LV ripping off Canadians?!

I think Rob said that he's getting hosed

Andrew F in Australia

>Just a point of semantics - I can't tell if how firmly your tongue is planted in your cheek here.

However, not to worry - I agree with your comment on Lee Valley - they're a reputable and reliable vendor, who state their price in a catalogue and then live with the resulting loss when they underestimate the amount of USD fall.

Swings and roundabouts - next year, the Canadians may be getting stuff cheaper.

Cheers,

Andrew

LV is the best retailer I've ever dealt with

Ian in Sydney

>Thinking back to every retail (and internet) transaction I can remember, and I not confining myself solely to WW tools, Lee Valley has to be the best organisation I've ever dealt with.

In my experience, Lie Nielsen's customer service is as good as LVs, and some other suppliers (both WW and other items) come pretty close, but the vast majority are lost in the dust behind LV's range of product and standard of customer service.

To refute Marc's specific point, there will always be some amount of arbitrage when the same item is traded in two places, in this case the US and Canada. When establishing the right price for an item LV must guess the likely exchange rate when the goods are paid for, and the likely US-Canadian exchange rate when they are sold. I respect LV's practice of standing by the price they set when they print the catalogue.

As to a live exchange rate, I'd rather occasionally pay a little more than what the current exchange rate might suggest is the proper equivalent price, because the alternative of finding the price of an item varied on a daily or hourly basis would be a nightmare.

Ian

Re: LV ripping off Canadians?!

Rob Lee

>Well Mark -

I'm not about to discuss the in's and out's of our our business in a public forum - but the exchange rate is only one factor that determines price for a market.

A few others are:

1) taxes (much lower in the US)

2) fulfillment costs (also much lower in the US)

3) distribution arrangements - where we MUST buy from a Canadian distributor, yet compete in the US market against product where our competition pays a lower cost - we must charge a lower price in the US (or sell none).

Keep in mind too - that our Canadian operation is both retail and mail-order, and has an entirely different cost basis...

It's an apples to oranges comparison.

If you find pricing is excessive compared to other retailers in the same market - then vote with your feet...I think you'll find we're more than competitive.

Rob

Very, very firmly. :)

Pam Niedermayer - Austin, TX

>

A solution perhaps...

Todd Hughes

>Well couldn't you just send them a can. money order made out in US dollars that you have bought for payment and take advantage of the US discount? I get these all the time from Can. ebay buyers......I will say right up front that I have never bought anything from LV and doubt I ever will, being interested in old tools it just ain't the kind of stuff I buy, but I think they are a stand up company run by a real gentleman and have never heard anything to have me think anything different.....including this latest.......Todd

Windfall for Yanks!

Don Thompson - Cutler Ridge, Florida

>I figured that was the deal, Rob.

Wait a minute, (light goes on) I had better buy a bunch of planes before the August catalog is printed!

Want to Have some Fun

Ben Knebel

>Marc---Rob very patiently tried to explain the price differences when you run a business that operates internationally. He is correct in his explainations and it is patently unfair to take an exchange rate on any given day---work the diff. and shout unfair.

As an example and a fun exercise compare car prices---and for more fun---compare car prices on cars built here and sold both in the US and Canada. You'll find that the price in the US is almost always cheaper than what we pay here and sometimes by thousands of dollars.

There are a lot of reasons for that but one of the big ones is the size of the market and competition. The US market is bigger and cars tend to sit on the lots for less time in the US than in Canada--it costs money to have inventory that sits on the shelf and so the price reflects the sitting time in Canada. Volume plays a role---if I sell 100 of a model in Canada then I know I will sell 1000 of that model in the US. I can afford to take say only 25% margin in the US while in Canada I might need 30% particularly when I know the car will sit less time on my lot in the US than in Canada.

I have a problem a little different than Rob's---I price in US dollars only which makes my Canadian customers angry but as US dollars is the international trade currency and as 98% of my business is in the US I price for my customer base.

My Cdn. customers are never upset if the Cdn. dollar is strong and gains on the US dollar which has been the case over the last 14 months or so but woe to me when the Cdn. dollar goes down. BTW--I keep my products priced at the US market price which hurts me when the CDN dollar goes up--I lose 18% on every US transaction compared to what I used to get 1 1/2 years ago--but in order to remain competitive I choose not to raise my US prices.

And then there is competition---any given product in any given market may or may not have competition---if the competition is fierce you may be forced to sell at a lower price in order to survive in that particular market. Is that unfair to the folks in the higher priced market---no not really--you could choose to buy in the lower priced market but then you might be surprised as to what shipping will cost you, taxes, brokerage, duty maybe etc etc.. You will often find that it will cost you at least as much and sometimes even more to buy cheap in the lower market and have the product shipped to you.

And then there are the corporate tax rates at state and country levels and luxury taxes like VAT in the UK.

In short there are many factors governing the price of a product in any given market and at any given time. Rob's pricing policies seem more than fair to me.

Best regards

Ben

Yes Pam, I agree with You....

Jim Shaver Oakville, Ont.

>Hio Pam,

Thank you for saying what I was thinking...A title that starts with an agressive tone is not well appreciated. I would say that it automatically puts people reading it on edge...and puts the person or comapny being accused on an unlevel position.

I agree, this forum does not have that nature about it and I would expect at minimum that Marc apologize for his initial post's tone.

If you speak with vendors, it's hard enough to make a living, dealing with the issues that Rob and Ben K. mentioned also add a great deal of clariety to the issues that we do not always apreciate as consumers.

take care,

Jim

Apology from me

Ted Owen, Administrator

>I'm guessing some of you may have emailed me concerning this thread--which, as poor luck would have it, started just after I checked the forum for the night.

Ellis changed over the email accounts to a new server about 10 days ago, and my woodcentral.com account has not worked since. Probably has a few hundred emails by now, none of which I can download.

So for the time being, if anyone needs or wishes to contact me email, please use my personal email address:

ted_owen@msn.com

Thanks, and sorry if I've missed anything from anyone.

Best, Ted

Here here well put

Ian in Sydney

>

Re: LV is the MOST honorable company I have dealt

sawdustdan

>They made me a customer for life when I got a $4 refund check cus they lowered the price of a product about 3 weeks after I purchased it.

Re: LV ripping off Canadians?!

Dave Keay

>Rob, I think we all understand the vagrancies of the Cd$ vs the US$. I am curious why companies like LV or Oneway ( personally I find the difference in pricing with Oneway very significant against the US$ ) don't hedge the Cd$ against the US$ and perhaps minimize these differences on an annual basis?

Re: We're getting hosed?! You've got some nerve. :

Jeff Mackay

>Using dynamic exchange rates is fine for a web site, but how do you use them in printed catalogs?

Setting prices once a year and sticking with them is a very common practice. I work for a much larger company, and we do exactly the same thing. Sometimes it works to our benefit, sometimes it doesn't. We have the ability to use up-to-the-minute exchange rates but choose not to, even if it means we lose some profit. Stability of the prices are important to our customers. If they budget X for a machine, they'll probably find a reason to go to the competition if the price turns out to be 20% higher two months later.

Like Rob, we sell globally. Our pricing managers are trained to set prices based on market conditions, not on exchange rates. If the price we receive for an item in a particular market results in margins that are too low, we will discontinue the item in that market rather than change its price.

I'd guess that Lee Valley would lose more customers (and profits) if they constantly change prices.

Don't compare apples to oranges. If you'd like to get better prices, move to an area that receives those better prices. But you better do it quickly--rates could change the other way at any time. The other alternative of course is to buy from a competitor.

Jeff

Re: We're getting hosed?! You've got some nerve. :

Pam Niedermayer - Austin, TX

>Jeff, I guess I'm too accustomed to buying internationally and noting the exchange rates into our pitiful dollar. I was also an econ major. I'm not trying to dictate how LV sets prices nor to pretend the pricing process is simple. After all, I built and sold software products internationally for a lot of years. Talk about voodoo pricing. I am voicing my preference that they make the appropriate amount of money today to get up tomorrow and do it all over again.

What's more, I'd be perfectly happy if LV quoted prices in $CDN only and let it go at that. I can't think of another foreign retailor who quotes $USD prices, except for Tony Murland who includes shipping in his $USD prices.

Of course, if things keep going the way they're trending here, I'll be moving to Canada anyhow, might even actually immigrate.

Pam

Re: Want to Have some Fun

Norman (Metcalfe, Ont.)

>Ben...

Same here..

I price my wares in US dollars for the most part.

I have received some flak over this, but my market is almost 98% USA.

I want to say that that I've also been taking a beating like yourself over the improving exchange rate vi a vis the Canadian - US Dollar.

Pricing products against a constantly changing exchange rate is a moving target. I can see how a fixed rate of exchange is sometimes necessary for print advertising and catalogs. As Rob indicates, there are other factors which come into play also.

The scale of the US vs. Canadian market also influence pricing as Ben indicates. Selling higher volume with a smaller margin is often better than low volume and higher profit margins.

The ratio of sales in the US vs. Canada is typically in the order of 10X.

Norman

98% Business in US?

Don Thompson - Cutler Ridge, Florida

>I am surprised by that, as the Canadian population is over 10% of that of the US. I had also thought (although I have no real data to support the conjecture) that there were more woodworkers per capita in Canada.