Canadian Amazon Market Place ( Amazon.ca) is often the first place US sellers looking at when considering expansions. Since I have expanded my own Amazon.com store to Amazon.ca with great success, I am happy to provide some insight to help you make the decision.
Is selling on Amazon.ca Canada FBA worth it or not? Like any business, selling on Amazon.ca can be profitable if you do the right things. However, there is a higher chance of being successful if you are already selling on Amazon.com. Many FBA sellers can continue their success in Amazon’s Canadian Marketplace using the FBA service. However, if you are selling as fulfilled by the merchant ( FBM ), it might not be worth it, depending on how much you are paying your logistics service provider.
Because of the complexity invovled with FBM, we are basing the contents assumping you are selling using FBA exclusively.
Six Reasons that Make Selling on Amazon.ca using FBA Worthwhile
- Canadians enjoy shopping online as much as their neighbor across the border
According to Statista.com, Canadians spent over CA$1.66 billion dollars shopping online in January 2020. This is a 9.9% year over year growth from the same period in 2019. A total of 28.1 Million people made a purchase at least once online during 2019.
With a total population of just over 35 million, it means 75.2% of Canadians are shopping online. This makes Canada one of the top countries in terms of eCommerce penetration.
- Amazon.ca is the most popular online shopping destination for Canadians
A further study by Statista.com revealed that the most popular online store in Canada in 2018 is Amazon.ca, totaling $35.21 million US dollars in revenue. And the second most popular? You guessed it, it’s Amazon.com, with $11.84 million US dollars in annual revenue.
- Amazon.ca has a lot less competition compared to Amazon.com
It is granted that Canada is a much smaller market, but it means the competition is much smaller as well. With just 1/10 of the population of the US, Canada has way fewer active sellers doing business on Amazon.ca. This makes it a lot easier and cheaper to get your products ranked for page one. The number of sales required for most product categories to rank on page one is a lot more reasonable.
- Increased Profit Margin on Most Product Categories
With less competition, the same product can usually be sold for 20% to 30% higher on Amazon.ca compared to Amazon.com. Depending on where you source, there might be a slight increase in logistics cost when shipping to Amazon.ca’s FBA warehouse, but in general, the added profit margin will far out weight the added logistics cost.
Because there are less competition, the cost of running sponsored ads is also lower. You can bid on keywords with a higher volume without burning a big hole in your pocket. Combined with the higher price and lower cost, you can probably get a nice 15% to 20% boost in profit margin.
- Little or none modifications required for your existing product line
Depending on the product categories, there might not be any product modifications required to sell on Amazon.ca marketplace. Canadian retail market has similar requirements as their US counterparts, and if you are already producing products that are in compliance with the requirement, chances are you do not need to make any modifications to your existing product line before you can make them available on Amazon.ca.
- You can leverage your existing product reviews
Since Amazon permits you to sell on both Amazon.com/ca using the same account. You can migrate your existing product listing from Amazon.com to Amazon.ca with a click of a button. Once you have global selling enabled, you can request to have your Amazon.ca product listings to share your Amazon.com product listing’s reviews. So you do not have to start from scratch again. This will make your journey to sell on Amazon.ca a much simpler one.
Important Things To Consider For Selling on Amazon.ca
When trying to sell across the border, there are quite a few things a seller must pay attention to as it is very easy to make a small mistake and lose your hard-earned profit.
Make sure your product has the correct labeling
According to the Consumer Packaging and Labelling Act and Regulations, all products sold to consumers in Canada require bilingual labels and instructions in both English and French. If your products were initially designed to sell in the US, they might only contain English for labeling. If you are playing everything by the book, it is best to include a french version of your labels and instructions in your product’s box when shipping to Canda.
This requirement, however, can be exempted in certain situations. If you are only selling these products as “market testers”, then you do not need to put bilingual labels. This makes it very convenient for US sellers to just ship a small number of products to Amazon.ca FBA warehouse and test the market response without needing to incur a relabeling cost. You can find out more about the exemption clause her
Under certain conditions, products considered to be “test market products”, as defined by the Regulations, may be exempted for up to one year from the bilingual labeling requirements.Consumer Packaging and Labelling Act and Regulations, Canadian Goverment
Even if you find yourself not eligible for the conditions of the bilingual labeling requirement, it doesn’t cost a lot of produce a sheet of paper with your product’s instructions and labels in French. In reality, this bilingual requirement is not strictly reinforced however. If you want to take the risk and ship products that only contain English labeling and save you some time and money, it is completely up to you. But I have not seen any Amazon sellers getting penalized for not following this rule by the book.
Confirm if your product has additional restrictions
Some products may be subject to additional certification and or restrictions when being sold on Amazon.ca. If you are in the toy or baby category, please pay special attention to make sure your existing products in the US are in compliance with the requirements posted. Amazon provides a basic screening mechanism when a listing is created, but in some situations this is not enough. It’s better to do the work yourself and know for sure before you make the investment.
How Do I Become an Amazon FBA Seller in Canada
If you haven’t enabled selling to Canada during signup, Amazon makes it very easy by way of the unified North American seller account. You can access this functionality in your seller central account via Inventory > Sell Globally Menu. This is also where you can find opportunities to sell to European countries.
Do I Need a Business License to Sell on Amazon Canada
If you are already fully set up to sell on Amazon.com, you do not need to apply for an individual business license to sell products in Canada via Amazon.ca. Simply provide your full legal information and tax status in the Account Info tab, and you are all set. You can access your tax settings by logging into your seller central, and choose Settings -> Tax Settings in the main menu.
Selling to Canada as a foreign entity will slightly make your listings more competitive as Amazon.ca does not collect sales tax if you are an international seller. This transfers to a saving of at least 10% to 12% of the sales price. Some buyers are actively looking for products that are offered by foreign sellers to save some more.