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Author Topic: Will GST cut stop cross border shopping?
SmellyDeposit
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posted 30 October 2007 07:57 AM      Profile for SmellyDeposit        Edit/Delete Post  Reply With Quote 
To add some perspective to how fast this latest GST cut will eliminate cross border shopping lets have a look at sales taxes in the United States.

I live close to the US Border and buy based on price. Wherever it's cheaper is where I buy it. Sometimes that is in Canada but most of the time it is in the US

The Washington State tax rate + local county (Skagit county?) sales tax is ~ 8.4% It varies by county but is nowhere near BC's rate of 13%.

On top of that the selection and quality of goods is generally equal or better, and because there is no currency/distribution price mismatch like the Canadian Retailers are working thru right now prices are generally lower. At any rate checking pricing is very easy these days via the internet.

Short story: This isn't going to slow down cross border shopping at all. Not even close. More nonsense from Flaherty, but your results may vary depending on where you live.

Gas Prices

US

Bellingham Wa. this morning: 2.93 US gallon Google Gas Price Converter: 74.5 cents CAD litre

Canada

Fraser Valley BC ~ 1.00 litre

Will a 1% GST cut mean anything to cross border shoppers? Don't think so.

For me and the millions of other Canadians who live close to the US border this is just more CONservative smoke and mirrors

=================================================

Washington State Sales Taxes

Canadian Provincial Sales Taxes

Google Gas Price Converter - US gallons in USD to litres in CAD


From: Sometimes here, sometimes over there | Registered: Oct 2007  |  IP: Logged
500_Apples
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posted 30 October 2007 08:44 AM      Profile for 500_Apples   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
There's just no chance a GST cut will manage to mkake up for the difference. Cars, books, groceries, electrical appliances, computing equipment, clothing, et cetera are routinely 40% cheaper in the United States. The problem is an issue of corporate gouging, and of lack of competition in Canada. It has little to do with sales taxes.
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Sven
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posted 30 October 2007 09:36 AM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by 500_Apples:
There's just no chance a GST cut will manage to mkake up for the difference. Cars, books, groceries, electrical appliances, computing equipment, clothing, et cetera are routinely 40% cheaper in the United States. The problem is an issue of corporate gouging, and of lack of competition in Canada. It has little to do with sales taxes.

Are the prices really that much higher in Canada? A "lack of competition" could lead to "corporate gouging" but is there, in fact, a widespread lack of competition in all of those industries in Canada? I have a hard time believing that.

If there is significant competition between various companies, such that there are many alternative suppliers, it's nearly impossible for a company to "gouge" consumers because there's going to be another company ready to reduce prices slightly to drive up sales significantly.

A good example is Best Buy and Circuit City. Because if the intense price competition between those two companies, they are making razor-thin margins on their products. They sure aren't "gouging" the consumer.

So, why wouldn't that same phenomenon apply to Canada?

If prices are really that much higher in Canada, there must be something else going on (much more regulation, higher corporate taxes, and other burdens) that result in higher prices to consumers.

[ 30 October 2007: Message edited by: Sven ]


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
500_Apples
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posted 30 October 2007 09:46 AM      Profile for 500_Apples   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Sven:

Are the prices really that much higher in Canada? A "lack of competition" could lead to "corporate gouging" but is there, in fact, a widespread lack of competition in all of those industries in Canada? I have a hard time believing that.

If there is significant competition between various companies, such that there are many alternative suppliers, it's nearly impossible for a company to "gouge" consumers because there's going to be another company ready to reduce prices slightly to drive up sales significantly.

A good example is Best Buy and Circuit City. Because if the intense price competition between those two companies, they are making razor-thin margins on their products. They sure aren't "gouging" the consumer.

So, why wouldn't that same phenomenon apply to Canada?

If prices are really that much higher in Canada, there must be something else going on (much more regulation, higher corporate taxes, and other burdens) that result in higher prices to consumers.

[ 30 October 2007: Message edited by: Sven ]


Sven,

Corporate taxes are lower in Canada. It is personal income and sales taxes which are higher here. The overall cost of business is lower. Lower corporate taxes, less health insurance to pay, lower wages. The minimum wage is higher in Canads, but it's less relevant in the USA due to higher employment.

Why do people of a right-of-center focus continuously argue that the cost of goods is linear with the cost of business? "The business will pass on its costs to the consumer". That's woefully simplistic... there may be some theoretical backing but that's irrelevant due to the empirical contradiction. Take long distance calling. The price to call long distance dropped stratospherically with the advent of competition. It clearly had little to do with the cost of business before, and more to do with competition.

The american consumer is simply more demanding than the Canadian consumer. For example, currently, bombardier products cost many tens of thousands of dollars less in the USA than in Canada. So Bombardier ordered its american sellers not to sell to Canadians. Google chat group with links. The same is going on with the auto companies.

As for clothing... why would things made in China be more expensive in Vancouver than in Florida? Think about it.


From: Montreal, Quebec | Registered: Jun 2006  |  IP: Logged
Sven
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posted 30 October 2007 09:57 AM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
So, what do Canadian companies know that hyper-capitalist American companies do not know, such that Canadian companies can (apparently) freely gouge Canadian consumers and while American companies cannot?

It can't be as simple as "Canadian consumers are less demanding".


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
500_Apples
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posted 30 October 2007 10:20 AM      Profile for 500_Apples   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Sven:
So, what do Canadian companies know that hyper-capitalist American companies do not know, such that Canadian companies can (apparently) freely gouge Canadian consumers and while American companies cannot?

It can't be as simple as "Canadian consumers are less demanding".


Why not?

What does Bell or AT&T know in 2007 that it didn't know in 1997, with respect to long-distance rates?

there's more competition, ergo, consumers are more demanding.


From: Montreal, Quebec | Registered: Jun 2006  |  IP: Logged
Sven
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posted 30 October 2007 10:25 AM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
Well, if there's a lack of competition, it's difficult for consumers to be demanding. But, why do you think there is less competition in Canada than in the US?
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Pogo
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posted 30 October 2007 10:37 AM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Sven:

Are the prices really that much higher in Canada? A "lack of competition" could lead to "corporate gouging" but is there, in fact, a widespread lack of competition in all of those industries in Canada? I have a hard time believing that.[ 30 October 2007: Message edited by: Sven ]


One of the rules of oligopolies is that they are very resistant to price changes, particularly price drops. The money is being soaked up by whomever brings it across the border.


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Bacchus
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posted 30 October 2007 11:01 AM      Profile for Bacchus     Send New Private Message      Edit/Delete Post  Reply With Quote 
500 has a point. The deals I can get for cellphones and charges are unreal in the U.S. whereas here they uniformly suck.

And cars for example are so much cheaper in the U.S. than canada that the big 3 have threatened their dealers with loss of their dealership if they sell to canadians in the U.S.

As a result a class action suit in canada is being launched.


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Sven
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posted 30 October 2007 11:04 AM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
Bacchus:

quote:
Originally posted by Sven:
So, what do Canadian companies know that hyper-capitalist American companies do not know, such that Canadian companies can (apparently) freely gouge Canadian consumers and while American companies cannot?

From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Lard Tunderin' Jeezus
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posted 30 October 2007 01:31 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
The price differential has much to do with distribution channels and market size. End of line/cycle products are routinely dumped into the U.S. market, putting more downward pressure on all prices there, and creating the perception that all prices are significantly lower, rather than just sale prices (which are much lower).

Add to that the fact that most consumer hard goods companies no longer have direct relationships with Canadian branches or distributors. Everything comes in through the States (who take their regular cut), is shipped to a Canadian distributor (who take their 10%+), is sold through a marketing agency (who take their 5 to 10 points), and then, finally, it gets to the retailer - at more than the going retail cost south of the border.

BTW, prior to Mulroney's FTA, we had our own distribution channels - ones that imported directly, and as a bonus, provided sales channels for start-up Canadian manufacturers. But the FTA allowed the larger American distribution companies to write contracts that "threw in" rights to the Canadian market for themselves. And that was the end of Canadian-owned distribution channels in Canada.


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Stephen Gordon
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posted 30 October 2007 01:40 PM      Profile for Stephen Gordon        Edit/Delete Post  Reply With Quote 
Will the GST cut stop cross-border shopping? No. An immediate 1% reduction would bring CAD-USD price differentials back to where they were last week. And what with oil prices going up and US interest rates about to go down, that trend isn't going to reverse itself significantly anytime soon.

[ 30 October 2007: Message edited by: Stephen Gordon ]


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mudman
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posted 30 October 2007 02:17 PM      Profile for mudman        Edit/Delete Post  Reply With Quote 
I was in Chicago and priced beer (the most important commodity in the known Universe):

My favourite is Grolsch (spell?) In Chicago it is 10.99 for 12.

Molson Golden, Moosehead and other Canadian beers are that price too.

If you want low quality you can get 30 cans of some beers for 14$. I think that is cheaper than Pepsi.

What are prices in BC and Quebec? etc


From: toronto | Registered: Oct 2007  |  IP: Logged
Stephen Gordon
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posted 30 October 2007 02:20 PM      Profile for Stephen Gordon        Edit/Delete Post  Reply With Quote 
The prices are much higher here in Quebec, but I think a lot of that is tax.
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Lard Tunderin' Jeezus
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posted 30 October 2007 03:50 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Alcohol isn't the best point of comparison. They have cheap booze and cigarettes, we have cheaper prescription pharmaceuticals. It's a values thing.
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remind
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posted 30 October 2007 04:58 PM      Profile for remind     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Lard Tunderin' Jeezus:Alcohol isn't the best point of comparison. They have cheap booze and cigarettes, we have cheaper prescription pharmaceuticals. It's a values thing.


From: "watching the tide roll away" | Registered: Jun 2004  |  IP: Logged
mudman
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posted 30 October 2007 05:03 PM      Profile for mudman        Edit/Delete Post  Reply With Quote 
LTJ: Do beer versus drug prices reflect values? Exactly how do common citizens like me influence prices? Most people I know would value low beer prices over drug price.
From: toronto | Registered: Oct 2007  |  IP: Logged
Pierre Cyr
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posted 31 October 2007 01:21 AM      Profile for Pierre Cyr     Send New Private Message      Edit/Delete Post  Reply With Quote 
Happy Halloween from the finance minister! Lets celebrate the fiscal death of the country as we hand over another round of massive corporate tax cuts to mostly american companies! Meanwhile he placates the little guy with a free pizza every month! Heck why not trade the dental plan for a keg of fucking beer while were at it! Can the liberals balls get any smaller? Oh wait they approve of the tax cut my bad... they even asked for such corporate tax cuts...

So while canadians wait months for the simplest medical procedure (4 months here for an upper gi). So screw the infrastructure that is rotting after 30 years of neglect. Forget education. Heck forget even the still poorly underfunded military. The tory grim reaper is here to gut our future gov of any possibility of funding a new visionary program.

Oh Im shopping across all right... Im 5 min from the border and been doing it for years. Gov says it cant afford to give us a wage hike to adjust for inflation and they still expect us to buy here?

[ 31 October 2007: Message edited by: Pierre Cyr ]


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Abdul_Maria
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posted 31 October 2007 09:00 AM      Profile for Abdul_Maria     Send New Private Message      Edit/Delete Post  Reply With Quote 
"SmellyDeposit"

i had to admire that nom de plum.

when i was in Vancouver it was about 15%. i was glad to pay it, thinking that the money was going to "people stuff" like education & health care.


From: San Fran | Registered: Nov 2005  |  IP: Logged
fellowtraveller
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posted 31 October 2007 09:02 AM      Profile for fellowtraveller     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
The Washington State tax rate + local county (Skagit county?) sales tax is ~ 8.4% It varies by county but is nowhere near BC's rate of 13%.

Show them an Alberta drivers license at the till and you pay nothing in state tax, and I don't remember there being any other local taxes in outlet malls in Bellingham or the big one a bit further south (Everitt maybe)? It is some sort of reciprocity deal with places that have no sales tax.
The Costco parking lots in Edmonton still have plenty of Sakatchewan pickups loaded with large, expensive purchases- an indication that people will travel to save money. . Changing the GST by 1% won't make any dent in cross border shopping when the goods themselves are still so much cheaper.
Makes you wonder just how much Canadian retailers have been bleeding us for.....

From: ,location, location | Registered: Jan 2006  |  IP: Logged
Sven
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posted 31 October 2007 12:08 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
I’ll be derned.

Just did a quickie price check between bestbuy.com and bestbuy.ca for three randomly-selected identical items:

Panasonic 50" Widescreen Plasma HDTV: $2,299.99 in Canada and $1,999.99 in the US (i.e., 15% more in Canada)

Apple - iPod (classic MP3 Player with 80GB* - Silver): $279.99 in Canada and $249.99 in the US (i.e., 12% more in Canada)

A DC14 Dyson vacuum cleaner: $649.99 in Canada and $569.99 in the US (i.e., 14% more in Canada)

Out of curiosity, I looked at the pricing of a couple of my company’s products in the US versus Canada. The very few (of the thousands) of products that I checked, the prices were 5% to 20% higher in Canada. And, we produce in Canada almost all of the products we sell in Canada. I didn’t get into details with the person in our operations group, but she said that it costs more to produce the products in Canada than in the US (hence, the higher price), although it’s still cheaper to produce the products in Canada than to produce them here and incur the shipping costs to transport US-made products into Canada.

Anyway, I’ll have to do some more digging to find out why things appear to generally cost more in Canada.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Sven
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posted 31 October 2007 12:11 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
So, within the context of GST rates, the GST could, apparently, be reduced to ZERO and there could still be a substantial price differential.
From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Sven
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posted 31 October 2007 12:17 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
Also, did a quickie spot check of one item’s pricing at The Source (owned by Circuit City and Best Buy’s biggest competitor) versus Circuit City here in the US:

Apple - iPod (classic MP3 Player with 80GB* - Silver): $279.99 in Canada and $249.99 in the US (i.e., 12% more in Canada).

That differential is identical to the bestbuy.ca versus bestbuy.com differential.


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Sven
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posted 31 October 2007 12:25 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
Hockey ticket prices are a whole different matter...

I can’t remember the exact amount, but I think our company’s tickets (lower bowl) for the Leafs are something outrageous like $200 per ticket and my personal lower bowl tickets for the Wild are $82 per ticket.

But, then, hockey is damned near a religion in Canada, so one shouldn’t expect anything different!


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mudman
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posted 31 October 2007 12:25 PM      Profile for mudman        Edit/Delete Post  Reply With Quote 
Maybe prices reflect what the stores paid 6 months ago when currency was different. For beer wine and spirits the price differences are taxes.

Or: Canadian retailers charge what the market will bear. In the US there may be more alternatives.


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Lard Tunderin' Jeezus
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posted 31 October 2007 12:25 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Makes you wonder just how much Canadian retailers have been bleeding us for.....
As I pointed out earlier, Canadian retailers haven't been bleeding you at all. They've been going bankrupt instead.

Bur the large American retail chains, with their internationally integrated supply chains, have been sucking you dry for years now. They've had no reason whatsoever to charge higher prices in Canada - but they do, at Walmart, and Price Club, and Coistco. And you continue to flock there anyways.

And they don't care which side of the border you show up on.


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Sven
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posted 31 October 2007 12:50 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Lard Tunderin' Jeezus:
As I pointed out earlier, Canadian retailers haven't been bleeding you at all. They've been going bankrupt instead.

Bur the large American retail chains, with their internationally integrated supply chains, have been sucking you dry for years now. They've had no reason whatsoever to charge higher prices in Canada - but they do


The Source closes 62 unprofitable stores in Canada in 2007.

It's not like "large American retail chains" can charge whatever they want...and that Canadians have no choice but to pay inflated prices. In fact, it’s quite the opposite. The “large American retail chains” are fiercely competing with each other (and with Canadian chains) to drive prices ever lower.

My company is no more profitable in Canada than it is in the US (even though we charge more in Canada) because our costs are proportionately higher in Canada.

No, I’m guessing that there’s something systemic—something that is unrelated to the (presumably evil) intentions of businesses (i.e., higher taxes, more costly regulations, more worker protections)—that increases the cost of doing business in Canada (and, hence, higher prices for you). Otherwise, if the companies could simply “gouge” consumers with high prices, there’d be no unprofitable chain stores (American or Canadian).

If that’s the case, then people shouldn’t complain about higher prices (they are simply paying the costs associated with a more activist government—relative to the US).

As they say, there’s no free lunch.

[ 31 October 2007: Message edited by: Sven ]


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Lard Tunderin' Jeezus
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posted 31 October 2007 12:59 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
No mystery at all there - tiny stores, in tiny towns, used to primarily supplying componentry and cables, failed at attempting to move higher-end electronic merchandise.

The Circuit City model simply didn't map well onto the Canadian Radio Shack operation.


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Michelle
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posted 31 October 2007 01:01 PM      Profile for Michelle   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
I have heard that part of it is higher shipping costs in Canada than the US. Is there anything to that? That it costs a lot more for companies to get stock shipped to Canada than it does to the US?

Still seems to me like a pretty steep difference to me, though. That can't explain it totally.


From: I've got a fever, and the only prescription is more cowbell. | Registered: May 2001  |  IP: Logged
Stephen Gordon
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posted 31 October 2007 01:18 PM      Profile for Stephen Gordon        Edit/Delete Post  Reply With Quote 
The slow 'pass-through' of exchange-rate movements to consumer prices is one of those things for which we really don't have a good explanation.

And it works the other way, too: when the CAD was tanking, prices here didn't rise nearly as much as what a depreciating exchange rate would suggest.


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500_Apples
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posted 31 October 2007 01:22 PM      Profile for 500_Apples   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Michelle:
I have heard that part of it is higher shipping costs in Canada than the US. Is there anything to that? That it costs a lot more for companies to get stock shipped to Canada than it does to the US?

Still seems to me like a pretty steep difference to me, though. That can't explain it totally.


Does it cost more to ship a chinese product to vancouver than to florida?


From: Montreal, Quebec | Registered: Jun 2006  |  IP: Logged
mudman
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posted 31 October 2007 01:26 PM      Profile for mudman        Edit/Delete Post  Reply With Quote 
As Vancouver is closer it should cost way less.
Maybe the opening of the Northwest passage will reduce costs to Florida from China.

From: toronto | Registered: Oct 2007  |  IP: Logged
500_Apples
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posted 31 October 2007 01:37 PM      Profile for 500_Apples   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by mudman:
As Vancouver is closer it should cost way less.
Maybe the opening of the Northwest passage will reduce costs to Florida from China.

And raise relative costs in Canada, as Canada will have to pay for environmental cleanup on waters we will have no international right to regulate.


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Sven
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posted 31 October 2007 02:51 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
From my perspective, I don’t care from where I purchase a product, as long as I get the best price (unless product-related service is an issue, then I take that into account when choosing a seller). So, for example, I purchase a lot of new and used books from both Canadian and American booksellers and I really don’t care where they are located geographically.

If consumer product prices are higher in Canada than in the US, then why don’t more Canadians simply purchase more products over the Internet from US-based sellers? If I have something shipped from Toronto or New York, the shipping cost is usually about the same (unless it’s a large or heavy item that is more sensitive to shipping cost differences).

Also, in the US, the only sales tax that I have to pay is from sellers who are geographically located in Minnesota. So, amazon.com, for example, only charges me for the item price and shipping (or no shipping at all if I buy more than $25 at a time). Bestbuy.com, on the other hand, charges me sales tax because they have stores located in Minnesota (and they are headquartered here). If Canadians purchase items on the Internet from US sellers, is GST added to the price?

Personally, I think the Internet is a great boon for consumers because it intensifies price competition among sellers.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Lard Tunderin' Jeezus
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posted 31 October 2007 04:57 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Sven, as a Canadian, I have to say that your perspective is less than useless here. It is arrogant and offensive.

Take a look in the mirror. You are the ugly American that the world hates with good reason.


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Bacchus
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posted 31 October 2007 05:48 PM      Profile for Bacchus     Send New Private Message      Edit/Delete Post  Reply With Quote 
As a Canadian, in general I feel the same as Sven. Except the internet also allows me to buy more progressively than I otherwise could, with powells.com for example
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Michelle
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posted 31 October 2007 05:52 PM      Profile for Michelle   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by 500_Apples:
Does it cost more to ship a chinese product to vancouver than to florida?

I don't know. But it's possible that, since the population density in the US is many times the density in Canada, that distribution centres and exporters in Florida might be importing 10 or 20 times as many units as ones in Vancouver, and you know how it goes - the bigger the bulk order, the cheaper the unit.

Also, there are things that are manufactured in the US (e.g. book publishing for instance) that might cost considerably more to ship into Canada.

Again, these are just guesses. I have no idea if this is valid or not because I don't know enough about importing and exporting and shipping and stuff. I just don't have the industry knowledge.


From: I've got a fever, and the only prescription is more cowbell. | Registered: May 2001  |  IP: Logged
Michelle
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posted 31 October 2007 05:54 PM      Profile for Michelle   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
LTJ, not necessary. I don't think Sven's post was out of line. If you disagree with him, feel free to state why.
From: I've got a fever, and the only prescription is more cowbell. | Registered: May 2001  |  IP: Logged
Lard Tunderin' Jeezus
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posted 31 October 2007 06:13 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Let's just say that I don't think that bankrupting the Canadian retail sector is a constructive suggestion - very hard to take from stupid fellow Canadians, and intolerable from a citizen of the country causing and most benefitting from the situation.
From: ... | Registered: Aug 2001  |  IP: Logged
bliter
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posted 31 October 2007 07:32 PM      Profile for bliter   Author's Homepage        Edit/Delete Post  Reply With Quote 
quote:
The Source closes 62 unprofitable stores in Canada in 2007.

Not too much mystery here that these Radio Shack-cum-The Source stores should be closing. We don't fix and build things much anymore. The TV, radio or toaster go on the blink and are tossed out and replaced with new.

Canada's smaller population is trotted out as one of the reasons for larger mark-ups. It's pure BS and greed, with government complicit (and taking its cut) at all levels - aided much, of course by our own wimpishness.


From: delta | Registered: Sep 2007  |  IP: Logged
Sven
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posted 31 October 2007 07:43 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Lard Tunderin' Jeezus:
You are the ugly American that the world hates with good reason.

Why, because I shop for the lowest price?

Go fuck youself, Lardass.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Lard Tunderin' Jeezus
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posted 31 October 2007 07:56 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Thanks for proving my point.
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Sven
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posted 31 October 2007 08:19 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
So, I take it that you, Lard Ass, don't shop for the lowest price?

That makes you not only a provincial nationalist, but also a moron.

Pay more. Get less.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Frustrated Mess
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posted 31 October 2007 08:37 PM      Profile for Frustrated Mess   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
That would depend on what is important. You see, Sven, for me what is important is community, neighbourhood, and maintaining a high quality of life. I am willing to pay more for that by shopping local and purchasing goods and services from my neighbours ensuring my dollars remain in circulation in the community.

On the other hand, if you don't care at all about community or neighbourhood, the environment, the future, and find all your emotional and physical needs are met through the collection of a future landfill contribution, then, I suppose, you are right.

Shop 'till you drop.


From: doom without the gloom | Registered: Feb 2005  |  IP: Logged
Sven
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posted 31 October 2007 08:57 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Lard Tunderin' Jeezus:
Add to that the fact that most consumer hard goods companies no longer have direct relationships with Canadian branches or distributors. Everything comes in through the States (who take their regular cut), is shipped to a Canadian distributor (who take their 10%+), is sold through a marketing agency (who take their 5 to 10 points), and then, finally, it gets to the retailer - at more than the going retail cost south of the border.

It would appear that your understanding of business is strictly limited to pulling shit out of the “business” end of your Lard Ass. But, even when it comes to excrement, it's painfully obvious you don't know the difference between shit and shinola.

You are claiming that a product's cost to Canadian retailers is "more than the going retail cost south of the border". That is so laughable that you would be embarrassed if you understood what you were claiming. And, since you’re not embarrassed...well, even you should get the picture.

If a product's retail price in the US was $250 (and, hence, according to your claim, at least that much in cost to a Canadian retailer) and if a Canadian retailer was only selling it for $280 (one of my examples above), the Canadian retailer would go out of business in one day. Retail gross margins (look up the term yourself, bright boy) are, of necessity, significantly greater than that (they have to be—or, again, the retailer wouldn't last a single day).

But, how did you arrive at your conclusion in the first place? Easy answer: You don’t know anything about product distribution. Zilch. Zero. So, you make shit up...all the while sounding righteously indignant.

Brilliant.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Sven
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posted 31 October 2007 09:06 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
FM, it depends, I suppose, on what you are shopping for. Do you feel better about paying 15% more for an iPod (or the computer you're reading this on) because it helps your "community"? Probably not.

Now, if it's locally-grown produce, I see you're point.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
munroe
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posted 01 November 2007 12:11 AM      Profile for munroe     Send New Private Message      Edit/Delete Post  Reply With Quote 
It's not just the product, it's the business. I've never seen the inside of a Walmart myself. I have seen the devastation Walmart's arrival can reek on businesses, particularly in small communities.
From: Port Moody, B.C. | Registered: Jun 2007  |  IP: Logged
Sineed
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posted 01 November 2007 02:37 AM      Profile for Sineed     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Most people I know would value low beer prices over drug price.
As a pharmacist, I've had American customers burst into tears when they see how extremely cheaper prescription drugs are here in Canada. And we're talking identical product.

Though what about the environmental impact of all that cross border shopping? All these people in idling vehicles, waiting at the border.


From: # 668 - neighbour of the beast | Registered: Dec 2005  |  IP: Logged
Abdul_Maria
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posted 01 November 2007 05:20 AM      Profile for Abdul_Maria     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Michelle:
[QB]I have heard that part of it is higher shipping costs in Canada than the US. Is there anything to that? That it costs a lot more for companies to get stock shipped to Canada than it does to the US?

when i lived in Canada, i shipped a lot of my stuff. i had to fill out customs forms going and coming - one for every box - but only for Canadian customs.

if i had counted that time as money, yes, it costs $$ to get stuff through Canadian customs, shipping in both directions.

but - maybe they're just doing their job ?

getting stuff through American customs, at least at that border - no problem, breeze right through, never heard a word.


From: San Fran | Registered: Nov 2005  |  IP: Logged
Frustrated Mess
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posted 01 November 2007 06:27 AM      Profile for Frustrated Mess   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
FM, it depends, I suppose, on what you are shopping for. Do you feel better about paying 15% more for an iPod (or the computer you're reading this on) because it helps your "community"? Probably not.

Yes, I would feel better about paying that extra 15%. Because I am supporting my community, my neighbours, and my quality of life. I prefer to live in a community with a thriving commercial core, where people meet and find meaning in relationships, surrounded by tree lined streets with porches and where people know one another, than to live in the urban wasteland of big boxes and sprawl.

It is a trade-off. I am prepared to pay more for living in a real community where people matter more than stuff destined for the landfill.

I probably have far less stuff than you, but I would never trade my lifestyle for yours. And that's not to be mean, but just to state a fact.


From: doom without the gloom | Registered: Feb 2005  |  IP: Logged
Sven
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posted 01 November 2007 07:22 AM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Frustrated Mess:
but I would never trade my lifestyle for yours. And that's not to be mean, but just to state a fact.

I don't take it as mean at all.

I grew up in a town of tree-lined streets, a community where everyone knew each other, where kids could freely play anywhere in town, day or night, and parents didn’t have to worry about them because some adult in town would always know what the kids where up to, and local businesses relied on local consumers (and local consumers relied on the local businesses). It was a great place to grow up—but I couldn’t wait to get out of there and get to the anonymity of a large metro area and to a university with 40,000 students (where professors didn’t know my name from Adam). I loved it.

But, I can understand why people like the sense of connectedness with their local community and their neighbors. It provides a sense of belonging, place, and meaning.

Now, nearly 30 years later, I live in an inner-ring suburb of tree-lined streets (and some big box stores), in a very modest house, which is only a ten minute drive from my office in downtown St. Paul (in my hometown, people drove—and still, to this day, drive—more than twice that distance to the next town to work in the local window manufacturing plant).

I also revel in the time I spend at our lake home. It’s on a lake that is three miles outside of the small town where Ms. Sven grew up in. I know a lot of the people there; the merchants, the staff at the little art museum, at the historical museum, and at the local library. I like to hang out at the coffee shop or have breakfast at the Birchwood Café.

Most of my “stuff” is composed of music-related things and books. And, those are my only real important “things”.

And, I have a career that I like very, very much. One for which I’m perfectly suited. I get to learn something new every day, to talk and work with interesting, challenging, and intelligent people, and to try to solve complicated problems.

Most importantly, the love of my life is my best friend and there is nothing I like better than for her and I to hang out together, alone, for a long weekend up north.

So, I, too, like my life and I wouldn’t change places with anyone else. And—and I think this is important for happiness—I don’t envy anyone else.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Red Partisan
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posted 01 November 2007 11:17 AM      Profile for Red Partisan        Edit/Delete Post  Reply With Quote 
I think when old inventories have worked their way through the system we will see prices coming down.

The main reason prices are higher here is higher taxes. Canadians love high taxes, so why are they whining about high prices?


From: Toronto | Registered: Feb 2007  |  IP: Logged
kropotkin1951
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posted 01 November 2007 11:58 AM      Profile for kropotkin1951   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Red Partisan:
I think when old inventories have worked their way through the system we will see prices coming down.

The main reason prices are higher here is higher taxes. Canadians love high taxes, so why are they whining about high prices?


Gee any actual links to back up this mythology you believe in?

From: North of Manifest Destiny | Registered: Jun 2002  |  IP: Logged
Pogo
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posted 01 November 2007 12:17 PM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
The main reason that prices are any level is because people willingly pay that price (and if it is lower, because someone is willing to sell at that price).

The Canadian price will stay high until people are unwilling to pay it. It has already hit the wall with books (bet you they regret printing both currencies on the back cover now). It will hit the wall in other industries when consumers start refusing to pay the current prices.

1% GST reduction will have no effect in almost all buying decisions. When was the last time you changed stores to save 1%?


From: Richmond BC | Registered: Aug 2002  |  IP: Logged
mudman
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posted 01 November 2007 12:37 PM      Profile for mudman        Edit/Delete Post  Reply With Quote 
Some companies are lowering prices:

http://tinyurl.com/3aanxr


Sorry

Fixed

[ 01 November 2007: Message edited by: mudman ]


From: toronto | Registered: Oct 2007  |  IP: Logged
remind
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posted 01 November 2007 12:57 PM      Profile for remind     Send New Private Message      Edit/Delete Post  Reply With Quote 
mudman, please fix your long link, as it gave sidescroll here and on TAT
From: "watching the tide roll away" | Registered: Jun 2004  |  IP: Logged
Ursa Minor
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posted 01 November 2007 02:42 PM      Profile for Ursa Minor     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by mudman:
LTJ: Most people I know would value low beer prices over drug price.

Two questions:

1. Are you saying that there are doctors out there prescribing beer?

2. When can I get an appointment?


From: Vancouver, British Columbia | Registered: Sep 2006  |  IP: Logged
Frustrated Mess
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posted 01 November 2007 03:47 PM      Profile for Frustrated Mess   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
So, I, too, like my life and I wouldn’t change places with anyone else. And—and I think this is important for happiness—I don’t envy anyone else.

I am please to hear that, Sven. But the truth is that your quality of life, my quality of life, the quality of life that most of us take for granted is unsustainable and will come crashing down around us if what we value most is cheap. And I think for far too many, that is indeed the case.

From: doom without the gloom | Registered: Feb 2005  |  IP: Logged
glacier76
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posted 01 November 2007 10:58 PM      Profile for glacier76     Send New Private Message      Edit/Delete Post  Reply With Quote 
So, back to the question...

I don't think anyone ever thinks about GST when it comes to cross-border shopping. When people complain about the variation in US and Canada pricing on a book or greeting card, those prices are pre-GST. So, if the US price is still lower, people will cross the border.

Although, I personally could not imagine doing it. The lineups are way too long. If I happen to be in the US for another reason (watch the Seahawks, visit family, etc), I'll do a lot of shopping. Otherwise, forgeddaboutit.


From: Vancouver | Registered: Dec 2004  |  IP: Logged
Doug
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posted 01 November 2007 11:25 PM      Profile for Doug   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by glacier76:

Although, I personally could not imagine doing it. The lineups are way too long.

With e-commerce, there's no need to actually go. Apparently the post office is quite busy with packages coming from US websites.


From: Toronto, Canada | Registered: Apr 2001  |  IP: Logged
arborman
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posted 02 November 2007 08:21 AM      Profile for arborman     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Doug:

With e-commerce, there's no need to actually go. Apparently the post office is quite busy with packages coming from US websites.



From: I'm a solipsist - isn't everyone? | Registered: Aug 2003  |  IP: Logged
arborman
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posted 02 November 2007 08:22 AM      Profile for arborman     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Doug:

With e-commerce, there's no need to actually go. Apparently the post office is quite busy with packages coming from US websites.


That's the key right there. Amazon will obliterate any attempts to float high book prices here. Ditto anything else available online.


From: I'm a solipsist - isn't everyone? | Registered: Aug 2003  |  IP: Logged
Stephen Gordon
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posted 02 November 2007 08:33 AM      Profile for Stephen Gordon        Edit/Delete Post  Reply With Quote 
Just remember to go to Amazon.com. The Amazon.ca prices appear to be higher. Strange but (apparently) true.
From: . | Registered: Oct 2003  |  IP: Logged
arborman
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posted 02 November 2007 10:30 AM      Profile for arborman     Send New Private Message      Edit/Delete Post  Reply With Quote 
I tend to buy used books as a rule (sorry authors, too poor), but yes, stick to USian sites for the non. Especially avoid Canadian sites of USian companies - no need to pay more for no reason whatsoever.
From: I'm a solipsist - isn't everyone? | Registered: Aug 2003  |  IP: Logged
Lard Tunderin' Jeezus
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posted 02 November 2007 10:31 AM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by arborman:

That's the key right there. Amazon will obliterate any attempts to float high book prices here. Ditto anything else available online.


That's right. Large American corporations are your friends and allies, working with your best interests in mind. Give them all your money.

Your neighbours would only waste it on food anyway.


From: ... | Registered: Aug 2001  |  IP: Logged
Lard Tunderin' Jeezus
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posted 02 November 2007 11:30 AM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Sven:
But, how did you arrive at your conclusion in the first place? Easy answer: You don’t know anything about product distribution. Zilch. Zero. So, you make shit up...all the while sounding righteously indignant.

Brilliant.


I have more than a decades experience in distribution of both computer and consumer electronics, as a matter of fact.

What do you think the retailers margin is on an iPod? Ask your local retailer, on either side of the border - They'll tell you it's significantly less than 10%, generally 5 to 7%, once shipping is factored in.


From: ... | Registered: Aug 2001  |  IP: Logged
arborman
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posted 02 November 2007 11:30 AM      Profile for arborman     Send New Private Message      Edit/Delete Post  Reply With Quote 
As I said in a later post, I tend to buy used books (from my neighbour's book store, actually).

But on occasion my neighbour's book store does not carry a book that I want/need. The choices are to pay Chapters (hardly local or friendly) a bogus markup because it is 'Canadian', or to buy it online.

Regardless, Amazon and others exist outside my own actions, and will have an impact on the price of books. Which was my point.


From: I'm a solipsist - isn't everyone? | Registered: Aug 2003  |  IP: Logged
500_Apples
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posted 02 November 2007 11:45 AM      Profile for 500_Apples   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Lard Tunderin' Jeezus:
I have more than a decades experience in distribution of both computer and consumer electronics, as a matter of fact.

What do you think the retailers margin is on an iPod? Ask your local retailer, on either side of the border - They'll tell you it's significantly less than 10%, generally 5 to 7%, once shipping is factored in.


They charge 5% more than what it costs them?

Considering labour costs, real estate, electricity, et cetera, it doesn't seem like it would be possible to break even in such a configuration.


From: Montreal, Quebec | Registered: Jun 2006  |  IP: Logged
Lard Tunderin' Jeezus
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posted 02 November 2007 12:03 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
They just pray they can sell a few over-priced accessories along with it. No one makes a living out of selling iPods other than Apple.
From: ... | Registered: Aug 2001  |  IP: Logged
Sven
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posted 02 November 2007 12:13 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by 500_Apples:

They charge 5% more than what it costs them?

Considering labour costs, real estate, electricity, et cetera, it doesn't seem like it would be possible to break even in such a configuration.


It's because he's confusing "gross margin" with "net profit".

When one is talking about the cost of a product (either from a manufacturer or from a distributor), the difference between that cost and the retail resale price is the "gross margin" (which has to be something in the neighborhood of 40% to 60%, when divided by the retail resale price). After subtracting all other costs (salaries, taxes, insurance, rent, utilities, capital depreciation, interest expense, and a long list of other expenses), one is left with (hopefully) "net profit".

Here’s what I said earlier:

quote:
Originally posted by Sven:
If a product's retail price in the US was $250 (and, hence, according to your claim, at least that much in cost to a Canadian retailer) and if a Canadian retailer was only selling it for $280 (one of my examples above), the Canadian retailer would go out of business in one day. Retail gross margins (look up the term yourself, bright boy) are, of necessity, significantly greater than that (they have to be—or, again, the retailer wouldn't last a single day).

From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Lard Tunderin' Jeezus
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posted 02 November 2007 12:18 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
That is what you said earlier. And you were wrong.
From: ... | Registered: Aug 2001  |  IP: Logged
Sven
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posted 02 November 2007 12:20 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
The bottom line is that a substantial reduction in the GST rate (even to zero) won’t eliminate cross-border purchases if the US price of a product is significantly lower than the price of that same product in Canada. And, a stronger CAD only magnifies the incentive to make cross-border purchases.
From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Sven
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posted 02 November 2007 12:25 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Lard Tunderin' Jeezus:
That is what you said earlier. And you were wrong.

Don't take my word for it. Look up the definition of "gross profit" versus "net profit". You'll find that "gross profit" is based on the product's cost.

If you think that a product's cost is 95% of the retail resale price, you know less about this than I thought you knew.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Lard Tunderin' Jeezus
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posted 02 November 2007 12:29 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Come back and apologize after you've spoken to your local retailer.

quote:
The bottom line is that a substantial reduction in the GST rate (even to zero) won’t eliminate cross-border purchases if the US price of a product is significantly lower than the price of that same product in Canada. And, a stronger CAD only magnifies the incentive to make cross-border purchases.
And thanks to free trade making us a tertiary appendage of the American market rather than the centre of our own, such price discrepancies are now structural.

Canadian prices were also generally higher than American prior to the FTA, but at the time it was primarily due to tariff barriers and hidden taxation - with the financial difference accruing on this side of the border, rather than to the south of us.

[ 02 November 2007: Message edited by: Lard Tunderin' Jeezus ]


From: ... | Registered: Aug 2001  |  IP: Logged
Sven
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posted 02 November 2007 12:43 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Lard Tunderin' Jeezus:
Come back and apologize after you've spoken to your local retailer.

That's akin to saying: "Come back and apologize after you've looked at a sunset" when you're claiming that the sun sets in the east and I'm claiming it sets in the west.

I know what we sell our products for to retailers and it ain't 95% of their retail resale price. We wouldn't sell a single case of product it we tried to sell it to retailers for even 80% of the retail resale price.

But, you won't look up Retail Business 101 principles yourself and, so, you will continue to believe that the sun sets in the east.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Michelle
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posted 02 November 2007 12:44 PM      Profile for Michelle   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
I haven't read this thread since my last post in it. Sven, you were WAY out of line up there. I stepped in when he did it, and then afterwards you start it up again? Not even remotely okay.

Anyhow, looks like you're both being civil to each other now, which is good. Please keep it that way.


From: I've got a fever, and the only prescription is more cowbell. | Registered: May 2001  |  IP: Logged
Lard Tunderin' Jeezus
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posted 02 November 2007 12:48 PM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
BTW, the iPod was one of your examples, one for which there aren't many viable alternatives - so it made a good example for me.

Let me point out that I did not claim that retailers are surviving on 5% margins generally. I only showed that, as I had mentioned, in some cases Canadian costs are the same as American retail. I also wanted to illustrate that Canadian retailers are not 'gouging' - they are trying to survive on margins as low and often lower than their American counterparts.

The excess profits that we know are being taken are being taken elsewhere.


From: ... | Registered: Aug 2001  |  IP: Logged
Pogo
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posted 02 November 2007 01:01 PM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Average margins change from industry to industry due to the selling patterns and costs associated. For example Jewelry stores have very high margins as their turn rate will be very very low. Grocery stores can have lower margins because they have a high turn rate.

Within industries individual lines or products will have widely different margins. For example exclusive lines will often have higher exchange rates to reflect the reduced competition. Common lines that are price competitive will have lower margins as everyone has to sharpen their pencils or lose sales. A 5% margin (difference between landed cost and selling price) is very low but for items like Ipods it is probably necessary as buyers are extremely price sensitive.

I should also add that LTJ knows this stuff inside out.

[ 02 November 2007: Message edited by: Pogo ]


From: Richmond BC | Registered: Aug 2002  |  IP: Logged
bliter
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posted 02 November 2007 05:16 PM      Profile for bliter   Author's Homepage        Edit/Delete Post  Reply With Quote 
I'll take all the taxes the governments want to give me back but I see a lot of fuss being made over a penny - and there seems a lot of trust that the retailers are going to pass it on.

Here's what I see: The $10.00 item for which I paid $10.50 will now cost $10.40 - just like I picked a dime off the floor on my way out.


From: delta | Registered: Sep 2007  |  IP: Logged
Sven
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posted 04 November 2007 07:26 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
The idea that Canadians should buy from Canadian companies rather than from American companies, even if product prices are significantly higher, reminds me of the introduction of Japanese vehicles into the US market in the 1970s and 1980s. There was a huge American backlash and a "Buy American" campaign. But, American consumers received a huge benefit by having the option to purchase Japanese vehicles. Prior to the introduction of Japenese vehicles, it would be a miracle if an American car got even close to 100,000 miles before falling completely apart. And, even prior to completely falling apart, they were mobile rust buckets.

I think that the Japanese competition was the best thing that happened to American industry...and the American consumer.

Today, one pretty much has to pay a bit of a premium to get a Japanese car (relative to a comparable American product). But, I'll pay that premium because the quality is measurably better (Consumer Reports consistently shows Japanese cars have greater reliability). American vehicles have gotten much, much better, quality-wise (to the benefit of all consumers) but I think they still lag behind the Japanese companies.

It seems to me that consumers, nearly all of whom have limited budgets, should purchase the best product they can find at the lowest price, regardless of where the product is made or where the corporation is located that sells it (American, Canadian, European, Asian, etc.).


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Fidel
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posted 04 November 2007 08:28 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Sven:

I think that the Japanese competition was the best thing that happened to American industry...and the American consumer.

Today, one pretty much has to pay a bit of a premium to get a Japanese car


You can say that again. Who wants to pay for auto worker's health insurance premiums paid to private insurance companies? I certainly wouldn't. Private health insurance bureaucracies are putting more than just U.S. car companies at a competitive disadvantage according to CEO's in the states. A quirk of geography may eventually lead to a "single payer"(Cover the kids ears and cover the flower pot, it's socialized medicine by any other name) health care system in the U.S. No wonder they want concrete walls erecting at the borders!!! And someone will do it because it's more efficient and less costly than private enterprise duplication of the exact same services over and over again with exorbitant CEO salaries to be paid and blue chippers to cater to etc etc What a shamozzle.

And this report suggests that all that corporate downsizing and ruthless efficiency is creating a nation of Charlie Chaplin like worker-drones in North America who are unhappy with their two and sometimes three lowly paid, low cognition jobs to make ends meet. It sounds like the conservative nanny state isn't all what it's cracked up to be.

[ 04 November 2007: Message edited by: Fidel ]


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Sven
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posted 04 November 2007 08:52 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Fidel:
And this report suggests that all that corporate downsizing and ruthless efficiency is creating a nation of Charlie Chaplin like worker-drones in North America who are unhappy with their two and sometimes three lowly paid, low cognition jobs to make ends meet.

"Modern Times" was, in my opinion, one of Chaplin's best films. If you haven't seen it, I recommend it.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Sean in Ottawa
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posted 05 November 2007 12:36 PM      Profile for Sean in Ottawa     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Pogo:
Average margins change from industry to industry due to the selling patterns and costs associated. For example Jewelry stores have very high margins as their turn rate will be very very low. Grocery stores can have lower margins because they have a high turn rate.

Within industries individual lines or products will have widely different margins. For example exclusive lines will often have higher exchange rates to reflect the reduced competition. Common lines that are price competitive will have lower margins as everyone has to sharpen their pencils or lose sales. A 5% margin (difference between landed cost and selling price) is very low but for items like Ipods it is probably necessary as buyers are extremely price sensitive.

I should also add that LTJ knows this stuff inside out.

[ 02 November 2007: Message edited by: Pogo ]


I've studied this in my time as well and this description is right on. We talk about those low margin items as "lost leaders" -- in a grocery store, for example, it will be often milk which is often sold at a loss in order to bring the customers in (they know the price of milk and assume deals on other things if milk prices are low so stores sell milk below margin and other items above to make the profit).

Another issue that is not raised often is the question of the currency component to cost and price. For example -- a lot of stink was made about books. US books are calculated in US dollars where they are printed and then are converted to Canadian dollars. In those cases then you should expect to get the US dollar price because it is a real price based on real costs. However, if you look at a Canadian produced book, made from Canadian paper, printed here the Canadian price is the real one and the US price is a conversion from a Canadian reality. You should not expect the US price based only on a previous exchange rate to now be valid just because it is cheaper. The book cannot be produced for that price now that the US dollar is worth less in Canadian funds. That US price was based on what the Canadian publisher expected after conversion. When you are in a Canadian bookstore looking at a Canadian published book please bear that in mind and don't ask your independant bookstore to take a hit or pressure the Canadian publisher to take a hit on a conversion price that was never realistic and completely unrepresentative of the real costs the publisher and bookstore face.

Yes, I have raised the price of shipping here a few times. This was THE reason I stopped publishing books. This factor is huge when comparing to the US as they ship using a bookrate from their distribution centres to their stores. Canada has a mind-numbingly stupid policy with respect to shipping and shipping books in particular. We have no bookrate and our general shipping rates are designed to subsidize the high volume shippers at the cost of the low volume shippers (they don't do that in the US or anywhere else that I am aware of). When this policy was brought in hundreds of small publishers went out of business and the remaining ones had to increase the prices on the books either to pay it out of their share if they included shipping or to allow the retailler a greater share out of which to cover shipping. Obviously consolidation was also necessary which made independent publishers have to give up or give over their inventories to large distributors (that can just as easily go bust themselves taking down the publishers).
This is a situation Canada should be ashamed of. I will always rememerb the few weeks notice we got for an effective 1000% (no typo) increase in the cost of shipping books from February 1993. (Thanks for that Brian, you scum of the earth who also brought the tax on books-- seems some people do not want to see Canadians be informed except by right-wing controlled media.)

[ 05 November 2007: Message edited by: Sean in Ottawa ]


From: Ottawa | Registered: Jun 2003  |  IP: Logged
Sven
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posted 05 November 2007 01:41 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Sean in Ottawa:
I've studied this in my time as well and this description is right on. We talk about those low margin items as "lost leaders" -- in a grocery store, for example, it will be often milk which is often sold at a loss in order to bring the customers in (they know the price of milk and assume deals on other things if milk prices are low so stores sell milk below margin and other items above to make the profit).\

There's a big difference between a few loss-leaders to bring people into a retail shop and saying that all products in a retail shop have a cost that averages 95% of retail value.

A retail shop cannot survive if the products' cost, on average, represent 95% of the retail price.


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Sven
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posted 05 November 2007 01:51 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
Here is some data regarding retail gross margins as a percentage of retail price (the average gross margin percentage is about 30%). That average gross margin percentage is understated for most hard goods because of the very low gross margin percentages for automobiles, gasoline and groceries. Outside of those categories, most retail gross margin percentages are between 30% and 40%.

quote:
Originally posted by Lard Tunderin' Jeezus:
What do you think the retailers margin is on an iPod? Ask your local retailer, on either side of the border - They'll tell you it's significantly less than 10%, generally 5 to 7%, once shipping is factored in.

In any event, no retail sector has gross margin percentages anywhere near 95%.

[ 05 November 2007: Message edited by: Sven ]


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Red Partisan
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posted 05 November 2007 02:27 PM      Profile for Red Partisan        Edit/Delete Post  Reply With Quote 
There is a clear disconnect between 'show' economic data (which shows how well investors are doing) and 'real' economic data (which shows how the non-investors are doing)

Jobs are being lost, and unemployment goes down. People are swamped in debt, and interest rates go down.

If Canadian mining companies pull gold out of Ecuador, that counts as Canadian economic growth. It has little to do with how well Canadians are doing.

Those who were serious about economics for the benefit of human beings might start compiling 'real' economic statistics, to be contrasted with those posted by corporations and aggregated by Statistics Canada. I think these 'real' statistics would be shocking.


From: Toronto | Registered: Feb 2007  |  IP: Logged
Lard Tunderin' Jeezus
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posted 19 June 2008 06:08 AM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
The 'Red' Star hypes market solutions, and ignores structural issues:
quote:
Consumers already have the power to force down prices; they simply need to exercise it. Some consumers are already doing that by boycotting Canadian retailers and shopping in the U.S. The majority, however, will continue to suffer as long as they willingly pay what retailers ask. Their market power lies in their determination to refuse to pay an unjustified "Canadian" premium and their readiness to walk away from purchases when retailers won't slash the price.

From: ... | Registered: Aug 2001  |  IP: Logged
Sean in Ottawa
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posted 19 June 2008 02:17 PM      Profile for Sean in Ottawa     Send New Private Message      Edit/Delete Post  Reply With Quote 
You need an explanation why things are more expensive in Canada? Ask Canada Post.

Sample rates - these are over the counter public rates off websites but you will get the idea quickly:

Ottawa-Toronto 5lb small package prices depend on speed: $9.48-21.22
New York to Washington 5lb small package prices depend on speed: $1.89 (if it is a book) 7.29 guaranteed two day delivery up to $12.95 next day delivery.

Ottawa to New York based on speed $16.84-79.80
New York to Ottawa: $2.14 (small packet rate)- 58.80 for all bells and whistles.

So as you can see we in Canada get screwed by our post office. Shipping in this country is ridiculously expensive. (Goes up for remote areas as we do not subsidize remote areas any longer with high-volume inter-city mail).

Consider all the implications of these price differences that average more than double but can go up to 500% difference for the same service.

Then consider what it is like for on-line businesses in Canada. By the way, this is also why Canadians have a bad reputation as people who rip off buyers for shipping on ebay- because those folks in the US simply can't believe how insane our postal policies actually are.

Years ago I was told that the issue was we needed to charge more to the smaller volume shippers in order to subsidize deep below-cost discounts to the higher volume shippers- some kind of reverse Robin Hood theme going on.

Anyway, the shipping costs alone explain price differentials between Canada and the US so the next time you hear Harper lecturing Canadian distributors on giving better prices based on the exchange rates ask the PMO what its thoughts are on the screwed up postal service that we, the people of Canada, actually own.

Frig- don't get me started....

[ 19 June 2008: Message edited by: Sean in Ottawa ]


From: Ottawa | Registered: Jun 2003  |  IP: Logged
Pogo
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posted 19 June 2008 02:33 PM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
What business would use Canada Post for delivery when you can use Purolator? Better rates, home delivery, state of the art tracking.
From: Richmond BC | Registered: Aug 2002  |  IP: Logged
Sean in Ottawa
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posted 19 June 2008 02:53 PM      Profile for Sean in Ottawa     Send New Private Message      Edit/Delete Post  Reply With Quote 
1) Using a courier cross border causes you to risk having clearing house charges- only UPU members (national post offices) clear goods internally as practice.
2) Purolator is not at all cheaper than Canada Post- We have an account with them at the office, I have had an account with them and done direct comparison. If you send few packages of high value purolator is not a bad option but if you send many packages of lower per-unit value purolator charges will exceed the value of the goods realy quickly.
3) Purolator is owned by Canada Post.
4) In a way the very idea of comparing a courier to a post office should tell you something. Most countries have both courier service for priority speed and secure shipping options and basic mail for lower value transactions. Canada has a post office that so badly wanted to be a courier that it bought one but still competes with its courier arm for sophisticated high-priced shipping options rather than providing basic low-cost mail like most people in the rest of the world enjoy.

A post office in most parts of the world is significantly lower than any courier- in Canada it is just a little lower for poorer service while retaining the same basic market as a courier leaving the regular parcel mail business unserviced. People in Canada hvae done without parcel mail for so long that they can't even tell the difference between courier services and mail services for parcels- either in price or expectations.
In Canada we do need a post office that acts like one and delivers a basic postal service for packages as well as lettermail.


From: Ottawa | Registered: Jun 2003  |  IP: Logged
Sven
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posted 19 June 2008 03:04 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
I agree with Sean in Ottawa that Canadian shipping prices are very high (at least relative to US rates), at least with respect to books. I purchase a lot of used books and usually pay only about $3 to $4 for shipping when purchasing them from a US book dealer. But, when I purchase them from a Canadian book dealer, the rates are much, much higher than that.
From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Sean in Ottawa
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posted 19 June 2008 03:55 PM      Profile for Sean in Ottawa     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Sven:
I agree with Sean in Ottawa that Canadian shipping prices are very high (at least relative to US rates), at least with respect to books. I purchase a lot of used books and usually pay only about $3 to $4 for shipping when purchasing them from a US book dealer. But, when I purchase them from a Canadian book dealer, the rates are much, much higher than that.

Nuts that the US ones are international shipment and ours are local yet still much higher.
I buy on ebay and notice that I do have to pay much more to buy from Canadians and I absolutely hate Canada Post and the excuse for a Canadian government we have had since 1993 when this stupid policy was brought in.


From: Ottawa | Registered: Jun 2003  |  IP: Logged
Sven
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posted 19 June 2008 04:00 PM      Profile for Sven     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Sean in Ottawa:

Nuts that the US ones are international shipment and ours are local yet still much higher.
I buy on ebay and notice that I do have to pay much more to buy from Canadians and I absolutely hate Canada Post and the excuse for a Canadian government we have had since 1993 when this stupid policy was brought in.


Is Canada Post subsidized on top of the higher rates to users?


From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005  |  IP: Logged
Sean in Ottawa
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posted 19 June 2008 04:15 PM      Profile for Sean in Ottawa     Send New Private Message      Edit/Delete Post  Reply With Quote 
There is no government subsidy to Canada Post. The only subsidy is from low volume shippers who pay extra so higher volume shippers -- including bulk admail-- get their stuff sent below cost. Usually this means Canadian owned small business and retaillers get screwed so Canada Post can service big foreign-owned companies.

The big ones screw us because they can and the small Canadian ones because they have no choice.


From: Ottawa | Registered: Jun 2003  |  IP: Logged
Pogo
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posted 19 June 2008 10:30 PM      Profile for Pogo   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Sean in Ottawa:

2) Purolator is not at all cheaper than Canada Post- We have an account with them at the office, I have had an account with them and done direct comparison. If you send few packages of high value purolator is not a bad option but if you send many packages of lower per-unit value purolator charges will exceed the value of the goods realy quickly.

Our analysis is the exact opposite. Our Purolator rates are way lower. There is a wild card in that if the customer is outside the Purolator regular service network the charges go up. When you are talking internet sales there is a high likelihood that a higher proportion of customers will be from outside the service area (being far away from stores is what pushes them to the net).


From: Richmond BC | Registered: Aug 2002  |  IP: Logged

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