Ryan asked ....
Just to add a small footnote, we have an additional issue here; and any border town for that matter. With our dollar being so good right now I find that a lot of Speed and Custom enthusiasts are crossing the border and saving a lot of money. We need to keep that in the back of mind when we talk about pricing.
So I asked Michael at keystone ( National Accounts Manager) ....
Can you explain if you adjust prices for US currency changes? Do you find this cross boarder shopping to be an issue to avoid PST-GST mainly - or do we have issues on US to Cdn currency issues?
Michael writes back ....
Cross border shopping becomes more of an issue the closer our two
currencies get to parity. Often individuals can smuggle something
across the border without paying taxes and duties (something we
obviously can't avoid). We do adjust our prices when there are
fluctuations in the exchange rate. We change it as necessary, which is
usually about 3-5 times a year. Right now we are using 1.156, and as of
today the exchange rate is 1.139. What most people fail to recognize
that you can't actually buy money (cash or Visa) at the bank rate. The
buy rate is usually about 4% higher. So, we are actually cheaper than
the (actual) exchange rate. Also, where are they going to go if they
have a problem? Where will they get the support for the product? If
they forgot to get a part are they going to order it from the US? The
cross border issue will always be there (and internet too). As a bricks
& mortar business you need to convince your customers why buying from
you is better, even if it costs more money. Some people will always be
willing to spend $50 in gas and a half a day to save $50 of the price of
their manifold. They'll also tell all their friends what a good deal
they got. Most people only do this once or twice until they realize
it's not the better way.
Does this help? The fact that Keystone is using a 'fair' US currency exchange rate is appreciated. Comments appreciated.
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to me, it doesn't even matter if the prices are adjusted to reflect the current exchange rate, we still get dinged large on purchase price right out of the box becuase we are canadian. I have seen several examples and one that comes to mind is a lift kit i recently priced out, out cost on the kit was 1100.00 and the customer bought it out of the states for $900 canadian taxes exchange in. not a very fair pricing scheme to me.
ReplyDeleteshawn