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Canada: How to cash in on foreign product distribution

You’re a U.S. business looking to enter a new, international market. Determining where to start is the first decision to make. Consider Canada. Often affectionately called the 51st state, Canada makes for an easy transition for your product because it shares a number of common traits and habits with the U.S. Our economies are also very tightly linked thanks to the North American Free Trade Agreement and Canada is the second largest importer of U.S. goods. Here are some things to think about when considering Canada as your first step into international markets.  


Do

Do go after the Canadian market

Canada is a lucrative next step for businesses that have had success in the U.S. and want to take the brand or product global. Since the U.S. and Canada make up the second largest trade relationship in the world, Canada is a simple yet profitable market to enter with minimal risk involved. The real question would be, “Why not go after the Canadian market?”

Do understand the demand for U.S. brands in Canada

Canadian consumers frequently adopt U.S. brands and products. As reflected in buying trends, many are already familiar with U.S. brands and are hungry for new ones. Any business should realize, though, that even if Canadians want U.S. brands, they may not want it at the same price point or distributed in the same way, such as retail or e-commerce. Product categories that are underserved or non-existent may seem like the key entry point, however, be sure that your product is meeting a consumer need.

Do know the shopping habits of Canadian consumers

Businesses should have an understanding of how Canadians allocate their disposable income and which products they are already purchasing. This way your U.S. business can position itself where there is consumer demand and necessity, increasing your chances of success. 90% of the 35 million Canadian citizens live within 150 miles of the border, and they will go as far as crossing the border in order to get the foreign products they desire. Canadians are also rapidly purchasing U.S. based products via e-commerce platforms so they can get their favorite foreign products delivered right to their door.

Do find a Canadian logistics partner

Working with a Canadian logistics partner that understands the country’s marketplace can make a business’s international launch as seamless as possible. A Canadian logistics partner will help you navigate the laws and regulations that come with international distribution and they assist with customs clearance and brokerage. This will eliminate lengthy delays and added costs at the border, meaning Canadian customers get their product on time without having to pay additional fees or taxes. With a Canadian logistics partner, you’ll be able to keep Canadian customers happy and avoid negative consumer experiences, ultimately increasing retention rates and profitability. 


Don't

Do not ship product without coordinating U.S. to Canada logistics

If you’re wondering how to handle the logistics to get your product in the hands of the consumer, you’ll want to make sure you have this strategy in place. There are various ways to ensure the product reaches the consumer in a timely and efficient manner, but before sales begin, your business should have a firm grasp on how you’ll be warehousing and transporting the product into Canada. If you choose to store the inventory in the U.S. but want it shipped into Canada at the lowest competitive rates, then it is a good idea to partner with a vendor who can handle logistics and freight from the U.S. to Canada. You may also decide to store the goods in a Canadian facility which can handle most, if not all, aspects of product fulfillment and returns processing so that you can continue what you do best – selling product. Warehousing goods in bulk and shipping from facilities in Canada means your customers’ orders have significantly lower shipping rates and will reach them faster. 

Do not ignore guidelines and regulations

Every country has a different set of guidelines and regulations that affect certain products before, during and after they have been imported into the country. If a business tries to sell product without following these guidelines or submitting the necessary paperwork, then legal issues may arise; the business can be fined and the product may be pulled off shelves until it meets all of the requirements. In Canada, partnering with a vendor who can help manage product documentation is a definite way to ensure the product meets the requirements and is suitable for Canadian consumers.

Do not forget about taxes

International countries also differ in their sales tax percentage. Before a business ships items into Canada, they should know the duties and fees associated with each province and at the border that are going to affect the cost of shipping and handling. If the product is being sold via e-commerce platforms, you should also make sure the website is set up to account for the taxes in each country you are selling to so that it adjusts the pricing structure accordingly. 

Do not rely on your current packaging

When selling products to a new foreign market, the packaging should be easy to understand for the new consumers. Instead of using the same packaging that is used in the U.S., you should adjust the new packaging so that the information is in the country’s official or primary language. This will make it easier for the new market to adopt your product and learn about its uses. In the case of Canada, both English and French are considered official languages so most labels must include information in both. You may also want to consider how the market responds to certain types of labeling: maybe they prefer visuals of how to use the product, or maybe they want the key information to be bold or in bright colors so it stands out. 


Summary
Jumping cartoon

Due to its overwhelming similarities with the U.S., Canada is a perfect starting point for an international product launch. There are numerous benefits when selling products in Canada but it is critical that businesses understand the market thoroughly. As the Canadian economy grows and improves, citizens’ purchasing power is bound to increase, indicating that now is an opportune time for U.S. companies to enter the marketplace. Many businesses find value in partnering with a Canadian-based vendor who understands the regulations and requirements, and can help facilitate the entire logistics process. Canadian vendors will actively oversee the logistical process of importing products into the country and can provide turnkey services that walk you through each step. By partnering with a vendor, your business can efficiently launch a product into international markets without needing to become an expert on the various government and regulatory matters. With resources like this, it makes perfect sense for U.S. businesses to launch products in this highly comparable market and begin selling to Canadian consumers.


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Photo Credits: Toronto by Michael Gil via Flickr; Check Man, Cross Man and Jump Man © ioannis kounadeas - Fotolia.com

Steven PageFounder and President

Steven Page is a serial entrepreneur with 28 years experience in successful entrepreneurial ventures, 20 years specifically in the Natural Products/Nutraceutical industry. Mr. Page’s entrepreneurial career started when he was in University when ...

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