Unfair practices by manufacturers -re pricing on products

Started Mar 23, 2013 | Discussions thread
phaedin
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Re: A few factors likely contributing...
In reply to zackiedawg, Mar 27, 2013

zackiedawg wrote:

A few economics 101 reasons that you are likely seeing higher costs for retail items compared to the United States:

1. Canada has strong tariffs and duties in place to protect Canadian manufacturers - the United States has far fewer such tariffs, though are weighing the idea of introducing more. This makes the cost of foreign goods higher on Canada soil than elsewhere where tariffs and duties are lower.

Cameras are duty free as there is no Canadian Manufacturer of cameras to protect - so this does not apply

2. The rise in the Canadian dollar means higher costs to retail companies - what they pay in rent, overhead, employee salary, and operating expenses are higher, as well as local taxes, which means they have to raise prices to the consumer to recoup those expenses.

not sure how you got to this conclusion.

Higher Canadian dollar is bad for exporters as they get less money for their goods, but good for importers as they get more goods for their dollar.

My pay doesnt fluctuate with the exchange rate, so a higher dollar doesnt mean I get paid more. The price of Oil has more effect on prices

3. Though the Canadian dollar has been strong of late, it still doesn't have the long-term economic strength which the US Dollar has had for decades - it will take a while for the Canadian dollar to stay strong and build a trust and reputation as an international monetary trading unit - therefore despite its apparent strength, it is still treated as a smaller player.

Most companies buy in advance, so it can take a little while for exchange rate changes to show up at the till, but usually that would be 6 months at the longest. The Canadian Dollar as been pretty much on par with the US Dollar for about 2 years at least

4. The American economy, due to population size, spending levels, and very competitive retail landscape means more companies want to play in that market, and to do so, must deal with significantly more competition for a slice of the pie - to be able to have strong representation and build reputation in the American marketplace, companies will be much more competitive on their prices to the consumer to build a larger presence and reputation.

The more competitive an economy is for consumer spending, the lower the prices will be for products in that economy...with the American population and relative wealth compared to the Canadian population, ie: more people in sheer volume with lots of money and willing to spend it on consumables and luxury goods, the demand and competition drives the prices down.

You will find that Canadians have more discretionary income then Americans at the moment

Those would be just a few factors to consider as to why something might cost more in Canada than in the U.S. The same factors weigh on the price of consumer goods in every country throughout the world - supply, demand, and available spendable assets.

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Justin
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