I’d like to take a moment to talk about the problem of shipping to Canada. I know that a lot of online retailers are wondering how to be successful in Canada, and since I’ve started working at Group 3DM, I’ve had my eyes opened on a number of issues that affect a US retailer’s ability to service the Canadian market.
Canada is a smaller market than the US, it has its own regulations, pitfalls and issues. It’s not that it’s harder to do business in Canada. It’s just different, and those differences can make life harder for a US-based company that is looking to break through into the Canadian market. There’s cross-border shipping, customs, a different tax structure, French language issues and more that have to be considered. If your core business isn’t shipping, shipping to Canada can seem a bit daunting.
First, I’d like to share a couple of anecdotes on what it’s like to be a Canadian trying to buy a US product.
I’ve recently upgraded my phone from the iPhone to a shiny new Samsung Galaxy S4. My old iPhone made it through the 3 years I’ve had it thanks, in large part, to the wonderful Defender case made by Otterbox. It’s a fantastic product, well worth the price tag. (about 60$ CAD) It saved my phone on numerous occasions, and I was totally sold on it. I wanted one for my Galaxy S4.
Now Otterbox is a 350 million dollar company, so it’s not a small fish, at least not by Canadian standards, so I assumed it would be a no brainer to sell directly online. Sure enough I found the shopping site and, as luck would have it, Otterbox had a case for sale on day 1, but Canadian retailers hadn’t received it yet. I decided to go online and buy it directly from Otterbox.
Presumably Otterbox should be interested in direct sales. They can sell the case for MSRP and get the extra margin for free. When I put in my Canadian address, however, the rate for shipping to Canada was over half the cost of the product.
I sent an email to their customer service email. What I got back was a manually routed email answer that read: “The email that you sent was directed to an address that is not currently active and will therefore not be seen by any of our representatives.” I call bullshit when the email is responded to 2 days later. Bottom line was “No Service”.
I didn’t buy it. I went without long enough for Canadian retailers to get delivery of the product and bought it retail. Not only did Otterbox lose an incremental profit on the sale, but I admit that, though I still love the product, I would now probably switch if I found an equivalent case elsewhere, just based on their response to my inquiry.
My girlfriend’s prized possession is her Temptu make-up airbrush. Flawless foundation application, blush, etc. I won’t bore my readers with the details of make-up application. She likes it.
I wanted to buy her a cartridge or two for her birthday, so I called some stores. The cartridges are only available online on the Temptu site. At $30 for the average cartridge, they’re not too expensive, but when you get to the shipping… you guessed it. $30 USD for shipping to Canada. In case you’re not keeping up with the math that’s a $100% increase in price due to shipping. I’m not buying that. She’s getting some nice Yves Saint-Laurent for that price. Maybe even Dior.
It’s these kinds of stories, and failures on the part of US retailers that make it seem like doing business with Canada and shipping to Canada is impossible. Nothing could be farther from the truth.
I also want to mention that there are many sellers that simply don’t have an option for shipping to Canada. These retailers are just cutting themselves out of the market next door for no reason at all.
Free trade is a myth. When you cross the border you get taxed. Customs fees and Goods & Services Tax add cost that has to be passed on to the customer. As Canadians we get that. But that doesn’t mean that we’ll just blindly accept that a company is garnishing their pockets by charging an outrageous flat fee for shipping when we know very well what the true charges are.
So what’s the answer? Instead of shipping to Canada you have to ship from Canada. Finding a 3rd party logistics (3PL) company in Canada isn’t even difficult. Expertise can vary from company to company, but even the least competent player in the market will provide an acceptable level of service at a fraction of the cost of shipping small parcels across the border, both in terms of service and price. Even just on delivery speed, a US company’s shipping to Canada will run more smoothly from a Canadian shipping point than from a US warehouse. And they already know all there is to know about regulations and language issues, and can help you navigate all those hurdles with ease.
If you’re looking to find such a company for your operation, try Group 3DM.
I get no commission. I just believe in what we’re doing.
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