Diary of a Demented Store Owner

Sunday, 2 November 2008

Just The Facts- You Decide

The cost of supplies to both you and us is continuing to rise at an ever-increasing rate. And, this rise seems to have little or no correlation to market realities. Is it actually a function of true costs increasing or is it something else? You decide.

The price of an item is a function of several things; namely, cost of goods, cost of transportation, value of the Canadian dollar (for non-Canadian goods), and the amount of markup expected by the supplier. We all know that the dollar's gone down recently, gas is up... oops, no it’s not- it’s now down- to the lowest level in two years. Some suppliers have raised their prices (some have, but we know who hasn't, given our close contact with American suppliers and wonder why products like window glass [which is bought locally] would suddenly go up 40%). But do all these factors justify the substantial price increases our industry in Canada has seen in the past year or so? You decide.

We've progressively pursued alternative sources for supplies over the past few years to the point where we now depend on our Canadian supplier for less than 25% of our inventory. Of course, as we are not as dependent upon our sole Canadian supplier as some of our competitors, the impact on pricing at Fantasy In Glass is not as extreme as you might experience elsewhere. And we have secured supplies and made other plans to continue to try and minimize the impact to you (maybe we should be working for the Canadian wholesaler- if we can do it, why can’t they?).

Where’s this all going?

In two separate letters received from our one and only Canadian supplier in recent weeks, they are instituting the following surcharge on all goods bought from them- namely, for every dollar spent with them, they will be adding a percentage to recoup their increased costs.

Surcharges are as follows:

Oct. 15- (dollar at .845 cents)- surcharge is 7.9%
Oct. 31- (dollar at .823)- surcharge is 14.2%

That means that a dollar difference of 2.7% warrants a surcharge increase of 6.3%.

Make sense? Justified? You decide.

It’s a strange and trying time to be a Canadian stained glass retailer…


Anonymous said...

I remember when the CDN dollar went to par and above and our 1 and only Canadian wholesaler, who's pricelist was still based on a 85 cent dollar never changed their pricing to reflect the stronger dollar. Oh., sorry, my mistake- they did give us a 4% discount for about a month.
'H' seems like the gas companies!

Anonymous said...

Got to add another comment-
I get the mailings too, and 'H' claims that the cost of transportation is a significant factor in the rising prices we're seeing today, but THEY'RE GIVING FREE SHIPPING! Well, I guess it's free shipping if they raise their prices to everyone to cover it. Hey, wait a minute! I don't use their free shipping, but it looks like I'm payiing for everyone else who does!
They really do talk out of both sides of their mouth don't they. I can't wait for one of the American suppliers to come into Canada!
Me Again

Anonymous said...

The two 'R's at 'H'- like two peas in a pod. I got the same letters and love watching how they're raping this industry. That's ok- in a year or two there will no longer be a retail market as they'll destroy it, although you'll still be around I imagine given that you seem to be the only one smart enough to not need them to survive. Oh, I do miss the old men who had integrity and lived our business- Bill and Bob why did you leave us in this mess?