We get asked this question a lot, and it gets discussed a lot in the shop and on the trails. Despite all the discussion, there appears to be no single answer and certainly a complex set of reasons.
We Match Most US Prices!
Below we list a few facts about the Canadian marketplace to help frame the issue. We’ll always do our best to match landed US prices.
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- First and most importantly, not all bicycle-related products are more expensive in Canada. Many products from many suppliers are currently priced competitively and in some cases less in Canada than in the US.
- Average retail markups in Canada and the US are very similar.
- The Canadian market for bicycle products is significantly smaller than the US – approximately 1/10th the size, leading to a few effects including the obvious -suppliers will usually price better for higher volumes of sales.
- Because of its smaller size, the Canadian market is rarely served directly by manufacturers of products, but rather through an intermediate step of a distributor, who needs to mark up products to pay for the service they provide.
- The US also has distributors for many product lines, but they buy in larger volumes than their Canadian counterparts, potentially leading to lower prices.
- In the US, retailers can source most products from more than one competing distributor. In Canada, some product lines are available from multiple suppliers, but many products are available from only one distributor who has exclusive rights to those product lines in Canada. Although Canadian retailers usually have accounts with major US distributors, those US firms respect the Canadian exclusivity and will not ship protected products to Canadian retailers.
- Canada is a large country, with a relatively small population. We also have a different set of taxes and duties than the US. These “infrastructural” costs combined with the smaller volume of sales can increase prices.
- Bicycle products from all suppliers are very global – their manufacture and production may include various international and domestic sources. Because of this, most suppliers and distributors engage in long term currency hedging and purchase contracts making it hard to respond quickly when one currency moves quickly against another.
- In addition to the above, Canadian distributors often commit months ahead to pricing and volume of products and set pricing and catalogs in the summer of one year that are expected to be effective for a full year before revision. This means that costs are fixed for a period of time and their ability to change them is not high.
Hopefully this gives a bit more background and helps explain why there is not really a conspiracy!
Remember, we’ll match most US landed prices!