Price Differences

[Derek Tuchscherer]

Can anyone explain why there would be such a large price difference? This was pointed out on a Canadian Forum. The same 14" Bandsaw

Sears.ca - Canada $699CDN
http://www.sears.ca/gp/product/B000FS2G8G/sr=1-0/qid=1162918811/ref=sr_1_0/002-8225382-4620819?ie=UTF8&searsBrand=core&mqnodeid=APS

Sears.com - USA - $479USD
http://www.sears.com/sr/javasr/product.do?cat=Bench+Power+Tools&pid=00922401000&vertical=TOOL&subcat=Band+Saws&BV_UseBVCookie=Yes

If you do the CDN$-USD$ conversion
$479 US = $541 CDN for the saw from the US site,
$699 CDN = $620 USD for the saw from the cdn site.

This makes no sense to me. Surely it can't cost that much more to ship a saw to Canada than to the US?????

[Scott Loven]

Dont they have to pay VAT in Canada?

[Art Mulder]

Dont they have to pay VAT in Canada?

VAT? That's Britain.

Sure we pay sales tax. Don't you pay sales tax?

Here in Canada we have the GST - the Goods and Services Tax - which is a federal sales tax on most everything, and it is 6%. I suppose that is a VAT.

We also have provincial sales taxes, which vary by provinces. Here in Ontario, where I live, it is 8%. Lovely Alberta, thanks to it's oil and natural resources (among other things) has a 0% provincial sales tax. That is the only zero in the country that I know of.

One thing we don't have up here, is local city or municiple sales taxes. I was shocked when I heard that cities in the US could apply their own sales tax. Weird. But then I think Hospitals putting up billboards to advertise their services is weird also. But I digress.

But none of the above matters. Just like in the States, prices are almost always quoted as a before-tax price. So that price quoted above is before tax. The tax has nothing to do with the difference in price.


One reason that I have heard that makes sense is volume. The US population is almost exactly 10x the Canadian one. So a vendor in the US might order 10 shipping containers full of tablesaws, and the vendor in Canada would only order one. Volume discounts apply.

But it would be nice if the vendors would actually lay out their reasons, so we don't just guess.

[Derek Tuchscherer]

Sorry Scott, I'm not sure what VAT is, help me out here. Thanks

[CPeter James]

Value added tax. Everyone that adds value to something pays tax. In theory, when the ore is dug from the gound it is taxed, when it is smelted into iron or steel ist is taxed, when it is made into a table saw it is taxed, when it is sold it is taxed. The taxes are supposed to be only on the "value added" at each step along the way. Basically a sales tax added at each step.

Buy in "Tax Free New Hampshire", no state or local sales taxes.

CPeter

[Keith Weber]

I thought GST was 7%, but I bailed about 6 years ago, so maybe it's gone down. Wasn't it supposed to disappear all together??? Hearing price differences like that makes me glad that I don't live there anymore. There's no need for that!

[Derek Tuchscherer]

Key Keith, yep the GST recently went down to 6%, and as a bonus, in Saskatchewan our Provincial tax just dropped from 7% to 5%, a few extra pennies in the pocket with each purchase.

[glenn bradley]

Doesn't look like any clear answer here Derek. I ponder the same thing when something at Lee Valley is 20% more than at Woodcraft and then the exact opposite is true of a different item. The moral is shop around, I guess. I buy from many different vendors based on their best price for an item. The exception is where I feel the reputation for customer service is worth the extra money on a complex or potentially problematic item.

[Shiraz Balolia]

The main reason is that USA has lower import duties than Canada.
NAFTA does not apply to overseas products.

[Ken Riach]

Shiraz,

how much are the import duties on overseas manufactured equipment? As far as I have been able to find out the Canadian duties are 7% for woodworking equipment not manufactured in the US. I am wondering how much difference there is between the two countries.



I am curious about this subject as I am heading to Bellingham to pick up a GO555 on Friday. It is almost $200.00 Canadian cheaper than the closest equivalent saw that I can find in Canada.


regards

Ken

[Art Mulder]

The main reason is that USA has lower import duties than Canada.
NAFTA does not apply to overseas products.

At first I thought this made a lot of sense. But after reading Ken's comment, I'm not so sure.

In the original post we're talking about a list price of CDN$699 versus CDN$541. A difference of $158 which is 30%. Or do it in American dollars and you've got a price of US$620 versus $479, so a difference of US$141 or that same 30%.

Now of course I don't expect you to speak for Sears. But it seems to me that if Ken is right, and the Canadian duty is 7%, then there is certainly a lot more going on here than a simple variance in duty charges.

Whatever, I'm not going to lose sleep on it. :cool:

[Cliff Rohrabacher]

This thread could go political so fast.

VAT is often referred to as the invisible tax.
Invisible because each time something is moved in the stream of commerce there is a tax imposed on the transaction. This cost is passed on to the next transactor (buyer) who then gets taxed and passes all prior taxes as well as the tax he pays onto the subsecquent transactor.

Eventually by the time it reaches the consumer it has been taxed so heavily that the tax burden on the item may well out-strip it's value.
This is a highly inflationary tax scheme favored in much of Europe.

Government Who'd have thought that it was the single number one best money making enterprtise ever !!

I should start a government.

[Chuck Nickerson]

higher/tighter electrical standards. Does that add to the cost?

[Ian Gillis]

Just to add to the available explanations...


Sears and Sears Canada are 2 different companies. Sears is trying to buy control of Sears Canada, but last I heard they weren't there yet.

Could the difference be that Sears Canada pays a higher price for the store-branded products? Since Canada is a smaller market than the US and our population is fairly widely spread, I think it's likely that the wholesale cost and distribution costs are both higher.

Just my .02