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Old 02-01-2012, 04:10 PM   #1 (permalink)
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Default Why Canadians get hosed on prices?

So I'm trying to figure why we get hosed on prices. I work in logistics - importing & exports so know a little.

Duties - I looked at the Tariff Schedule for duty rates
Skiis - Free
Ski Bindings - Free if made in US/Mexico (and there are other conditions for duty free but most don't apply). 5% if made in China but must have a certain Form signed by manufacturer. Otherwise it's 7%.
Cross Country Skiis & Snowboards - Free if made in US/Mexico (and there are other conditions for duty free but most don't apply). 5% if made in China but must have a certain Form signed by manufacturer. Otherwise it's 7.5%.
Snowboard bindings, ski poles - Free if made in US/Mexico (and there are other conditions for duty free but most don't apply). 3% if made in China but must have a certain Form signed by manufacturer. Otherwise it's 6.5%.
Downhill Ski boots - Free
Cross country skii boots and snowboard boots - Free if made in US/Mexico (and there are other conditions for duty free but most don't apply). Otherwise it's 18%. (No GPT treatment eg. China but if made in Australia or New Zealand the duty is 12%)

Taxes
In Ontario HST is 13%. However, in a business it's a wash. When you import goods you pay the HST but the government gives it back to you. When you sell the goods you collect the HST but then you have to give that to the government.

Shipping
Varies depending on your carrier. For me, to ship a pallet of goods in North America across the border costs about $300 after all the additional fees and normally about $50 to $75 each additional pallet. I sent 10,000 lbs of goods to Las Vegas for a show at about $1500. When I import goods from our US warehouse it's more or less the same. So... lets lsay one pallet of snowboards weighing 2000 lbs (100 boards?) is $300. That's $3 per board. Importing a pallet from China at the same weight costs about the same after the fuel surcharges, bunker fees, etc...

Brokerage Fees
I pay about $50 - $100 per shipment importing. Exporting to US is gawd awful because US brokerage works differently. They charge based on the value of the shipment.

Union
I don't think any independent board shop is unionized so don't have to worry about all the ridiculousness associated with unions.

US Exchange Rate
It was a factor in the past but not anymore. CAD/US almost on par. Those businesses who purchase in US currency could be making a tiny profit on the exchange rate alone.

So why for example, Lib Tech which is made in the US is about $200 more, MSRP in Canada? I'm all for supporting the local guy and the Canadian economy but, come on, seriously? 100% profit on snowboards? Okay maybe more like 90% profit but still. It kinda irks me when I see a sale sign that says 20% off on a board. In my mind it's not really a sale because it's still 60% profit for the seller when selling at 20% off.
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Old 02-01-2012, 05:09 PM   #2 (permalink)
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Tradition?
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Old 02-01-2012, 07:11 PM   #3 (permalink)
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Smaller market for one thing. 10x smaller. You can see the diff when you go south of the border and hit up one of those US stores. Far more stock, far more selection, because vendors can depend on far quicker movement of inventory.

Vendors can make money two ways: One is by markup on individual goods, and another is by cycling inventory quickly. If you have two items, one has 10% markup, the other only has 2% markup, but the second item sells 10x as fast, you'll make more money on the second item. Canadian market doesn't support that kind of quick inventory turnover, so vendors have to depend more on markup.
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Old 02-01-2012, 07:36 PM   #4 (permalink)
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If you want to save a little money NEVER EVER use UPS, USPS Has much cheaper fees, Also in Alberta there are places just across the border(States side) you can get things shipped to and they give you a year to go pick it up... I guess its possible somebody could do that and not clam it coming back in to Canada.....
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Old 02-01-2012, 07:41 PM   #5 (permalink)
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Not sure why you get hosed but why do Canadians hate The USA so much, i was in whistler last weekend and all i heard was bad shit come out of canadians mouth about the USA.
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Old 02-01-2012, 07:54 PM   #6 (permalink)
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Bad stuff about Americans? In Western Canada? I can't imagine why

Cough...Keystone...cough

As for pricing differences, it's not just snowboards. The MSRP is higher in Canada on almost every identical product. Largely, it's a hold over from days of significant currency differences, but lately there's no real reason
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Old 02-01-2012, 07:59 PM   #7 (permalink)
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Quote:
Originally Posted by Bones View Post
Bad stuff about Americans? In Western Canada? I can't imagine why

Cough...Keystone...cough

As for pricing differences, it's not just snowboards. The MSRP is higher in Canada on almost every identical product. Largely, it's a hold over from days of significant currency differences, but lately there's no real reason
Yea prices are ridic in canada. I couldnt believe they wanted 18 dollars a lb at mongolian grill, its 7 bucks total here. Taxes are a joke, after thinking about it you guys dont get free health medical coverage.
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Old 02-01-2012, 08:18 PM   #8 (permalink)
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There's a fundamental attitude difference between Americans and Canadians that Americans just don't get. Probably because the differences that you easily see are negative: high taxes, restrictive laws, etc.

There's a story in Pierre Burton's "The Promised Land" about the settling of the Canadian West that kinda goes to the heart of the matter.

An American Farmer sold his land, pulled up stakes and emigrated to the West in 1800's. When asked about the difference between the "democratic" American Wild West and the rather boring Canadian West and the authority imposed by a central government, he said "if I get in trouble in Canada, the Northwest Mounted Police will catch me and I'll get justice in a fair trial. But I also don't have to worry about vigilante justice and crooked local sheriffs"

Maybe we're boring, maybe we don't have individual state rights and yes we pay more in tax. But we chose that to get the positive tradeoffs: universal healthcare, a social safety net, general safety and a heavily regulated, but relatively stable economy.
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Old 02-01-2012, 08:38 PM   #9 (permalink)
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You think its bad there, in Japan we pay more than double on almost all items even though we are way closer to china where they are made, so lower shipping costs.
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Old 02-01-2012, 09:06 PM   #10 (permalink)
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You know up until last year i used to think the same thing about Australia and its prices compared to similar products in the USA. The fundamental issue here is demand, which obviously derives from population. Consider the USA has close to 330 Million people (yes I'm including illegals) AUS has just on 21 Million. Of that population difference, if 10% of the US population buy a snowboard thats 33 Million sales, if we sell to 10% its 2 Million, so I'm sure you see the difference in price markups, sell less = more profit margin, sell more = less margin.

A prime example is this. Australia has a massive and excellent quality wine industry, so why when i travel the the US, why do i see the exact same bottle of red that costs $30 here in AUS cost $8 in the US. Simple the US bulk buys our wine, and i mean in the high millions of bottles, whereas the Australian consumer market cannot even use the amount of wine that the US buys in one order.

Another massive factor is taxes, GDP (per capita), demand, and country geographical location. Basically the government decides what to tax and how to tax it to a point where it is still considered by the population to be worth paying the price it is listed.

There are so many factors to pricing that goes beyond the obvious that it sometimes makes no sense, and trust me I'm not defending this, i hate that shit here is more expensive but unfortunately thats how it is!
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