How to Get Started Selling on Amazon Canada
by Matt Ellis
For American eCommerce businesses, expanding into Canada seems like the next logical step. For one thing, Canadian eCommerce has just started taking off in recent years, so the timing is right. Also, the online shopping behavior of our Northern neighbors is similar — but not identical — to that of Americans, so there’s no big adjustment. Plus, Canadians have no problem buying across the border: the same study above shows that 83% of Canadians have bought U.S. products online.
Given the country’s proximity, shared language and similar culture, selling in Canada could be a way to maximize profits with minimal effort. And few know that better than Amazon.com, Inc. ("Amazon").
Amazon makes it fairly easy for Americans to sell in Canada, although there are a few thorny areas that need some clarification, particularly how to open a Canadian seller account and how to modify your sales strategies for Canadian markets. So, in this installment of the International Amazon series, let's take a look at everything you need to know to catch some congenial Canuck customers.
How to Open an Amazon Seller Account in Canada
Just like selling on Amazon Mexico, you first need a North American Unified Account. Depending on when you first registered to sell on the Amazon marketplace, you may already have a NAUA without realizing it. Check your Language Switcher in Seller Central: NAUAs have options for other countries; accounts for only the US don’t have those options. If you have a strictly American account, you can request approval for an upgrade at Amazon Seller Support.
However, to begin actually selling in Canada, you still need to register your business as a Non-Resident Importer (NRI), which gives you a Canadian business number. You can obtain yours by calling 1-800-959-5525, or by submitting an online application here.
If you sell more than $30,000 each year in taxable items, you also have to register for a GST/HST account with the Canadian government.
FBA vs. Self-fulfillment in Canada
Your first big decision is whether to use the Fulfillment by Amazon program or ship the products yourself from the States. As with selling in any foreign country, FBA’s advantage is that they handle much of the red tape for international shipping so you don’t have to.
Other benefits of FBA include help with customer service and access to exclusive Amazon Prime shipping options. But perhaps the biggest advantage of using FBA in Canada is cheaper shipping fees for your customers, so you can keep your prices competitive with native merchants.
Sometimes, it’s as simple as calculating the costs of fulfilling with FBA or fulfilling the items yourself and choosing the cheaper option. If you can predict what your best sellers in Canada might be, use Amazon’s FBA Revenue Calculator to handle the math.
Best Practices for Selling in Canada
Despite their similarities to the U.S., Canada is still a foreign country and as such there are some cultural and business differences you’ll need to navigate through. Consider these best practices for selling in Canada:
Check if Your Products are Legal
Double-check to make sure your products are legal in Canada by reviewing Amazon.ca’s lists of both Prohibited Content and Restricted Products. This is essential for food and other consumables; pay extra attention to your ingredients.
Is the Exchange Rate Worth It?
At the moment, the Canadian dollar underperforms the U.S. dollar, making American products innately more expensive. Before making the move, check out your Canadian competition to see how much they would undercut your price, and do some product research to determine whether consumers would be willing to pay extra for your products.
Online Shopping Behavior in Canada
Ecommerce Worldwide posted some eye-opening statistics about the demographics behind Canada’s online shoppers. (Editor's note 8/13/19: Unfortunately, the website is no longer available.) Here are some of the key takeaways:
- While younger consumers dominate eCommerce, the difference is less than average — meaning targeting older shoppers is slightly easier in Canada than the U.S.
- Canada somewhat lags in mobile device usage (attributed to the country’s high data costs), however online shopping on smartphones is just now starting to fit global standards. That means a solid online shopping experience now gives you an edge before a portion of Canadian companies can properly catch up.
- Shipping costs are by far the most common reason Canadians don’t buy online more often. This puts American sellers at a disadvantage since their prices are higher from the start.
Know What Sells in Canada
While the actual order fluctuates, the same five products categories seem to dominate Amazon.ca:
- Video Games
Back in 2013, Apparel and Hair/Beauty also ranked highly, however they have declined in recent years.
French Packaging and Listings
Some products like food and other consumables require bilingual packaging by Canadian law. However, Amazon doesn’t enforce this policy, making the issue somewhat of a gray area.
Regardless, the most important thing to remember is that Quebec residents appreciate, if not prefer French. That means packaging and posts exclusively in English are going to lose you sales in one of Canada’s biggest markets. Legal compliance aside, using French is just a better business strategy for satisfying your shoppers.
If you want to read the fine print on Canadian retails laws for Amazon, here’s a chart from Amazon.ca’s help desk.
Do the Math
While selling on Amazon.ca may seem an easy way to expand your territory without shipping overseas, there are a few obstacles, chief among them are the exchange rate and shipping fees. For these reasons, US sellers have to take thoughtful measures to compete in Canadian markets.
Before deciding whether to expand into Canada, do your research to see if it’s cost effective. You could end up losing money either by cutting your shipping costs to stay competitive, or simply by paying for your inventory to sit unsold in a fulfillment center. Luckily, the right answer can be revealed through predictive analysis and crunching the numbers.
Originally published on May 29, 2018, updated September 11, 2019
This post is accurate as of the date of publication. Some features and information may have changed due to product updates or Amazon policy changes.