Nothing new in today’s post for most people. On the weekend I had my own personal first experience with the difference in price in Canada and the US for an identical product.
My wife and I our buying a new dishwasher and started the search on-line. We decided to buy a Bosch dishwasher. They are well known as one of the premier manufacturers of the quietest dishwashers, also high quality and long lasting. After identifying the model we wanted on the Best Buy web site, it was off to the Best Buy store to complete the purchase, and arrange for delivery, disposal of the old machine and installation.
At the store we learned our search of the web had been the US site of Best Buy in error and the exact same model was $900 in the US and $1800 in Canada. Even with the exchange rate at $0.72 CDN per US $1.00 the overall cost would have been $1250.00. So basically the same product would cost $550 (60%) more in Canada.
Who gets the price difference?
This is an interesting question for me. Does Bosch make an extra $550 ($400 US) or is it absorbed by duty (so much for the North American Free Trade Agreement) or possibly a combination of both.
At first I wondered if this had something to do with the fact the Bosch is manufactured in the US. On exploring this a little more it appears not necessarily to be the case as we discovered when exploring the price of a Meile.
In the end we decided on a Meile dishwasher, these are made in Germany and so whether sold in the US or Canada the shipping distance is similar. The US price for the model we chose was $900 ($1250 Cdn) while the Canadian price is $1550. Not as big a difference as the Bosch but still a discrepancy.
Volume lowers costs?
I am wondering how much of this is related to volume sales. Intuitively bulk purchases are cheaper, you save at Costco for just reason and so, I guess, if you are supplying dishwashers to a country ten times the population (US vs. Canada) you experience a much higher sales volume, offsetting your cost and thus letting you lower the price and still make the same margin.
Ultimately though if Canadians will pay the higher prices, than the manufacturers are going to charge them. Cest la vie!