LV Prices

Re: LV Prices

Rob Lee


>Reg -

You caught me leaving for vacation...but will answer this quickly, as it's a somewhat slanted post...

Canadian prices, by and large will be flat this year - US pricing will increase.

Costs have only gone up - in some cases, by more than 100% over the past year... something I've posted about before.

Canadian prices are not too high... US prices are too low.

Watch out for for any product where the cost of metal is a significant component of the product cost... those will go up the most (i.e. hardware, heavy Power Tools etc. )

Also for the record - our Canadian pricing (overall) has dropped each year, for the past three years.... that ride's over too....!

Cheers -

Rob

Re: LV Prices

Reg in Toronto


>Hello Robin,

You say you are able to predict exchange rates this year. How come these exchange rates are always in favor of the same side?? You talk about costs going up, won't they go up on both sides of the border. Why will the raw cost of metal affect only one side? You say that canadian pricing has dropped for the past three years, well the exchange rate has gone in that direction for three years so no suprise there. Canadian prices have been much lower in the US for the past three years even though you have all the costs of exporting them. Anyway have a great vacation!

Re: LV Prices

john in KS


>Rob,

And when can we expect to see the price increases? I have a couple of items that will not get purchased until mid August. Will that be too late?

Thanks,

john

Re: LV Prices

Moses Yoder in White Pigeon, MI


>I make a lot of purchasing decisions based on whether the product I am considering was made in the USA or not, because I happen to live in the USA. If I can find products that are of similar quality, I am willing to pay quite a bit more for American made products just because I am partial to the USA. I think Rob has discussed this before, that he has to keep his prices in the US very competitive because a very large percentage of his business is from the US.

Come on guys...

Scott Burr in Ben Lomond, CA


>Let the poor guy go on vacation.

Agreed...

Dave Thompson


>It seems more appropriate to follow up using Rob's e-mail address, or Lee Valley's customer service.

mystified

bill tindall


>Is Reg saying that Canadian prices should be dollar- for- looney identical to US even though exchange rate is 1.13 Canadian dollars/loonies per US dollar?

Anyway, one doesn't run a business, based strictly on exchange rate. One prices by what the market will pay. If Mexicans are willing to pay 100 pesos for dovetails saws made in Mexico and someone in the US wants part of that market, then the US manufacturer must sell an equivalent product for 100 pesos, or less. If the US mfg can't sell for that price they don't go after that market. If they can make more money selling in Mex than the US for 100 pesons they don't leave money laying on the table by selling for less than 100 pesos.

Bottom line- a well run company is going to charge you what you are willing to pay. The buyer establishes price, costs determine availability.

I had all this explained to me by a marketing manager for a large corporation when I wondered why Clifton planes cost more in England than in the US, exchange rate adjusted. Clifton doesn't have LN to compete with in the UK.

Re: mystified

Thom D


>"Is Reg saying that Canadian prices should be dollar- for- looney identical to US even though exchange rate is 1.13 Canadian dollars/loonies per US dollar? "

No he is saying if you make that adjustment and there is a huge disparity, and the product is made in canada there should be an adjustment. "He" he probably also saying that if this continues he will simply bring it in from the US. Last year Canadian Oneway lathes were about 3 grand more expensive in Canada at the factory door, oh, and they didn't have any Canadian stock but you could buy it over the border for less and on demand. I'm not complaning I;m more agile than that.

"Anyway, one doesn't run a business, based strictly on exchange rate. One prices by what the market will pay. If Mexicans are willing to pay 100 pesos for dovetails saws made in Mexico and someone in the US wants part of that market, then the US manufacturer must sell an equivalent product for 100 pesos, or less."

That is closer to the problem if LV prices go up for whatever reason and US prices just keep trucking along then maybe I will buy a miller welder rather than more LV, because it seems unfair and uncompetitive

"Bottom line- a well run company is going to charge you what you are willing to pay. The buyer establishes price, costs determine availability."

Not entirely, fairness is an issue, particularly if you make it one by doing things like giving people refunds when you drop a price, whether they want one or not. I'm not saying it is unfair (see my post above), but at the very least they will have to explain it, which I am sure they will do.

"I had all this explained to me by a marketing manager for a large corporation when I wondered why Clifton planes cost more in England than in the US, exchange rate adjusted. Clifton doesn't have LN to compete with in the UK."

That's not the reason. A more probable reason is they don't realize that in this world they do have the US plane makers to compete with, increasingly, and they just think it is business as usual, with all the regular tea breaks. Keep in ming the VAT tax is another big wack, built into the price

Re: LV Prices

Thom D


>What's happening to Can manufacturing in general is that the US dollar is tanking globally, even against the pretty tied-in Canadian dollar which has risen close to 50 percent in buying power over the last several years. Keep in mind that Canada is the most export driven country in the G8, not sure where we stand these last 5 years, but it used to be 4 times more export dependant than the US.

If a Can business's inputs are non-US, then the falling US dollar does not immediately lower their cost of production. In that situation the tool that costs 100 dollars Can to make, still costs that much. By the end of the year with the average devaluation of the US dollar, Canadian catalog prices are higher than US prices, which is not LV policy as I have ever heard it explained. And Canadian customers are angry about it, as well they should be, which isn't to say that LV is getting rich off of it. They are stuck getting paid in American notes that aren't worth as much as they used to be, because they set their prices annually (?) and stick with them. If LV raises their US prices they will loose market share which isn't helping any of us either.

Ironically I just wrote the LV service department pointing out that when a person logs onto the Canadian LV site what they get is the US site with US dollar pricing, even though there is a mirror site in Can dollars (and other currencies). Talk about rubbing our noses in it. Apparently it's that way to stay.

Anyway, for those of you Canadians taking vacations in the US to exploit the newly cheap dollar, just buy your LV purchases in Canada, whenever it's convenient to you, then when you go to the states buy them again there, by internet to kill the tax, and return your Can purchases when you get home, but not until you have used your Canadian receipts to cross the border with your US purchases. This hurts all customers proportionately, just remember they are mostly American.

I'm kidding! I don't take US vacations anymore.

Re: mystified

Deirdre Saoirse Moen


>It's also true that a company (of sufficient size) that does consistent business with a given country will have some sort of hedge against currency fluctuation.

It's not like this question hasn't come up in reverse when the Canadian dollar was suddenly weaker -- it just didn't come up with LV.

Re: LV Prices

mikew


>"Ironically I just wrote the LV service department pointing out that when a person logs onto the Canadian LV site what they get is the US site with US dollar pricing, even though there is a mirror site in Can dollars (and other currencies). Talk about rubbing our noses in it. Apparently it's that way to stay."

Hi Thom,

Just curious. I know if I use a link someone gives and their currency is set to Canadian, then my computer remains using Canadian currency until I select the US dollar again.

Are you saying you cannot select Canadian currency and have it remain that way between sessions? Do note that if you select a link where the poster has their computer set to US, then that will reset yours to it as well if you click on the link.

Or has this changed? Wait, I know. I'll try it. Yep, it remains set to Canadian *unless* I use a link from a forum wherein the user had US set as their currency.

Now, I think the LV web designers ought to make it part of one's account set up as a preferred currency selection. Then if a link is visited the currency wouldn't be set/reset via the link but rather the cookie info.

Take care, Mike

Re: mystified

Pam Niedermayer - Austin, TX


>There is a very simple hedge/solution for dealing with currency exchange rates: a true multinational company, being one that has significant operations in multiple countries, if it can afford to do so, need not repatriate revenue. The big computer companies have been financing local operations with local revenue for years and years, probably since currencies were allowed to float in the early '70's. Now there are some tax issues that may obstruct, but most of these companies have found ways around the more egregious tax problems.

Pam

Re: LV Prices

david.marcus.brown


>Reg,

We're really lucky to someone in Rob's position take the time to listen to us and our questions. But, he can't control the exchange rates any more than he can control the cost of materials or labor. Also, I don't think this is the right forum to discuss politics and exchange rates. I can tell you're unhappy about something in the Canadian / US relationship but is Rob really the person you should be asking?

Re: Agreed...

david.marcus.brown


>or a Canadian economics professor . . .

Re: LV Prices

Thom D


>I doubt Rob is scared of answwering that question. As far as I know they have a perfectly good answer and it isn't a question of politics in the least. For every person who actually voices an agressive customer srvice question there are a lot more people who are angry about it but quiet, which in this case is just too bad.

Re: mystified

Thom D


>Agreed LV can hedge their US income. Or do a number of other things. I'm not too worried about them. Perusing the business pages, by the cries of pain, I don't get the feeling that the smaller tranche of Canadian businesses are actually doing that, but they may be. The majority of opinion seems to feel that a really low Canadian dollar would be an awful nice thing.

There is also and arbitrage opportunity for Reg.

Don't feel too bad for Reg his buying power for LN stuff is way up.

Re: LV Prices

Brent Smith in Montreal


>To me, the simple answer is, if you don't like the price don't buy the product. I'm no economist, but I have to figure that if there is a difference in price, it's not by any devious design. Can't see a company with such a stellar customer service rep trying to gouge a few pennies out of it's customers. Just my .02.

Re: LV Prices

Thom D


>I completely agree with you. From which logically follows:

a) No devious design, therefore there is a good explanations.

b) No need to buy a product if the price is too high, but LV might prefer to mitigate that result if the "too high" in question is based on a perception of value or fairness that is easily countered.

c) Stellar customer service reputation therefore they probably know how to handle this problem, probably don't mind engaging it, probably have more to loose by not doing so, probably can use the opportunity. After all, what is more useful to LV, the opportunity to say a few nice things about a plane, or to defend the whole brand. Tough one considering the vacation plans. I'm trying to get away (for New Brunswick) myself, so I sympathize.

Customer service is what the customer defines as service, not the business. At times it may be "stupid" questions, actually, usually is. Of course there are no stupid question.