Topic: Price Difference Between Canadian & US Retailers

[in2house]

I've been shopping around for a set of 205/50/15 tires for my VW and as I've checked online to see what is available, I'm blown away by the price differential between Canadian and US retailers. I can see why there have been numerous threads created on whether its worth it to buy from Tirerack or Discount Tire.

I've narrowed the pool of tires down to the following

Falken Ziex ZE-512 ($66 US - DT) - ($82 CDN - LS)
Falken Ziex ZE-912 ($72 US - DT) - ($95 CDN - 1010)
Hankook Ventus HRII H405 ($54 US - OT) - ($127 CDN - TT)
Toyo Proxes 4 ($70 US - OT) - ($130 CDN - 1010)
Toyo Proxes T1R ($96 US - OT) - ($180 CDN - 1010)
Yokohama S.Drive ($83 US - TR) - ($166 CDN - 1010)

Sources - DT - Discount Tire, OT - Online Tires, TR - Tire Rack, TT - Tire Trends, 1010 - 1010Tires, LS - Local Source

I realize that my choices cover a wide range from the low to the high end of the market but I'm looking to for a more refined tire (less noise, etc.) as I currently have Kumho Supra 712 and although a decent tire, I would like something better.

The Hankook, Yokohama, and Toyo tires are (or almost are) double the price here in Canada. The Falken's seem to have a smaller price differential. The only explanation that would make sense (although I wouldn't agree with) is that most tires are shipped to the US for North American distribution and thus when shipping to a Canadian Distributor the company must pay duty on the product and of course that cost gets passed on to the end user.

As this is my first post, I do not want to offend 1010 Tires as they are a sponsor of the forum but I do think consumers have a right to know why such a large price differential exists. The argument can be made that if you do purchase from a US retailer, the additional taxes and fees will not make it worth your while. However it still doesn't explain why the price differential exists in the first place.

[No H2O]

I'm blown away by the price differential between Canadian and US retailers.

So am I which is why I order 99% of my car and motorcycle parts and accessories from the US. On one of my larger orders (CA$1059), I saved enough for a return airline ticket to Europe...about $900.

I don't bother wondering why anymore. The lame excuse I've read as to the differences...I just  .

[No H2O]

Note that tires not made in the USA are subject to duty. I believe it is 6%. That was back a few years ago and things may have changed. It is best to call the CBSA.

My Yokohama tires were duty free to my surprise. Sure enough, the sidewall had "Made in the USA" on them.

[Schmengie]

  Wow, those price discrepancies are shocking. I was checking out some new camera reviews the other day and found out that the new Fujifilm H-10 superzoom which is just hitting the market has exactly the same suggested MSRP on BOTH Fuji's Canadian and American websites at $499.99. Obviously not everyone's ripping customers off the way these tire companies seem to be. Are you listening, 1010? I'd REALLY love to hear the justification for this...

[sailor723]

I think you'll find it's not 1010 Tires or any of the other tire retailers but rather the tire manufacturers and the way they choose to distribute their product in Canada.

[toolatecrew]

Correct in many cases in order to be an "Authorized" dealer and offer warranty etc or even sell the tire a distributor in Canada MUST purchase from the Canadian manufacturer. WIth tires and other products often they cannot buy wholesale from the Canadian manufacturing arm at even close to the cost that you can buy retail from the US. Its really unfair for the Canadian distributor but they can't control it.

I won't repost everything from my previous thread but my wheels and tires were 500 less from the US than Canada even after tax, shipping and duty.

However you do need to be very careful when comparing prices. Due to the fact that my wheels were a closeout and only available from a Nevada warehouse shipping to NS was over 300$. WHat looks like 70$ us can balloon to $170 a tire if you don't allow for shipping and duty under some circumstances.

All you can do is make sure you run all the way through both the Tire rack and other sites checkout so you get a TOTAL price so you can do a proper comparison You may find that the difference is much less than you think.

I think that 1010 tires and other Canadian online retailers work to try to keep prices as competitive as they can. After all if they don't they just lose the business.

[No H2O]

I think that 1010 tires and other Canadian online retailers work to try to keep prices as competitive as they can.

I don't think so and that applies to any business up here.

They know US shopping is far less than 1% of sales. Why would anyone drop prices for that small segment?

[inco]

Manufacturers will always reward those retailers with volume.  The prices that Tire Rack gets will be a lot lower than say 1010 tires simply because of the much larger purchasing power that they have. Look at any retail department store and you find the same things. WalMart can always beat out Sears or the Bay.

Warranty and service work are also considerations. Buying in the US in many cases gets you neither and if that's an issue or a worry then buy in Canada. Sometimes though the price differences are so great that it's worth it.

[toolatecrew]

I think that 1010 tires and other Canadian online retailers work to try to keep prices as competitive as they can.

I don't think so and that applies to any business up here.

They know US shopping is far less than 1% of sales. Why would anyone drop prices for that small segment?

Yet they do it. I said ONLINE retailers. US sales account for far more than 1% of online sales. If people venture online to shop for tires chances are they are also going to look at Tirerack its inevitable.

I agree that brick and mortar stores have little incentive to try to be competative with online prices. Its simply a different market. For example I'd guess a very few Joe average looking for cheap all seasons walk into Canadian tire ask for a quote to get tires on and then go search to get tires shipped from online. I know my local tire shops generally get a lot from walk in business.

It doesn't make sense to be 100s of dollars more expensive than your online competior. Country deosn't make much difference online.

[Schmengie]

For a minute there, I was actually expecting 1010 to post a response to the questions raised in this thread. That was silly of me...

[in2house]

Thank you all for the replies thus far. Some good points have been raised and I do hope that 1010 Tires has some information to share.

There are numerous dealers like Active Green & Ross and Superior Tire that have multiple locations and as a whole have a purchasing power. I do believe that retailers get rewarded for pushing certain brands but I can't see that being the sole reason for the difference in price.

I'm going to make some calls tomorrow to some local shops to get a better idea as to what the prices are. I'll keep you all updated.

[sailor723]

For a minute there, I was actually expecting 1010 to post a response to the questions raised in this thread. That was silly of me...

I think Nathan has already addressed this in an earlier thread. As I said above,the Canadian pricing issue largely has to do with the tire manufacturers and how they choose to distribute and price their product in the Canadian market.

[in2house]

Ok... After some phone calls, here are some local prices

Falken Ziex ZE-512 ($66 US - DT) - ($82 CDN - LS)
Falken Ziex ZE-912 ($72 US - DT) - ($95 CDN - 1010) - ($105 CDN)
Hankook Ventus HRII H405 ($54 US - OT) - ($127 CDN - TT) - ($122 CDN)
Toyo Proxes 4 ($70 US - OT) - ($130 CDN - 1010) - ($155 CDN*)
Toyo Proxes T1R ($96 US - OT) - ($180 CDN - 1010) - ($189 CDN*)
Yokohama S.Drive ($83 US - TR) - ($166 CDN - 1010) - ($155)

Sources - DT - Discount Tire, OT - Online Tires, TR - Tire Rack, TT - Tire Trends, 1010 - 1010Tires, LS - Local Source, * - Installed & Balanced

I would say the prices are pretty consistent with 1010 Tires which is good to see. Differences of $10 to $15 can always be worked out with the retailer if your really serious about buying.

I do know that some manufactures are offering rebates, so I guess I can take advantage of that. If not, I could always arrange a trip to the US and buy them there. Its a shame that consumers are forced to deal with this. I'm not going to complain about a $20-30 difference but tires costing twice the price than in the US is crazy.

[No H2O]

WalMart can always beat out Sears or the Bay.

Yes but buying power can only reduce volume prices so much.

People here have stated that its the manufacturers/distributors who are at fault for our pricing. I don't buy it!

Ever wonder why % discounts are far lower in the US than here? Most probably because there is far less markup in the US at the retail level.

Check out sales flyers up here: 25%, 40% and even 50% off.

I buy my Mobil 1 in the US for $24 a jug. At CTC or Wal-Mart up here the same jug (actually its a bit smaller) runs for $42...no wonder when its on sale it goes for $32...and they're still making money on it. You never see that $24 a jug Mobil 1 going on sale in the US...cause its already rock bottom.

[rrocket]

I buy my Mobil 1 in the US for $24 a jug. At CTC or Wal-Mart up here the same jug (actually its a bit smaller) runs for $42...no wonder when its on sale it goes for $32...and they're still making money on it. You never see that $24 a jug Mobil 1 going on sale in the US...cause its already rock bottom.

Because it's only a Group III synthetic.... 

[Nathan@1010tires]

For a minute there, I was actually expecting 1010 to post a response to the questions raised in this thread. That was silly of me...

Hmm...

My apologies for not being able to monitor the boards as quickly as some of you would like, with the shipping promotion on right now things are quite busy here. This thread was also created during the Easter long weekend. I don't know about you guys but on my time off I like to get away from work a little bit.

I have answered these questions in a previous thread on this topic (http://www.canadiandriver.com/forum/index.php/topic,60698.0.html) and been very candid about describing some things that go on behind closed doors. I have not made any comments up until this point about thread dedicated to US purchasing. I have the ability to close them all down but I do not think that helps anyone in the end. In fact, the last two were both started by someone as their very first post... Could be a trolling competitor for all we know.

If someone really truly does believe everything we as Canadian retailers are spewing is just BS, that is their decision. We do what we can. Our profit levels would stay the same if product was cheaper overall, but of course we would move more product, we have absolutely nothing to gain whatsoever by keeping prices higher than they have to be.

I look at the first post of this thread, talking about Yokohama, Toyo, and Falken. The reason Falken is not as large of a price difference is because there is no Canadian division of Falken. Everything is brought up from Falken USA and is purchased in US dollars directly from them. There are no excessive markups from the manufacturer.

Just FYI, these are our costs from Yokohama and Toyo Canada on the 205/50R15 tires in question.

Toyo Proxes 4 - $119.
Toyo Proxes T1-R - 152
Yokohama S.Drive - 130

Compare that to the US retail prices of $70, 96 and 83 respectively. Costs are going to be about $ 20 a tire less.

Yet, somehow, this is the Canadian retailers gouging consumers.

I buy my Mobil 1 in the US for $24 a jug. At CTC or Wal-Mart up here the same jug (actually its a bit smaller) runs for $42...no wonder when its on sale it goes for $32...and they're still making money on it. You never see that $24 a jug Mobil 1 going on sale in the US...cause its already rock bottom.

What you are forgetting is that Wal-Mart USA is going to sell 50 times the amount of oil that Wal-Mart Canada is, of course the margins are thinner. They sell a heck of a lot more product with a lot more retail competition. Wal-Mart operates on a 3% profit margin, because they can.

About the sales... if you are seeing a 40 - 50% off sale, you can be 99% sure it is a manufacturer sale, and not a retail one. The only area a lot of it is on the retail end, is things like clothing and jewellery.

[johngenx]

Yet, somehow, this is the Canadian retailers gouging consumers.

I think that the number of retailers that are gouging consumers in relation to US prices is few.  No, it is the manufacturers that are gouging us.

Why?  Canada is not really a separate market from the US.  This is a tired old argument that makes no sense anymore.  Goods flow in large quantities across the 49th everyday, and many of them are identical to the ones sold in the US.

Instead of a US market of ~300 million consumers, it is really a US/Canada market of ~330 million consumers.  Most Canadian customers are close to the US border.  We have well developed and efficient transportation systems.  Free trade means most good cross the border with little or no delay or cost.

Look at cars.  Cars have to be certified for the Canadian market, but our unique requirements are not so costly that it would add 30-50% to the price!  Any electronics I've purchased in the last 20 years has multi-lingual packaging and documentation that spans the globe.  And so on.

How does it cost Bridgestone 50% more to sell tires in Canada?  Poppycock.

[Angry Chicken]

I paid a total of $100 more buying my 4 205-50-WR17 tires ($811 vs. $711)at my local retailer.  In return I got my tires on my car 2 days after I ordered them, drank coffee in a nice clean waiting room, got to watch them mount the tires and contributed to both the Canadian and local economies.

[toolatecrew]

I paid a total of $100 more buying my 4 205-50-WR17 tires ($811 vs. $711)at my local retailer.  In return I got my tires on my car 2 days after I ordered them, drank coffee in a nice clean waiting room, got to watch them mount the tires and contributed to both the Canadian and local economies.

And I paid 500 less ordering my wheels and tires from the US. Yes I waited longer than 2 days after I ordered them but the weather wasn't good enough to put them on anyways. I never waited outside my house. I guess I did contribute to the local economy with the 20 I paid to have them installed and my winter wheels off (I could have done it myself but was busy)

If I could have gotten mine locally for $100 in the difference I likely would have done it.

The manufacturer got the sale of the wheels and tires. Didn't matter to them where I bought them.

Only guy who loses in this scenario is the local guy . Its not his fault he's being made uncompetitive by the manufacturer. I never berate the local guys on this. I usually tell them I know you can't MATCH this but if you can come close I'll give you my business. In the end I'm a consumer not a philanthropist. The system is the way it is. Apparently there is nothing we can do to change it.

[Angry Chicken]

I don't believe in philanthropy in this instance, either. If I have any problems with the tires I can go back to my local retailer.  Also, they offer free tire rotation every 10,000 km.  That's value added.  Now, if the price difference was 100's of $$ (often the case with tire+rim packages) I would shop online.  BTW, this whole discussion is reminiscent of the one about CDN vs. US book prices, where, despite the near parity of our currency, the same book costs more here in Canada.  In *that* discussion, the main argument for higher CDN costs came down to greater distribution and transportation costs in Canada as well as relative economies of scale.