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Growing pains are a mixed blessing for one of the largest e-tailers

Newegg is one of the top shopping destinations for computer enthusiasts. In October of 2008, they launched a major expansion into Canada. However, the high cost of shipping and some lag in updating prices and new products has been of concern to customers.

DailyTech did a little research and asked a few questions through C2E Consulting, Newegg's Canadian public relations agency. The following is what Newegg was willing to disclose:

Are all products shipping from the Edison, New Jersey warehouse?
If not, what percentage?

Canadian orders are being fulfilled from all Newegg order processing centers. Where an item gets shipped from depends on availability and proximity. In general Edison takes care of most of Eastern Canada, while we have found our California centers to be most efficient in servicing the West side of the country.

Is Newegg going to start using Canada Post and/or Purolator instead of UPS?

We are currently going through the processes of evaluating and adding additional shipping options for our Canadian customers and certainly Canada Post and Purolator are among those we are considering. We have heard our customers' feedback and fully understand that in order to be competitive in retaining and winning new customers, we need to offer choices when it comes to carrier but also inexpedited and lower cost shipping.

Is the plan to expand the Canadian product line to match the U.S. product line? Is there a commitment to have new products available as quickly as the U.S. site?

Newegg prides itself on our ability to leverage partnerships with top manufacturers to offer our customers an outstanding and diverse product selection. As it stands, our Canadian customers today have access to almost our complete IT offering. Our computer and gaming categories established and built our business in the U.S. and in this sense we believe we have put our best foot forward by focusing on these products during our launch.

We are absolutely committed to expanding our offerings further and bringing our consumer electronics product lines to the Canadian market as well and are working hard on fostering and establishing the partnerships that will enable us to do so in a timely manner.

It is our goal to provide our Canadian customers an identical line-up to the U.S. with the added advantage of some specific Canadian only SKUs.

What is Newegg doing to lower prices in order to match what is available locally?

Our product management team ensures our prices are competitive to the local market especially when it comes to products and categories key to our Canadian customers. We monitor our Canadian pricing model very carefully to stay true to our commitment to value: offering quality product at great prices.

Any word on a local warehouse in Canada?

Our current order processing centers in New Jersey and California have been doing an outstanding job at shipping product to our Canadian customers getting 99% of approved orders out the door in one business day. Our robust shipping partnerships have also allowed us to come through with timely delivery to both urban and more remote areas of Canada. That being said, we cannot deny the fact that adding a local warehouse would make it easier to expand product offerings and expedite product delivery.  We are seriously evaluating our options in terms of opening a local facility. It is a natural next step for our Canadian business.

Can you discuss any further expansion plans?

Our expansion into Canada has been a great experience for Newegg and we believe we can help transform the Canadian online market for IT and consumer electronics products. We were met with much enthusiasm and feel we have been successful in providing a much needed alternative value model to the existing technology e-commerce market in Canada. The outstanding performance of our Canadian expansion has confirmed that our business model of exceptional product selection at great prices, combined with stellar customer service and fast shipping is a formula for success that transcends cultural and geographic lines. Right now, we are heavily focused on our Canada, U.S. and China businesses but certainly are reviewing our opportunities for expanding internationally.

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UPS Sucks
By arazok on 4/8/2009 11:57:57 AM , Rating: 2
The worst thing about using UPS to ship to Canada is that unless you upgrade to an overpriced expedited shipping, UPS charges you a customs brokerage fee of $25 or $50 (I forget the exact amount). They essentially bill you to fill out some paper work. No other courier charges this fee.

If you aren’t home when they deliver, the nearest branch is often a good drive. In Burlington Ontarario where I live – the nearest UPS drop-off is in Hamilton. And it’s only open from 7:00-9:00 AM, and again at 3:30-5:00PM – both during rush hour, making it an hour drive for me to pickup a stinking package.

Whenever I’m buying from the US and I see UPS shipping, I run.

RE: UPS Sucks
By Bainne on 4/8/2009 12:40:12 PM , Rating: 2
UPS is the USA is GREAT, but in Canada... UPS = United Parcel Smashers.

Newegg should switch to Round boxes for their products, as that is the eventual state that packages arrive in from UPS...

Newegg is really good on most every front, but they aren't even a Canadian company - They are an American company putting their foot in the Canadian market's door - I would prefer to support true Canadian businesses, not some ridiculous USA conglomerate.

NCIX with their PM policy is practically unbeatable, though compared to Newegg, customer service is a little slower - but shipping has vastly improved. Most of my recent orders were out the door in a matter of hours. Those who wait longer probably just order hard to find parts or were difficult customers making changes.

RE: UPS Sucks
By frobizzle on 4/8/2009 2:53:53 PM , Rating: 2
UPS is the USA is GREAT

Huh??? Don't know about where you are but UPS sucks royally in this area!

While I have the highest regard and praise for NewEgg, the biggest mistake they made was switching from FedEx to UPS!

RE: UPS Sucks
By UNHchabo on 4/8/2009 2:58:42 PM , Rating: 2
UPS is the USA is GREAT, but in Canada... UPS = United Parcel Smashers.

They are fairly often in the US, too. I lamented when Newegg switched from Fedex to UPS by default for this very reason.

A friend of mine once insured, then shipped, a 26" CRT monitor from his workplace using UPS, knowing that there was no door large enough for them to carry the box through. Sure enough, when the box arrived at its destination, it was about the same size as a pizza box, and he was able to take the insurance money to buy a new 24" LCD monitor.

"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain
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