A Message from Bill Crutchfield

Canadian friends,

We have received some inquiries about the price differences between our Canadian and U.S. catalogues and websites. In some cases, virtually identical products are higher on the Canadian site. Quite honestly, if I were you, I would want an explanation about this situation.

First, I want to promise you that Crutchfield is not gouging our Canadian customers. In fact, our overall gross profit margins (the price difference between what we pay and charge for merchandise) are no higher at Crutchfield Canada than they are at Crutchfield. Why, then, are our Canadian prices higher? I am not completely sure. But, here are some possible explanations:

With the exception of a few accessory products, we do not import our merchandise from the United States into Canada. The products that we sell in the United States are purchased from the U.S. subsidiaries of our manufacturers while the products that we sell in Canada are purchased from the Canadian subsidiaries of our manufacturers. We do this for several good reasons.

First, we do it for your benefit. Products made for the United States may not be covered by a manufacturer’s warranty in Canada. Second, the sale of products made for the United States may be illegal under Canadian law since their owners’ manuals are published in English and Spanish and not in English and French. And, our manufacturers have very strict restriction on where their products are sold. Crutchfield is authorized to sell merchandise only in the United States and its territories. Crutchfield Canada is only authorized to sell merchandise in Canada. It would be a violation of our dealer agreements for Crutchfield to sell products in Canada as it would be a violation for Crutchfield Canada to sell products in the United States.

In many cases, we are paying more to these Canadian subsidiaries than we pay to their American counterparts. I suspect that the reasons may be related to the following factors:

1. The merchandise that our suppliers have in their Canadian warehouses was probably bought from their Asian factories when the Canadian dollar was much weaker than it is today. If so, we should see price reductions in the future as they replace merchandise purchased with a weak Canadian dollar with merchandise purchased with a strong one.
2. The manufacturers’ American subsidiaries have greater economies of scale than their Canadian counterparts. Because of market size differences, the manufacturers’ American subsidiaries can order approximately ten times more products from their Asian factories than can their Canadian subsidiaries. As we know, larger volumes typically translate into lower costs. Again, because of economies of scale, I suspect that the manufacturers’ Canadian subsidiaries spend a greater percentage of their revenue on advertising, sales administration and warranty related costs than do their American counterparts.
3. Financial factors. I suspect that there are other factors like greater duties, hedges against currency fluctuations, and other hidden costs that may contribute to this problem.

In closing, I do not believe that one factor contributes to these price discrepancies. It is probably a combination of those that I have identified as well as some that I have not. Regardless, Crutchfield Canada is very concerned about the problem and is working with our Canadian suppliers to bring some relief to you.

There may be a bright side to my message. Hopefully, I have demonstrated how Crutchfield plays by the rules. We will always do what is in best long-term interests of our customers, abide by the laws of our sovereign nations and honor our manufacturers’ policies.

I will continue to update this page as we learn more about this situation.

Thank you for you shopping at Crutchfield Canada.

Bill Crutchfield