Toy Tuesday: Global Pricing -- Not in My Lifetime!

Richard Gottlieb, a toy industry veteran who writes the thought-provoking "Out of the Toy Box" blog for Playthings Magazine, asks "What is going to happen as consumers in various part of the world use their Internet connections to become savvy about retail prices around the world?" and wonders if the internet will ultimately force a sort of "global pricing".

As long as the world is made up of autonomous nations, I don't see global pricing or anything close to it happening in my lifetime.

Five reasons why:

1. Cost of running retail stores varies dramatically around the world. Wages, for example, are higher in Canada that they are in the US.

2. Countries like Canada and Sweden that have strong social welfare policies have higher taxes than places like China and the US, which ultimately impact product costs and in turn product prices.

3. Some markets (like the US) command economies of scale in everything from marketing to logistics, keeping costs and prices down compared to smaller markets like Canada.

4. Localization of some sort will always be necessary as long as people around the world speak different languages from each other.

5. Even if consumers can get better pricing from another country, the logistics and associated costs involved in moving products from one country to another are rarely worth the effort for the consumer.

Canadians are no strangers to shopping outside the country to look for better pricing. The term "cross border shopping" is a unique Canadian thing. If you ask any Canadian who has tried to order something online from a US retailer, you'll learn that many won't even ship across our border, and when they do, freight and duty charges mean that the "better" US price is no longer any better at all.

"Global pricing" is neither realistic nor desirable. Still, I'll continue to take advantage of deals I can get when I'm lucky enough to travel to places like the US and China.