On cross-border shopping and smuggling

So, during a particularly boring meeting today, I ran the numbers on the recent smuggling effort.

I ordered 32 items from Amazon.com and had them shipped to a friend in Boston. Of those, one item is one that for some reason isn’t available from Amazon.ca (and indeed, can’t be ordered from Amazon.com to a Canadian address!), so we’re going to ignore that one.

For the remaining 31 items (mostly books, and a couple of DVD sets) I did some calculations.

The “cover” price of these items totals $1277.01CAD. With the HST banged on top that would have come to a total of $1455.79CAD.

Now that’s almost moot, since only shmucks pay “cover” price, right?

Well, assuming I ordered these 31 items from Amazon.ca, the total price would have been $905.04CAD, with the $371.97 difference reflecting Amazon’s discounting from cover price. I assume that I would have got free shipping with an order that size, so with tax it would have come to $1031.75CAD, or $424.05 less than cover price.

That might seem like a good deal. Until you look at the Amazon.com prices, that is.

The same 31 items, ordered from Amazon.com come to a total price of $658.83USD. So even assuming that the dollars were at parity, Amazon.com is around $250 cheaper for the same items. This is primarily because Amazon.ca sells books at “Canadian cover less discount X”, where Amazon.com sells books at “US cover less discount X”, and the cover price differential for books is still set by publishers to reflect the days when the exchange rate was something like 1$USD=1.6$CAD, rather than the current reality. For example, the HCs of Nix’s Keys To The Kingdom books are around $16CAD at Amazon.ca and around $11USD at Amazon.com–that’s just silly. And don’t even get me started on HBO box sets, which are half the price at Amazon.com as Amazon.ca.

In actuality, the adjusted price of the order from Amazon.com was $621.54CAD. So the pre-tax price at Amazon.com ends up being $283.50 cheaper than ordering the SAME items from the SAME company here. And, of course, there is no tax, so I also save the $126.71 I would have paid in tax at Amazon.ca.

So, final tally is and $834.25 savings off cover, and a $410.21 savings from the cost at Amazon.ca.

It’s no wonder there’s so much cross-border shopping going on.

And hell, when sneaking one crate of books across saves me $126.71 it’s easy to see why there’s smuggling too. (And that’s books, on which there is only tax and not duty–other items have an even higher incentive to smuggle.)

Of course Americans don’t have it so bad–the pricing difference means the order was $250 cheaper in their country than here; the currency thing only saved me $40. Their dollar is still going further when prices are that much cheaper in their country.

My wife, on the other hand, has to deal with the fact that even though I’m saving 60% off cover and 40% off what it would cost me here, the items still take up the same amount of space in the house. Indeed, she is probably quite upset that the same money can buy me more volume of items.