Canadian Vendor Prices vs. rising Canadian Dollar

[trilinearmipmap]

Our dollar has gone up by about 1/3, from 63 cents U.S. to 84 cents U.S.

Despite this I have seen no corresponding fall in the prices of aquarium supplies, most of which are imported from the U.S.

This is making it more and more affordable to order from U.S. online stores.

When will our retailers get their act together and decrease their prices to account for the rising Canadian dollar?

[Samw]

But if most of the items are made in other countries (like China), what'll more likely happen is that US prices will go up since the cost for US companies will go up. So we would end up paying the same amount when that happens. Right now, US companies are simply bearing the cost in lost profits. I don't expect them to do that much longer if the US dollar stays weak against global currencies.

[StirCrazy]

Originally Posted by trilinearmipmap

When will our retailers get their act together and decrease their prices to account for the rising Canadian dollar?

never, it is very rare that the cost of something will reflect the value of the Canadian buck.. for instance when our buck was 0.62US and you paid 10cdn for a fish, is it costing you anymore now that our buck is 0.83 and that fish is still 10.00 cdn? nope not a cent. the only way our buck means something is in interest rates and over boarder business so unless you are financing that 10.00 buck fish it still isn't costing you more and if you buy that 7.00US fish from across the boarder don't forget the shipping and the other countless bucks for permits ect.. and heck if fish stores do it then I want the price of houses to drop accordingly so I can buy another

Steve

[bluetang]

Talking with the boys at JL's. I brought up the pricing issue in regards to ordering tunze streams and they told me that when it comes to mail order they would probably match Marine depots pricing converted to canadian. I thought that was a good jesture, as I'm sure it hurts there pocket book as some items could have been purchased back a while ago.

[Bryan]

Off topic somewhat, but I have also noticed no decrease in consumer goods and food. Guess when everyone starts flocking to Blaine and Bellingham to shop, only then will retailers start to wake up.

[Murminator]

The way I see it if your going to pay $100 for a pump today your going to pay $100 tomorrow even though the retailers price MAY have gone down, ONLY until one retailer passes the savings on to the consumer and it takes a dent out of another retailers business then he will match in prices.....not that we are seeing that now

But until then the richer get richer ........and the rest set up saltwater

Ill try a stab at this....



ever think that the market in canada has been bearing all it can for the last decade that our dollar has been eating poo, now is like a weight off the shoulders allowing some retailers to pay off some bills.

I know exchange is crazy, if I was paid now for my last aquarium job I would have made $7000 more in profit alone...6-8 month time difference

when I was selling alot of live stock 5-6 years ago I made pretty decent money at it, enough to pay the bills, last year, it wasnt really even worth it, now its kinda worth it again.


no real point to my running on, just think people should look at it from an angle other than "how can I save a buck"

support your local stores, cuz when you need something in a pinch, they will be there for you, unless you dont support them

the markup to overhead in this hobby/business is pathetic

and most of the members on this board have west coast prices, so really folks, quit crying

[trilinearmipmap]

Yeah, OK.

But for big ticket items (I may be getting a Ca reactor) if I can save $250 bucks going with a U.S. vendor I will.

For smaller items no problem buying Canadian. And if Canadian prices are 15-20% higher no problem with that either.

It's when Canadian prices are 1/3 higher or more that I say enough is enough.

[Samw]

Not sure if I got my point through the first time. Its been 10 years since I took International Trade and I've forgotten 99% of it.

But it seems to me that World Currencies are all connected. Just because the exchange rate between US and Canada has increased in favor of Canada, it doesn't mean that the cost of Canadian goods that are purchased from the US must go down. For stuff like produce that are grown in the US, then yes, we can buy more oranges and stuff like that. But most aquarium related stuff like lamps, heaters, pumps, even livestock aren't produced in the US. Most of them are produced in places like Malaysia, Philippines, China, various European countries, Mexico, S. America, etc, etc. The Canadian dollar has not increased against those currencies. Meanwhile, the US dollar has decreased against those currencies. This means that US prices have no choice but to go up or risk losing profits.

Let's take an easy example. Consider a light bulb that is made in Germany. Check out the exchange in the last 2 years.

http://finance.yahoo.com/currency/co...EUR&amt=1&t=2y

Let's assume that a single 250W AB 10K bulb costs $50 Euros to buy from manufacturer in Germany in Dec 2002. It costs the US wholesaler $50 US to buy that bulb based on the exchange rate in Dec 2002. The wholesaler marks it up 50% and sells it at $75US for a gross profit of $25 (50%).

Today, the exchange rate between US/Euro is 0.76. Today, the US wholesaler buys the same $50 Euro bulb and pays $65US to buy it based on today's exchange rate. He sells the bulb for $75 for a gross profit of $10US. Now, factor in costs of operation, and he's probably losing money on the bulb. The only way for the US wholesaler to make money is to increase the price to $97.50US in order to maintain a gross profit of 50%.


Here's the exchange rate between Canada and the US for the last 2 years.

http://finance.yahoo.com/currency/co...CAD&amt=1&t=2y

2 years ago, that $75US bulb costs a Canadian store $120CAD to buy at the US wholesaler. Today, that same bulb (assuming the US wholesaler raises its price to maintain gross margin %) will soon cost the Canadian store $117CAD.

In conclusion, the Canadian store pays about the same price for the bulb even though the Canadian currency rose 30% over US currency. The assumption of course is that the US wholesaler maintains its pricing using a gross markup percentage based on cost of the good. It wouldn't make sense for them not to. When I worked in retail, we always marked up our products based on the cost of the good. I don't see why the US wholesaler wouldn't do the same.

In the short term, yes, Canadians will get a great deal buying goods from the US, until (and that's a given) the US wholesaler raise their prices, which will raise the prices of the US retail stores as well.

[Aquattro]

Sam, I just love your economics lessons!!