A Comprehensive Guide to Importing and Selling on Amazon Canada
Importing and selling on Amazon Canada can be a lucrative opportunity for sellers looking to expand their reach.
This guide provides a detailed overview of the key points discussed in a recent webinar on the topic, highlighting the ease of importing into Canada, sales velocity comparisons, transit times from China, consumer buying habits, handling returns, using third-party logistics (3PL) providers, tax considerations, the CARM initiative, duty rates, and pricing strategies.
Ease of Importing into Canada for Amazon FBA
Importing into Canada is generally simpler than importing into the United States. There are fewer forms, permits, and licenses required for general cargo.
However, for specific products, you may still need to obtain permits and licenses in advance. The most crucial aspect of importing into Canada is thorough preparation.
This includes understanding customs regulations, tariff classifications, valuation rules, document requirements, and the duties and taxes that need to be paid.
Sales Velocity on Amazon Canada
Sales velocity in the Canadian market is typically about 10 to 20% of what it is in the US, depending on the time of year.
While this may seem lower, the Canadian market is growing and offers significant potential for sellers.
The market is similar to Australia in terms of size and consumer behavior, making it a worthwhile investment for sellers looking to expand their operations.
Transit Times from China to Canada
For sellers manufacturing in China, it is essential to acknowledge the longer transit times to Canada. The primary port of entry in Canada is Vancouver, with most FBA centers located around Toronto.
This results in longer transit times compared to shipments to the US, particularly the west coast.
While shipments to the US west coast may take around 30-35 days, transit times to Canada can range from 50 to 60 days. Sellers must factor in these longer transit times to maintain inventory levels and avoid stockouts.
Cross Border Shipments from the US to Canada
A simpler and more viable option is to have your stock in a 3PL in the US and send shipments over the border directly into Canada Amazon FBA.
Or as some sellers are now doing, shipping direct from a warehouse in China to Canada Amazon FBA.
Buying Habits of Canadian Consumers
Canadian consumers have similar buying habits to those in the US. The key difference is the market size; the US has about ten times the population of Canada, resulting in a corresponding increase in business volume.
Despite this, the products in demand and consumer preferences are largely the same.
Interestingly, the return rate in Canada is lower compared to the US. Canadian consumers are less likely to return products, which can be beneficial for sellers.
Handling Returns and 3PL Providers in Canada
When it comes to returns, most sellers on Amazon Canada either have the items destroyed or returned to stock.
Finding a reliable 3PL provider in Canada can be challenging, as not all are familiar with Amazon's processes and requirements.
It is crucial to work with a 3PL that understands the specific needs of Amazon sellers, including building effective Standard Operating Procedures (SOPs). This ensures that returns and other logistics processes are handled efficiently.
Tax Considerations in Canada
Sellers doing over $30,000 in business annually in Canada must register for the GST program.
This allows them to collect and remit GST, a federal flow-through tax. The registration process usually takes about 30 to 60 days, and once approved, sellers can retroactively collect GST paid for the previous six months.
Hiring a local accountant familiar with Canadian tax regulations can simplify the process and ensure compliance.
Non-resident importers can also register for GST and enjoy the same rights as Canadian importers.
As an importer into Canada, no matter where you're based, you have the option of registering as a non -resident importer.
A customs broker will help create a FIOR for you.
Using this method it can take 24 to 48 hours max and you can start to import your goods into Canada.
The CARM Initiative
The Canada Border Services Agency (CBSA) launched the CARM initiative in October 2023, requiring all importers to have a bond. This bond can be purchased through a surety company or customs broker. CARM aims to streamline the importing process and improve compliance, making it crucial for sellers to stay informed about these requirements.
Duty Rates in Canada
Duty rates in Canada can differ significantly from those in the US, even for the same product and Harmonized System (HS) code.
For example, a product with a 2% duty rate in the US might have a 0% or 10% duty rate in Canada. Sellers must verify the duty rates for their products in both countries to avoid unexpected costs.
Canada tends to be more protectionist, meaning more products are subject to duties compared to the US.
Pricing Your Product for Canada
Pricing strategies for Canada often involve converting US dollar prices to Canadian dollars and adjusting accordingly.
Given the lower competition in the Canadian market, sellers can sometimes increase their prices.
However, it is essential to monitor the market and sales trends continuously to optimize pricing strategies.
French Labels on Products
Canadian regulations require that product packaging include French labels. This can be easily managed by adding French stickers to the packaging.
Ensuring compliance with labeling requirements can help avoid regulatory issues and enhance the customer experience.
Conclusion
Importing and selling on Amazon Canada offers significant opportunities for growth and expansion. By understanding the differences in customs regulations, transit times, consumer behavior, tax obligations, and duty rates, sellers can navigate the Canadian market more effectively.
Preparation and local expertise are key to success, making it essential to do thorough research and seek professional advice when needed. By following these guidelines, sellers can maximize their potential and thrive in the Canadian ecommerce landscape.
Ready to get selling in Canada? Contact us today HERE for a call or email HERE.
We have years of experience and have helped hundreds of sellers import their goods hassle free into Canada.
For the full webinar on Importing and Selling on Canada head HERE.