Understanding Canadian Product Pricing: Comparing US and Canadian Prices

[Chef Gilles]

It was a holiday yesterday so I guess I had too much time on my hand. I decided to compare canadian PC prices with our US neighbours. I new there was a different because of the shipping and duty taxes but there does not seem to be a consistancy in pricing. I didcided to write HO to have an explanation on how it's calculated. I haven't gotten a response yet but just wanted to share with you what I sent on the HO. Here it is:


"I have a pricing question that I would like explained if possible. I took some time and compared all the US prices on PC products with ours. I understand our prices are higher since there is duty involved as most products are shipped from the US but what I can't understand is why isn't there a percentage chart being followed or is there? Is there a chart that exists? I can't understand why, for example, the Silicone Crown Pan and Cupcake Pan in the US are the exact same price at $35 and here in Canada, we pay $4 more for the Cupcake Pan ($39 and $43). If weight and packaging are an issue, shouldn't we be paying less for the Cupcake Pan as the weight is approximatly the same but you can fit many more Cupcake Pans in a same size box that the Crown Pan. Is there guessing going on to find out how much Canadians would pay for such and such a product? The price difference with the new products are minimal but the older stuff still have a very big difference in pricing. It would be so much easier to sell the Pizza Cutter at $9.75 than at $18, the Food Chopper at $29.50 rather than $40, the Apple Wedger at $12 instead of $18, the Stainless Mixing Bowl at $74.50 instead of $96.50 and the Garlic Press at $16 instead of $26.50. I suggest prices be revised for the Spring/Summer 2009 catalog. Just a thought!!!

 

[chefallison53]

Isn't there always a price difference because of the dollars worth compared to Canada? Like on books... it is always more then our prices.

 

[Crys Hall]

The dollar is almost on par so that shouldn't be an issue anymore!

 

[stefani2]

i thought HO had sent out an email (or maybe it was on CC) about comparing US and CDN prices??? It was QUITE a while ago - IF my memory serves me correct. I thought it just basically stated that products were move expensive to ship to Canada d/t duties and they also factored in that the CDN dollar HAS NOT always been on par with the US dollar

IS my memory serving me correct?????

 

[Crys Hall]

Yes they did either e-mail that to us, or put in on CC (can't remember which either) BUT they are NOT consistent and that's part of the problem! Since it's been on par for a while now they need to re-think this!Did they get back to you Chef Gilles??

 

[Chef Gilles]

Haven't heard a thing yet but I'm patient. I want to see what they say about the silicone pans. They're the same price in the states and I can't figure out why not here in Canada even if it would be more...

I think there is guessing work going on...

 

[lovenpc]

There is a full explanation on consultants corner about why pricing in the US is different than Canada....it has more to do than just the dollar. Below is part of what is on CC, if you want to read the full thing, go under Managing Your Business then Canadian Pricing Questions.

Question: Some retailers are dropping their prices to be at parity with the US. Is TPC planning on doing this?
The Pampered Chef does not price its Canadian product offerings based on US prices, and the exchange rate is only one part of any pricing study. Rather, we calculate prices using the following information:
•competitive market information gathered at retail
•duties (see below for more information)
•freight costs between the US and Canadian distribution facilities (rising due to fuel cost increases)
•exchange rates
•product costs
In particular, Canadian duties account for the majority of the price differential between the US and Canadian prices, and in some cases exceed it.
This puts The Pampered Chef in line with the Canadian Direct Sellers Association’s position (see attached DSA document).
Question: I keep hearing that duties push the prices of products up. Why?
Duties are calculated for all products imported into the country. These Canadian taxes make doing business in Canada much more expensive than doing business in the US. The duty rates vary based on a number of different criteria, including materials used, the country in which they are manufactured, and the way a business operates within a country.
For The Pampered Chef, these duty rates are a substantial cost. In fact, despite higher prices than the US, in many instances, we are unable to recover the full cost that these duties add.
Consider these quotes from noted economists from a recent article in The Canadian Press:
“Historically, there has been a perception that there are only price differentials between Canada and the US because of a different currency exchange, but there are a lot of other underlying costs that tie into that,” says Elizabeth Evans, Director of the Ted Rogers School of Management at Ryerson University in Toronto.*
John Williamson, federal director of the Canadian Taxpayers Federation – “Our economy has more costly regulations and higher taxes and until this is changed, Canadians cannot expect price parity with the US, which has a more dynamic, lower taxed, less regulated and therefore less costly market. As such, Canada cannot have radically higher minimum wages, higher business taxes and more costly regulations and suppose prices will be the same on both sides of the border – it is an economic impossibility.”*

Hope this helps
Danielle

 

[peichef]

There is a full explanation on consultants corner about why pricing in the US is different than Canada....it has more to do than just the dollar. Below is part of what is on CC, if you want to read the full thing, go under Managing Your Business then Canadian Pricing Questions.

Question: Some retailers are dropping their prices to be at parity with the US. Is TPC planning on doing this?
The Pampered Chef does not price its Canadian product offerings based on US prices, and the exchange rate is only one part of any pricing study. Rather, we calculate prices using the following information:
•competitive market information gathered at retail
•duties (see below for more information)
•freight costs between the US and Canadian distribution facilities (rising due to fuel cost increases)
•exchange rates
•product costs
In particular, Canadian duties account for the majority of the price differential between the US and Canadian prices, and in some cases exceed it.
This puts The Pampered Chef in line with the Canadian Direct Sellers Association’s position (see attached DSA document).
Question: I keep hearing that duties push the prices of products up. Why?
Duties are calculated for all products imported into the country. These Canadian taxes make doing business in Canada much more expensive than doing business in the US. The duty rates vary based on a number of different criteria, including materials used, the country in which they are manufactured, and the way a business operates within a country.
For The Pampered Chef, these duty rates are a substantial cost. In fact, despite higher prices than the US, in many instances, we are unable to recover the full cost that these duties add.
Consider these quotes from noted economists from a recent article in The Canadian Press:
“Historically, there has been a perception that there are only price differentials between Canada and the US because of a different currency exchange, but there are a lot of other underlying costs that tie into that,” says Elizabeth Evans, Director of the Ted Rogers School of Management at Ryerson University in Toronto.*
John Williamson, federal director of the Canadian Taxpayers Federation – “Our economy has more costly regulations and higher taxes and until this is changed, Canadians cannot expect price parity with the US, which has a more dynamic, lower taxed, less regulated and therefore less costly market. As such, Canada cannot have radically higher minimum wages, higher business taxes and more costly regulations and suppose prices will be the same on both sides of the border – it is an economic impossibility.”*

Hope this helps
Danielle

I get the impression that Gilles has read this info but is curious as to the discrepancy between products. Why are some products maybe 10% more here and others 33% more? Why are the 2 silicone pans the same price in the US & 2 different prices here?


I'm curious if you get a response Gilles. I have wondered the same thing. On some items our prices are somewhat similar to the US. On others we have a huge price leap on this side of the border.

 

[Chef Gilles]

You read me correctly Charity! I'm not concern about the dollar parity. I just want to understand the pricing of items that I sell. The new items don't have a big difference in price it's the older items that make me wonder... and those silicone pans??? I'll share the response once I get it.

 

[Mr. Pampered Chef]

I to would be interested in the answer.

 

[PChefPEI]

My guess is they'll just refer you to CC....or maybe not. I'm interested to see the answer as well!

 

[stefani2]

I think most of it has to do with Product Cost - if I remember correctly from what my ED told me.

 

[ShellBeach]

I'm interested, too!

duty rates vary based on a number of different criteria, including materials used, the country in which they are manufactured, and the way a business operates within a country.


From what I can see, products from China & Taiwan have a lower duty rate than USA or Germany; and metal is at a higher rate than plastic.

 

[stefani2]

i don't think there will be a satisfactory answer. :yuck:

 

[Crys Hall]

No there probably won't be a satisfactory answer but if enough Canadian Consultants & buyers complain then maybe they'll listen and price things more appropriately.

 

[Chef Gilles]

Refering to post #13, this would not explain the silicone pans' pricing ! They must be coming up with an answer because they usually don't take that much time to answer my questions. I will share as soon as I get one.

 

[Mr. Pampered Chef]

So are we still waiting for an answer?

 

[peichef]

So are we still waiting for an answer?

my best guess is yes! I don't think we'll get an answer. This is going to be a very similar discussion as the one you have with a car dealer when you ask about US pricing. (A discussion we've been having a lot in our house lately.)

 

[stefani2]

I am curious to hear the answer - if you get one.

I just think that, even considering all the factors that come into play with CDN products, the pricing on certain products STILL isn't gonna make sense.

 

[Veevahchef]

this is more than 2 weeks old... Im thinkin there was no answer!!??

 

[peichef]

veevachef, I'm guessing you are correct -lol.total highjack here, but WHEN THE HECK ARE THEY GOING TO UPDATE OUR OUTLET!!(deep breath) end highjack!

 

[Chef Gilles]

Sorry to have kept youposted but I haven't gotten a response back. I'm sending another copy of my email to HO. In respect I do believe they should respond. If not, I'll send it to Janice ! I promise to keep you poated fellow cheffers...

 

[christinaspc]

I couldn't imagine paying 18.00 for a pizza cutter. That is horrible I feel for you girls and guys in Canada having that big of difference in prices comparied to ours.

 

[TinaOuellette]

That' s why I find it so hard to sell some of our product as they all say it's too expensive. But our product is way better quality.

 

[Chef Gilles]

Well, it is Tursday, October 16 and I finally got an answer from HO - after 2 emails of requesting an answer. I'm not sure it's an answer but it is a sign of life. They informed me by email that they would be contacting me on Friday, October 16 (should be 17) after 3 o'clock CST to discuss it further with me. What can't they tell me in an email is beyond me... Hope I'm here when they call.... I'll keep you posted guys !

 

[stefani2]

I don't think they have a good answer why - that is why they are hesitant.

 

[krystle_lj]

what ended up happening with this???

 

[Mr. Pampered Chef]

Ok so the answer is (drum roll please...) take it away Chef Gilles..

 

[Chef Gilles]

Sorry for the delay guys.....bottom line....Canada is Canada and USA is USA. I was quite disappointed that this matter was not really handled professionally...not to my standards anyway...........talk about attitude!!!

 

[peichef]

Sorry for the delay guys.....bottom line....Canada is Canada and USA is USA. I was quite disappointed that this matter was not really handled professionally...not to my standards anyway...........talk about attitude!!!

Are you kidding me!?!?!?

THAT was the answer we waited months for!?! Wow. I agree 100% with you -- a) it's not really an answer. b) it's pretty blunt. I'm shocked and very, very disappointed with that response.

BTW -- to whom did you pose the question? Was it an email to PC in the US or did you call Cdn home office?? I'd be curious if the Cdn office would give the same answer.