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Question about Canadian dollar and retail stores

843 Views 3 Replies 3 Participants Last post by  shad
I really don't do much gear shopping in retail stores. I buy from online classifieds, forums etc. The closest big music store is about 40 minutes away too, so laziness factors in.

I was curious though, has the strong Canadian dollar bought new gear prices down at all? The 2 things that never seem to be affected by the $ are prices on books, and on music gear. It never makes much sense.
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Ya I am actually more referring to products like US made Gibson and Fender guitars, and the relation to the US dollar. I should have clarified that. I know other foreign imports won't really be affected.
Ya I am actually more referring to products like US made Gibson and Fender guitars, and the relation to the US dollar. I should have clarified that. I know other foreign imports won't really be affected.
Some of it may be sheer ripoff but a lot of it is because of inventory costs.

If you run a store you pay for that Fender guitar within 30 days of shipment or your account is cut off. As a Canadian you pay according to prices that include the exchange on the dollar at the time of shipment.

Now, how long does that guitar sit in your store before its sold? Suppose you're expected to see that guitar to a guy like me at a price reflecting the exchange rate TODAY! Who's gonna take the loss? Before someone pipes up with "It's only 10%! They can afford it!" you might want to find out just how much markup a store actually makes. I find it totally ridiculous how some folks who do not work in business think stores buy stuff for $10 and sell it for $200. On a guitar I would suspect that while larger stores may get as much as 30 % (I'm just guessing here) a small store that can only afford to buy one or two guitars at a time might get less than 20%.

The other problem is printing price lists! When the dollar exchange is going up or down you need to be psychic to guess if it will settle down or change even more. Do you print a new price list every day?

Our dollar was around .65 U$ for years and years. We've gone up to .95 U$ in only a year or two! Anyone who dealt in fast turnover product was probably not hurt too bad but anybody selling stuff that sits on a shelf for a while is hurting.

Again, I'm not saying there's not some profiteering going on. Just that there are some real factors one has to consider.

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I guess I'll put in my 2 bits worth here. Wild Bill and jroberts both make valid points.

I was in the retail business (bicycles, not guitars) for a few years, and believe me it is tough to make a decent profit. In the bike business we had a margin of 30% to play with, but by the time you assembled the bike, spent a 1/2 hour or more with the customer, reduced the asking price by a few bucks, and threw in a free kickstand, you were lucky to realize a 15% profit, and that was just the gross profit, then you have to factor in your overhead costs. Nope it's not easy being a small business person.

The retailer that had the $4000 guitar on his shelf for 5 years wasn't good at what he did. He has to turn his inventory over 3 times per year, if he doesn't he might as well put his money into savings bonds.

I do go into music stores fairly often and what I see is a lot of tire kickers, they play various instruments, take up the salesman's time, and then walk out having spent nothing. This is fair ball if they come back at some point and purchase the instrument that they've been gassing for, but if they then drive down to the U.S. and buy the same guitar from someone who has not invested any time or effort in them...well that just isn't fair ball, and those folks give me a pain where the sun don't shine!

On the subject of books, I have to agree that I don't understand the difference between the US and Canadian prices. I saw a book on guitars in Chapters the other day, US price $25.95, Canadian $38.95. It was new stock, at least it wasn't there the week before, and it annoyed me enough that I decided not to buy it.

End of rant!

Cheers! :food-smiley-004:
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