Learning how to sell on Amazon Canada provides great opportunities for small businesses to grow their sales and increase customer awareness of their products in different markets. New programs like FBA Export offer US sellers the ability to reach international customers at no additional cost. Beyond FBA Export, Amazon offers other options for US sellers looking to increase sales in Canada and Mexico. US sellers looking to increase sales in North America can fulfill orders from Canada by using remote fulfillment with FBA, merchant fulfillment, or by expanding their operations into Canada and storing inventory there. Given the number of options available, it’s important for sellers to consider their business’s goals and decide on an option that aligns with their strategy.
How to Sell on Amazon Canada using Amazon US Stocked Inventory
Remote fulfillment with FBA or North America Remote Fulfillment, NARF, is a great option for US sellers that are currently utilizing FBA for US fulfillment. This allows you to sell US-stocked FBA inventory anywhere in North America. It’s possible for sellers enrolled in NARF to exclude Canada or Mexico, as it is not mandatory to have an offering for both. The major benefit of this program is that inventory can be offered without having the inventory physically located in the country. When a seller enrolls in this program, they create offers in the enrolled marketplace. Amazon duplicates US listings for this program by directly copying content from the US listings or translating the listings using the automated service provided by Amazon. When a customer from Canada purchases a product, inventory from US fulfillment centers is used to fulfill the order. Remote fulfillment orders have an increased FBA Fee Charge. Review the increased fees carefully to understand margins on remote fulfillment orders. Through this program, Prime members are eligible for free shipping, with products arriving 5 - 12 days after being ordered. Customers pay import duties on the items they order, taking ownership after the shipping company picks up the items from the US fulfillment center. This is an important detail, as these import duties can vary in cost and may deter customers from placing orders. Amazon recently announced that US FBA users will automatically be enrolled in Remote Fulfillment on July 1st unless users opt-out. Remote Fulfillment is a great option for sellers that currently use FBA fulfillment in the US. Some downsides of the program involve increased FBA Fees and additional costs for the customer related to import duties which may deter purchase.
Sellers also can sell their inventory in Canada using US Merchant Fulfillment. Merchant fulfillment can be expanded to the Canadian marketplace by creating additional shipping templates designated for shipment to Canada. Unlike remote fulfillment, for expanded US Merchant Fulfillment the seller is responsible for import and customs duties and costs not the customer. This makes offers more attractive to Amazon Canada consumers, but it also adds operational and monetary costs for the Seller. Sellers can account for this additional import and customs cost by increasing the pricing of offered products. Depending on your offered merchant fulfilled shipping speed your offer may be at a disadvantage compared to FBA offers for the product. Expanding US Merchant Fulfillment to Amazon Canada is a great option for Sellers who have developed internal fulfillment capabilities. A downside of this option is the additional burden of handling import and customs duties. Also depending on the shipping speed offered, this offer may not be competitive against FBA offers.
Amazon FBA Export Program
Another option sellers have is the Amazon FBA Export program. This is the least involved option to offer US stocked inventory in Canada. The program is a great option for US FBA sellers who want to expand their reach with minimal effort. Depending on the product offered sellers may not be eligible for the program. Through the FBA Export program, Amazon sellers can expand their businesses to over 100 countries at no additional cost. It’s also possible to exclude countries and products from being included in this program. This option is unique in that it does not expand your presence in the Amazon Canada marketplace. Instead, it allows Canadian customers to shop in the Amazon US marketplace and to export their orders to Canada. Amazon decides which products are eligible for FBA Export, fulfills international orders, and ships the products to the international buyer’s address. This program has no additional fees for sellers, however, customers need to pay the international shipping and customs duties. The Amazon FBA Export program is a great option for US sellers using FBA to make US inventory on Amazon.com available for purchase internationally at no additional cost. However, since the program does not offer products in the Amazon Canada marketplace it is not very impactful in terms of building brand awareness and sales.
How to Sell on Amazon Canada using Amazon CA Stocked Inventory
Sellers who want to sell on Amazon Canada with CA stocked inventory have several options. These options are similar to options available for US fulfillment. Stocking and Fulfilling inventory from Canada results in quicker fulfillment, which makes offered products more appealing to Canadian customers. Orders can be fulfilled using merchant fulfillment or Fulfillment by Amazon. Here products need to be offered through an Amazon CA seller account. Separate inventory levels will need to be managed for the US and Canada marketplaces. By stocking inventory directly in Canada, customers receive orders more quickly and do not have to deal with customs or import inconveniences. This makes your offered products more competitive and builds a more positive brand image in the Canadian marketplace. Expanding your business and storing inventory in a foreign country can impact the business in a variety of ways and should be considered carefully. In this article, we will be unable to cover all potential impacts but some things to consider include:
International Business Registration
Additional Tax Types and Rates
Management of separate inventory pools which can complicate inventory management and forecasting
Increased cost of inbounding and removing inventory from fulfillment centers and custom/import duties on inbounded inventory
Please consult with a tax professional to better understand the specific impact of international expansion for your business.
Stocking and fulfilling inventory from Canada is a great option for sellers who want to provide the best Amazon experience possible to their customers in Canada. It's also an excellent option for businesses that have an existing presence in Canada. It's critical to understand both the impacts of expansion on your business internally and demand in the Canadian market for success through this option.
Conclusion
Amazon has created a variety of international expansion programs designed to serve different business types and needs. Given the additional effort and cost associated with selling internationally, sellers may wonder, “Is it worth it to sell in Canada on Amazon?” Sellers need to consider their operating costs and business growth potential in order to determine if expanding their business is going to be profitable.
Understanding the implications of each method described above will help sellers choose the best option for their business. For more information, reach out to Goat Consulting using the contact us button below.