New and existing online sellers looking to expand their businesses via an internationally recognized marketplace would appreciate the perks that come with the Amazon platform. To enhance convenience while leveraging this platform to promote sales, Amazon has taken the burden off online merchants’ shoulders by introducing Fulfilment by Amazon FBA Shipping.
This program implies that Amazon sellers no longer have to worry about storing, packaging, and delivering orders. Likewise, the stress associated with processing returns and exchanges is no longer an issue. In other words, Amazon does the heavy lifting, including customer service. What’s more? Amazon Prime eligibility is extended to sellers’ products.
Identifying Existing Limitations
Although Amazon FBA solves several aching problems for sellers, there is one limitation Canadian merchants may experience using the Amazon.com platform. Selling products on the main platform with the intent to reach Canadian customers may be impeded by no other entity than Amazon, itself — and, of course, by default.
Such products don’t get listed in Canada. Yes, that’s right. Canadian consumers won’t be able to see these items, which means that a Canadian merchant would be losing a huge market share of 35 million customers. But there is a solution, these sellers can use the Amazon.ca platform to increase sales and profit by, at least, 10%. So, there is still more room for business expansion.
What Makes FBA Shipping Special?
To answer this question, it is important to take a look at the Canadian commercial sector. Previously, e-commerce in Canada paled in comparison to that of the United States. That is no longer the case. Recently, Canadian shoppers have ranked Amazon as their preferred online shopping destination.
An example is seen in the 2019 report when sales hit $1.85 billion (CAD) that year. It turned out that more than 28 million Canadians made purchases online. But that’s not all. The revenue generated within the retail e-commerce sector clocked $25.4 billion in that year, and it is anticipated to surpass $33 billion by 2024.
With these stats in hand, harnessing the Canadian market share will boost a seller’s online business, the reason being that:
- ca is less competitive than Amazon.com
- Since the competition is low presently, Canadian sellers can build listings and reviews to establish dominance in their respective niches
- Sales tax in this country is less crunching than that of the U.S.
- Using multi-channel fulfilment, merchants may ship directly from Canada to Canadians. This procedure shortens transit duration and eliminates duties
- And then, there is the potential to increase sales by a minimum of 10%
For Canadian sales tax, the country implements harmonized sales tax. What this means is that most provinces will only have to collect one tax (GST/HST), compared to the U.S. sales tax. It implies that merchants can remit their taxes in a single form.
Why Should Canadian Merchants Utilize Amazon FBA?
Unlike the merchant fulfilment network (MFN) where online vendors ship items from their homes, companies, or warehouses, in response to customers’ orders on Amazon, FBA makes e-commerce more seamless. More so, this e-commerce program does the following.
Eliminates Direct Customer Service Problem Handling
Processing several requests at the same time, while handling customer complaints can be a nerve-racking ordeal. Prolonged shipping time can affect an online seller’s credibility. Likewise, damaged packaging can affect future patronage.
But these problems are now in the past as Amazon is equipped with a robust processing and delivery system that handles tons of requests and likely complaints efficiently.
Provides Reliability and Scalability
Shipping to Canadian consumers via FBA has never been easier. Unlike MFN shipping that may come with some hassles, FBA makes it easy for merchants to meet deadlines conveniently and consistently.
Vendors don’t have to worry about investing more capital or workforce to expand their online businesses. Expansion is possible through various FBA services, like FBA Pan-EU, FBA Small and Light, Multi-Channel Fulfilment, FBA Export, and FBA Subscribe & Save.
Increases Business Competition in the Canadian Marketplace
Since online vendors can now match up to Amazon’s “2-day shipping” deadline, process timely shipments consistently, and provide excellent customer service using the Fulfilment by Amazon e-commerce program, they have more edge over those without this leverage.
Setting Up FBA for Amazon.ca — The Process
Creating Fulfilment by Amazon in Canada is straightforward and similar to creating one for Amazon.com. Sellers must go through the following steps:
- Verify that their products are not on the list of prohibited items in Canada
- Find out the cost of FBA for products offered, using a beta calculator
- Check out the FBA shipping costs in Canada
- Find out how to import commercial goods into Canada
- Create Amazon.ca product listings. After adding the product to the catalogue, specify FBA inventory
- Understand Amazon packing guidelines, as well as shipping and routing requirements
- Develop a shipping plan before printing shipping ID labels
- Select one of the Amazon Fulfilment Centres in Canada to send inventory to
- Implement a marketplace stock-keeping unit (SKU) on the products
- Manage both Amazon.com and Amazon.ca accounts using North American Unified Accounts (NAUA)
- Create an advertising strategy for Amazon.ca
Factors to Watch Out for When Shipping to Canada Via FBA
Online vendors that want to target the Canadian marketplace should be aware of the following facts.
- The exchange rate has the potential to fluctuate, affecting price. This element necessitates sellers monitoring the rate on a monthly or quarterly basis. They can also convert Amazon.com pricing to the Canadian equivalent to better understand what prices to put on Amazon.ca.
- FBA fees on products may be higher in Canada, depending on product type — and so is the duty rates.
- Importation into Canada would require a Business Number
- Canada implements goods and services tax or GST
- To avoid Amazon rejecting shipments, online merchants sending items to Canadian consumers via FedEx, UPS, and other delivery systems need additionally provide Delivered Duty Paid (DDP), an agreement that indicates the seller is liable for the risks and expenses involved with delivery.
Unlike the United States, Canada offers a promising e-commerce industry that is yet mostly unexplored. For online businesses seeking expansion, this means that they still have more market share at their disposal, which may be lucrative if well implemented.
By setting up an efficient Amazon.ca merchant account, sellers may take advantage of the market and get an additional 10-20% in sales. The products listed will be visible to the Canadian market without jeopardizing their U.S. counterparts.