low margins. Companies grow and expand. Overhead goes up, cost goes up, margins hopefully go up. This is not unique to Harbor Freight. This diagram from marketing 91.com gives a good illustration of the cycle of retail.
View media item 83165We have seen the big retail giants go through this cycle. Look at Sears and Montgomery Ward. You can even see Walmart progressing through this cycle. Powerhouse companies like Apple are also moving through this cycle. Anyone remember the Herter's company? Right now HF seems to be in Cycle 2 moving into Cycle 3. Walmart seems to be in Cycle 3 moving into Cycle 4. It's a natural progression. Companies have to invest and grow or they die. Unfortunately the outcome is fairly certain at some point.

This ^^^

zendriver · May 17, 2018

I think many people are greatly bothered that harbor freight even worked their way out of stage one.

Maybe Chucky Homier's daughter will get back in the tool businesses start under cutting them.

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thooks · May 17, 2018

emeraldcoupe said:
we have a 2011 Sorrento 4 cyl with 150k + on it, has none of the issues you pointed out. it's holding up quite well.

I remember Hyundai coming to the US in the late 80's. 2011 is about 25 years later than when they were a real disposable car. I would hope they have improved.

ARFLY · May 17, 2018

When my wife and I first go married we bought a brand new 99 Hyundai Elantra for $12,000. It was truly awful. It broke down on the way home from the dealership. I had a 2009 Hyundai Santefe that was really nice. The 2013 Kia Sorento with v6 I Had was truly amazing. Just to put this back on track, I really like the Pittsburgh pro ratchets and the paint brushes HF sells. HF has a business model that has worked for them. Time will tell if offering better quality products at higher prices will work or not.

Professional Tool User · May 17, 2018

At the end of the day, it's up to the consumer to vote with their wallet. If Harbor Freight alienates their main DIYer customer base with high prices, they are toast. For every new and improved item, they are going to have to justify their prices. Anyone who does their research will find out the prices on many of their new and improved tools are too high given the 90 day warranty nonsense. Even if you didn't have to pay for a proper warranty, there's a reason why a known quantity costs more.

jkesselr · May 17, 2018

ToocoolZ28 said:
They have done what they set out to do, mostly kill off their main competition (Craftsman) now its time to raise prices.

This is kind of the point of my post. They have killed Craftsman and now they increase prices to move into the space that Craftsman occupied. The problem is that it then opens the door for the next harbor freight to undercut the new HF. Does that make sense?

jkesselr · May 17, 2018

Bockscar said:
Craftsman tools never even came close to tool truck prices

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Umm, actually they did. Craftsman Pro long handle 3/8" drive ratchets were in the neighborhood of $50-$60. That is solidly in SK territory. Last I checked SK has tool trucks.

They aren't snappy prices and never were, but they were never close to the quality either. Craftsman fucked up trying to sell an offshore ************* for what a sane person could by a great industrial brand for. SK, Williams, Proto, these all occupied that price point and were markedly better in terms of quality for the money.

Is Harbor Freight getting too big for its britches?

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