Why are Harbor Freight Tools So Cheap?

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Fellow Gray Beards, we all have a love-hate relationship with Harbor Freight Tools, a company that brings in over 5 billion dollars in revenue a year. There is no other place that even comes close to the discounts and savings when it comes to decent quality tools on a budget. Yes, these tools and accessories are imported from overseas; however, you purchase them at a fraction of the cost compared to larger retailers such as Lowe’s and Home Depot.

So why are they so cheap? Before we go into the details of how the company can pass on savings to you, we want to show you where they first came from. The company, as we know it today, was started by Mr. Eric Shmidt and his father in 1977. Then, it was called the Harbor Freight & Salvage Co. The first place of business was just a small building located in North Hollywood, California. At that time, Mr. Shmidt was only a teenager with a vision to “provide working people with great quality tools at the lowest prices” 1. Initially, the company operated in a mail-order capacity, with no physical retail locations. They strictly focused on merchandise that was either returned to other retailers or simply liquidated.

Harbor Freight Socket Shelf

The first physical Harbor Freight & Salvage Co. location opened in Lexington, Kentucky in 1980 and became successful, paving the way for other locations throughout the United States. The company officially changed the name to Harbor Freight Tools, and Mr. Shmidt officially became the president in 1985 at the age of 25. He served in that capacity until 1999, when he officially became the Chief Executive Officer (CEO) of the Harbor Freight Tools. Today, Harbor Freight Tools has over 1000 retail locations nationwide.

With the leadership from Mr Shmidt and his “art of the deal”, he was able to cut out middlemen and procure tools directly from the manufactures overseas, significantly cutting costs to the consumer. Although Harbor Freight is synonymous with cheap around many influential circles, we think that it’s a hidden treasure trove. We want to compare this to your significant other shopping for clothes and the “shop til you drop” mentality. Once a man walks into this paradisiacal place, he will not leave empty-handed. Simply because the deals are too good to pass up.

Why are these tools cheap? Folks say that Non-OEM brands such as those available at Harbor Freight, have less quality control mechanisms in place, are made of cheap materials and break easily. This may be true, to an extent. When you walk into your favorite Harbor Freight Tools location, you are walking in for the deal, not necessarily the quality. You know that the tool will not outlast your life, but you know you need it now to accomplish that pesky task your wife is nagging you about.

Instead of spending a fortune, you simply spend what you need for the job, with the hopes of the tool lasting a few years. The majority of the tools you have in your garage are made in China anyway. You, a frugal individual, might as well spend a few bucks less, and still have beer money left over. Bottom line, Harbor Freight gets its tools directly from tool manufactures. This is a cost-cutting measure for a few reasons. Harbor Freight is not glamorous when it comes to marketing. They’re a no bull, no-frill type of a gentleman’s place. You either get online coupons or a newspaper delivered to you with deals you can’t pass up. Every, single, time. There is no fancy in your face marketing, or extravagant super bowl commercials to sell you. They know what you want, which is saving money.

Check out a quick review of a Snap-On vs. Harbor Freight (ICON) 1/2″ Torque Wrench.

Did we tell you about Harbor Freight Warranty? No?. How does LIFETIME sound? Not many compare these days! Let’s just say We all love Harbor Freight Tools. In fact, we’re about to head out to get our 20% off a single item and a free LED light, because WHY THE HECK NOT?

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