The Tool Industry’s Dirty Little Secrets: Replacement Batteries
An anonymous commenter on my Cordless Tool Battery Primer asked this question:
Ahh, so you noticed the secret. Yes, it is quite possible to buy a tool and two batteries for only a few dollars more than two batteries.
I’ve talked to several manufacturers about this situation, here are some of the things I have been told (these are not necessarily direct quotes):
“The most expensive part of most cordless tools are the batteries. We purchase the cells for production runs of tools in larger quantities and therefore they are less expensive to manufacture than the smaller runs of replacement batteries.”
“Margins on tool sets are low and the replacement batteries are much higher. We need to get people to buy a tool so they will buy accessories for the tool down the road.”
“Modern tool batteries often last longer than the tool with which they were purchased. So we focus on keeping the battery price down in the kit form.”
“Replacement accessory batteries have more packing and handling as a percentage of their cost.”
I can tell you that as a distributor/seller the basis of the higher cost comes from the manufacturer. Regarding the reasons above, I have a feeling all of the above have a little bit to do with it… as well as the need to show units shipped of new tools to executives, bankers and the press.