|
We need to realize that this isn't a simple dollar-to-dollar comparison. Amazon.com and Amazon.ca are two different operations. They each have their own distribution systems and their own operating costs. I mentioned economies of scale earlier. Amazon.com has a much higher sales volume and can therefore charge a lower price based on that alone. Also, there are other competitive considerations. The U.S. market is far more competitive than the Canadian market. Also consider the cost of shipping in Canada, which is a demographically sparse country compared to the U.S.
When you look at operating costs alone, you look at things such as property values, gas prices, employee costs, etc. These are elastic values that differ company to company and country to country. Although the value of the dollar is certainly a factor, to assume that the prices should be at par with the dollar value differential is oversimplifying the big picture.
Amazon.com's prices should never be expected to be equal to Amazon.ca's. It wouldn't make sense if you understand business models and pricing strategies. The bottomline: These are two different national markets, and there are regional and local markets to consider as well. If anything, the costs of foreign products will come down...over time. But the actual amount will probably be less than you'd expect.
__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön
Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot
|