can be sold at even greater savings because OEM parts are much higher. Unfortunately navigating this new market takes research and knowledge to ensure a deal is really a deal. Many online parts stores are supplied by the same ware- houses. This means variety and competitive pricing is not overly abundant. Some stores have built “Canadian” versions of their popular US store fronts. This is more mar- keting than savings. Prices are often still listed in US dollars and shipped from American warehouses. Alternatively, some stores add all the costs associated with selling in Canada to their list price which makes it much higher. There are no free rides with these operations. When dealing directly with US based parts stores you need to recognize that some do not ship internationally. Many offer free shipping within the continental US. For those that do offer service to Canada, you’ll find that the shipping extras, currency exchange and customs fees can often erode all the potential savings. As a rule of thumb, the best deals are often found on eBay or auction sites. Check both the Canadian and American versions. There is a big difference. Be careful to watch where the item is manufactured. You could face an 11% duty if it is a country not included in NAFTA. There are great online calculators to help like this one: https://www.crossborder- shopping.ca/calculators/canadian-duty-calculator. Also ask about the shipper and watch for excessive brokerage fees they will add. The next key is to control hidden fees and charges with credit cards and exchange rates. The currency exchange rate you see on the evening news, doesn’t apply to you. If you use your Canadian credit card, you’ll be paying the maximum in exchange fees. Banks can add up to 10 cents on top of the daily posted exchange rate. In addition, your credit card company will normally add an additional 2.5% in a foreign transaction fee. It can really add up.
The good news is you can manage your costs. Inves- tigate new Canadian credit cards that do not charge foreign transaction fees. These help when shopping in the US by eliminating the 2.5% markup. Shop carefully as rewards programs and annual fees vary greatly. Here is a site with some options: http://www.greedyrates.ca/blog/ travel-tip-avoid-foreign-transaction-fees-canadian-cred- it-card/#.V0sNwRMrLnA. When shopping online, US dollar credit cards issued by Canadian banks let you pay with US funds and eliminate extra currency exchange fees. You’ll still pay the difference in currencies, but the add-ons are significantly reduced. PayPal also tends to have much lower exchange rates than banks for people shopping at US stores with Canadian dollars. Normally they only add a few cents to the daily posted rate and only hit your credit card after the currency is converted. The customs fees are mostly provincial sales taxes. By having a US address where you can send packages, you will often get free shipping. If someone coming to Canada can pick up the item and deliver it to you the fees at the border will not apply under most circumstances. Travelling there to bring the items back will also let you qualify for exemptions. This is often the most difficult cost to control especially when the need is urgent. If you are a frequent parts buyer it can be worth the effort to investigate US sourcing and establish the tools needed to make it happen. For occasional purchases it is probably not worth the effort unless you are buying large ticket items or unique parts. As a rule, your first stop should still always be your local suppliers because they could be the most eco- nomical and hassle free option. Also out of the box defects and ordering the wrong parts can happen. The ability to return a purchase locally is worth much more than saving a few dollars online. Be an informed shopper, complete the due diligence and you will find which avenue is best for you.
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JULY 2018 • SPOTLIGHT ON BUSINESS MAGAZINE
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