Do you intend to begin selling products on Amazon FBA Canada? Among Canadian online marketplaces, Amazon.ca is probably the greatest place to start. Additionally, Amazon.ca is a simple method to increase your sales by 10% to 20% if you're an American or someone from anywhere else who already sells on Amazon.com.
Regardless of your nationality, You will learn in this article how to begin selling on Amazon.ca with this guide.
In this article you will learn:
- Amazon FBA Canada: Why Should You Sell There?
- Should You Use North America Remote Fulfillment?
- Steps for Adding Your Listings from Amazon.com to Amazon.ca
- Popular Misconceptions About Americans Doing Business in Canada
- Important Things to Consider Before Selling on Amazon FBA Canada
- GST/HST and Sales Tax
- Five Simple Steps to Launch Your Amazon.ca Business
- Ship a Small Goods to Canada
- Add Products to Amazon.ca
- Activate Sponsored Ads
- Check the Currency Rate Each Month
- Creating a Business Number in Canada
- Conclusions
Amazon FBA Canada: Why Should You Sell There?
- Obtain a 10%–20% increase in revenues.
- Significantly less rivalry in contrast to Amazon.com
- While there is little competition, start building up your listings and reviews.
- permits the shipping of goods from non-Amazon vendors to Canadians from within Canada
- less complicated sales tax
Since 10% of US residents live in Canada, selling in that country should increase sales of any given product by at least 10%. Take the Instapot below, for instance. Its sales in Canada, according to Helium 10, are approximately $535,000. The similar model sells for about $2.5 million in the United States. Put differently, sales in Canada account for about 20% of total sales in Canada.
The fact that there is less rivalry in Canada accounts for the reason why many things sell better than they should given the size of the country's population. On Amazon.ca, you could be able to rank a product quite quickly that you might not be able to rank for on Amazon.com.
The competition will only grow stronger as Canadians use Amazon.ca more and more. For this reason alone, I believe that now is the best moment to establish your reviews and rankings in Canada and gain a first-mover advantage if you intend to grow to that country in the future.
The ability to send Canadian orders directly from your website to Canadian customers via multi-channel fulfillment is another advantage of selling on Amazon.ca (you cannot utilize MCF for foreign orders). For Canadians, this is a huge benefit as it avoids customs and lengthy transit periods.
Furthermore, Amazon will typically collect federal sales tax for you, and Canada has far simpler sales tax laws than many other countries (particularly in Europe) (see more information in our sales tax section below).
Should You Use North America Remote Fulfillment?
NARF, or North America Remote Fulfillment, is a feature that Amazon launched in 2019.
By signing up for this service, you can have your products from Amazon.com appear on Amazon.ca, and Amazon will handle the shipping of those items from the United States to Canada. Shipment, taxes, and fees will all be taken care of by Amazon and charged to the customer. The disadvantage of NARF is that it costs more and takes much longer to transport to customers than inventory that is physically kept in Canada.
For individuals who would like not to really go through the trouble of sending inventory directly into Canada, this arrangement is great. But when you use NARF instead of physically shipping inventory into Canada, your sales might frequently be 90% lower or even higher.
Steps for Adding Your Listings from Amazon.com to Amazon.ca
It is now simple to move your listings from Amazon.com to Amazon.ca, and yes, your reviews will also move because Amazon has a Unified North American account.
Adding your current ASIN using the Add a Product option from the Inventory menu is the simplest way to get started.
Amazon will automatically import your current bullet points, descriptions, and images. You have the option to change the descriptions and bullet points. Nevertheless, unless you utilize this manager, any changes you make to your photographs will take effect immediately.
Popular Misconceptions About Americans Doing Business in Canada
The following are some false beliefs that people have regarding Americans selling to Canadians:
- You'll be required to pay income tax in Canada.
- In comparison to the US, Canada has more intricate and varied product laws.
- It is necessary that you open a bank account in Canada.
- Without a visa, Americans can work in Canada.
Since we are not accountants, any money you earn in Canada is typically tax-treaty exempt (provided you do not maintain a permanent presence there). For Canadians conducting business in the US, the opposite is true. But to be sure of your tax obligations, consult an accountant. But once you reach a particular sales threshold, you will undoubtedly have to pay sales tax.
When it comes to product safety regulations, labeling, and other related matters, they typically resemble those in the US (unlike, for, those in Europe, where they differ significantly). As usual, though, before importing, find out from a customs broker what criteria might apply.
You can keep using your American bank account to sell on Amazon.ca; Amazon will take care of converting the money into US dollars (usually with a 3.5% commission). Opening a bank account in Canada is not necessary.
You need a visa in order to work in Canada as an American. In Canada, you are able to conduct business-related visits to clients and accountants, among other things. Put another way, you can list your products on Amazon.ca and effectively pay skilled Canadian workers to ship them, but you are unable to open your own warehouse and begin product delivery without the necessary work permit.
Important Things to Consider Before Selling on Amazon FBA Canada
·In Canada, Amazon FBA fees could be higher.
- The value of the currency fluctuates.
- Duty rates are frequently higher in Canada than in the US.
- Not one carrier affiliated with Amazon is flying to Canada.
- To legally import something into Canada, you require a Business Number.
- If shipping to Canada via UPS, FedEx, or another courier, make sure to deliver the package DDP (Delivered Duty Paid); if not, Amazon will refuse the cargo.
- Federal sales tax is imposed in Canada (GST)
Keep in mind that Canadian FBA fees may be higher depending on the products (especially smaller and lighter items) as you try to determine your potential profitability in Canada. When choosing your list prices in Canada, be sure to factor in your Amazon FBA fees; don't assume that Amazon.ca and Amazon.com have the same FBA rates.
(Ignoring the 2018 China-US trade conflict) Canadian duty rates are likewise typically 25 to 50 percent higher than those in the US.
You have almost double-paid duties for both the US and the UK if you import products from China into the US and then export them back to Canada (you can legally file to get your US duties refunded, but the paperwork is very expensive).
Pro-tip: Your items' nation of origin is always the same. For instance, if a widget is imported into the US from China and subsequently into Canada, Canada will still identify it as "Made in China."
Additionally, Amazon does not have any affiliated carriers for sending your products from the United States to Canada. Shipping from the United States to the Amazon.ca warehouses must be arranged by you on your own.
To formally import into Canada, you will also want what is known as a Business Number in Canada. However, applying for it is simple.
Make sure all tariffs and taxes are paid before you arrive at Amazon.ca when shipping to Amazon.ca FBA. You can ship via "DDP" (Delivered Duty Paid) with UPS and FedEx, which essentially passes these costs on to you and prevents Amazon from rejecting your shipment.
GST/HST and Sales Tax
The GST/HST is the name of the federal sales tax in Canada. It's incredibly easy compared to the US. There are just 13 provinces and territories, and each determines its own GST/HST rate. Everything is remitted in a single form.
Additionally, things became much easier on July 1, 2021, when Canada implemented marketplace tax collection (MTC) regulations. This means that for any seller who is not registered for GST/HST, Amazon will collect and remit the applicable taxes.
Four provinces—Quebec, British Columbia, Manitoba, and Saskatchewan—each have their own sales tax laws, which adds a little complexity to the situation. Nevertheless, since Amazon now collects sales tax for Saskatchewan, you really only need to worry about three jurisdictions.
You are expected to collect these, but it won't stop you from importing into Canada or selling on Amazon.ca if you don't register. Furthermore, Manitoba has a population of less than 1.4 million people, and Quebec has a high economic threshold of $30,000 that you may not exceed. For better or worse, not all foreign vendors register to receive sales tax from their home province.
Five Simple Steps to Launch Your Amazon.ca Business
The simplest method for beginning to sell on Amazon.ca is provided here.
- Get your feet wet by sending a modest package to Canada, then work your way up to pallets.
- Create a product listing on Amazon.ca.
- Activate Canadian Sponsored Advertising!
- Keep an eye on the exchange rate each month.
- Sign up for HST and GST.
Ship a Small Goods to Canada
You most likely sent in a box or two of merchandise to test out FBA rather than a whole 20′ container, much like you did when you first started with Amazon.com FBA. Amazon.ca is in the same boat. To start, send one or two boxes using FedEx or UPS. Sending to Amazon.com follows nearly the same process.
Sending your items via UPS, FedEx, or another provider that lets you get charged for duties and taxes—also known as DDP—is required. Send nothing via USPS. If you do, Amazon will refuse your shipping and demand payment for taxes when your purchase is delivered.
Pro-tip: Orders under $800 are exempt from customs and taxes in the United States due to the $800 de minimis value. This de minimis value is only $40 in Canada.
Add Products to Amazon.ca
When deciding which inventory to list in Canada will be necessary. Amazon has just made it possible to search for the Amazon.com ASIN using Seller Central's "Add a Product" function, and all of the listing information will be transferred across.
Your Amazon.com reviews will follow you over until you receive your very first Amazon.ca review.
You still need to set up a few more things for Amazon.ca, such as shipping, but it should only take a few minutes to complete..
Activate Sponsored Ads
If you use Sponsored Products for Amazon.com, the first thing you should do is start using them as soon as your inventory is sent to FBA. You'll pay a lot less than you would on Amazon.com (check out our numbers below; we only pay 0.2% ACoS!).
Check the Currency Rate Each Month
You're probably just translating U.S. dollars to Canadian dollars and possibly adding a little margin when you price your products in Canada. Keep an eye on this conversion rate every three or four months as it will fluctuate, and adjust your rates appropriately.
Creating a Business Number in Canada
You can probably get away with this requirement for your first few shipments if you're shipping things up to Amazon.ca FBA using UPS or FedEx as a trial. But as soon as you start working in any sizable amount, a company number is required.
You will undoubtedly require a Business Number if you are sending anything that needs to be cleared by a customs broker, such as an LTL cargo. All you need a company number for is to be able to import goods into Canada and track and remit GST/HST. It is comparable to the US. EIN.
In Canada, registering for a business number is rather simple. All you have to do is fill out form RC1. There isn't an online option, so you can either fill it out by mail or fax, or you can just call 1-800-959-5525, and someone will swiftly set you up by asking you all the necessary questions over the phone. After completing it, a business number will be sent to you in ten days. Your GST/HST and importer numbers are available when you register for this company number; you may find them on the RC1 form. For each, there are just check boxes.
As an alternative, you can obtain a business number from your customs broker for free or for a little price (less than $500).
It should take no more than five to ten minutes to complete the self-explanatory form (just leave it blank when it asks for your social insurance number). It's advisable to enter less than $100,000 when asked about your projected taxable sales in Canada, as you will have to prepay half of your estimated GST. (The Canadian Revenue Agency will determine in your second year if you need to prepay a percentage of your GST/HST).
CONCLUSIONS
We hope this post has clarified our reasons for selling on Amazon.ca (as well as why some people shouldn't), as well as how to get started. For many businesses, Amazon.ca has been a major growth engine since late 2015, and We believe it can do the same for many other businesses looking to expand their sales by 10–20%.
Have you sold anything on Amazon.ca or any other Amazon marketplace before? Are you looking to sell on Amazon.ca and have any questions? Leave a comment below if so.
