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…