Shopping online has become increasingly popular in recent years giving many merchants a new and improved selling platform. Buying and selling are no longer limited to your immediate area or catalog subscribers. Now merchants can reach customers nationwide, even internationally, opening up even the most unexpected sales opportunities.
As the ease of online shopping continues to grow, shipping costs and international customs laws continue to evolve as well.
Thankfully, Canadian fulfillment centers are designed to help you keep up with the ever-changing systems and give you a competitive advantage over other eCommerce merchants.
The Need for a Canadian Fulfillment Center
Congress passed a law in 2017, Section 321, that now allows any items valued under $800 a day to enter the US duty-free. Although it was initially in view of allowing tourists to bring home tax-free souveniers, eCommerce merchants can now use this law to their advantage. How so?
When American companies buy products in bulk from overseas, they are taxed anywhere from 7.5 to 25% of the estimated value if the shipment is valued over $800. This adds a hefty cost to buying abroad and reselling within the US.
The good news is that there is a simple way for American eCommerce merchants to bypass the tax altogether using the stipulations mentioned in Section 321.
Because there are no hefty taxes on goods coming into Canada, eCommerce merchants can now order products and send them directly to a Canadian Fulfillment center. The center not only houses the items, but when an order is made, the items are labeled, packaged, and shipped all directly to consumers from the Canadian warehouse.
The Canadian fulfillment center ensures that your goods never exceed the $800 daily allowance in shipments.
How a Canadian Fulfillment Center Gives You the Competitive Advantage
If you’re not partnered yet with a Canadian fulfillment service you’re either 1) not making much money on your products or 2) selling products at a much higher price to pay for the customs tax.
Both of these scenarios put you way behind the competition, specifically eCommerce merchants stationed overseas. Foreign merchants sell to American customers by sending their goods directly without having to pay any duties. Meanwhile, you’re buying in bulk from the same companies, paying duty, then reselling to American customers for double the price just to make ends meet.
When consumers realize they can get the exact same product for half the price by ordering from oversee companies, American companies quickly fall behind.
Fortunately, Canadian fulfillment centers give eCommerce merchants a competitive advantage.
By partnering with a Canadian fulfillment center, you can ship your products directly to a Canadian warehouse where your goods are stored, packaged, and shipped directly to your customers as they order.
Working with a fulfillment center gives you the same competitive advantage that overseas merchants have. It allows you to ship directly to customers while still getting discounted items thanks to buying in bulk.
Teaming up with a Canadian fulfillment company allow you to:
- Save money by buying in bulk
- Avoid paying high tariffs at customs
- Store items without paying for a warehouse
- Spend less time packing and shipping
- Sell items at a lower price than competitors while still turning over a large profit
- Spend more time advertising and collecting customer feedback for a better customer experience
Is Working with a Canadian Fulfillment Center Right for Your eCommerce Business?
The short answer is yes. It is in the best interests of your eCommerce company to hire a Canadian fulfillment center.
You’ll be able to stay ahead of the competition by offering lower prices to your consumers thanks duty free shipping even when you buy in bulk. Not only will Canadian fulfillment save you money, but it will also save you time and headache dealing with packing and shipping.
If you want to have the advantage over other eCommerce merchants, Canadian fulfillment is the way to go.