New entrants into the Canadian market from overseas are increasing, offering products Canadians are purchasing when seeing (the US), importing, or merchandise they couldn’t access. The question for US-based distributors/sellers is, “Can we send products to Canada from the united states or do we set up shop in Canada.” Both have significant implications.
Throughout the recent downturn, it appears the Canadian consumer’s desire for products of all types outpaced demand from the US and other countries. With weak US earnings, US wholesalers and retailers logically appeared to Canada to push continued business development.
Why Offering Goods to Canadians Makes Sense
The barriers to entry into Canada are few, which means when US companies search for sales growth – Canada makes sense despite its comparatively smaller market size. The states share a country-spanning border, the identical language is spoken, free dealer and favorable trade arrangements are in place and value each other as enormous trading partners. In sum, trade is welcome.
Having said that, there are factors and costs of doing business overseas. Does it make the most sense for US companies to market cross-border on a per order basis? Establish relationships with Canadian vendors and disperse from the united states and supply outlets in Canada via wholesale sales? Establish warehousing and supply in Canada? Set a physical wholesale/retail existence (a la Target, Marshall’s and WalMart before them to name a few)? In this case, you are basically a startup in Canada because you are setting full operations – often too costly and complicated save for big corporations that are making a calculated, capital-intensive investment to expand their merchant market footprint.
Outsourced Warehousing and 3PL Solutions in Canada
Establishing warehousing, distribution, and fulfillment in Canada can be quicker, simpler and more cost effective for US-based businesses – big and small. Best tier warehousing and distribution businesses are often integrated with transported and logistic networks. Further, these warehousing organizations are especially in the business to accept the warehousing and order fulfillment function for remote US customers who establish a sales network in Canada.
The procedure for accessing your US-based businesses products in the Canadian market can be easier than you think. Beyond the cross-border brokerage/duties details to work out with Canadian customs and taxation consequences, the mechanics are rather straightforward.
3PL Warehouse Fulfillment Capabilities
You’ll require product stored and prepared for distribution as Canadian outlets or customers demand it. That means that the warehouse will send your goods by the slide load (to your own Canadian merchant partners) as required. When you still haven’t established retail partners, maybe you are taking online or mail orders from Canadian customers. Your warehousing ought to be equipped to pick, pack, and ship directly to customers. Many times, these warehousing partners complete understand the idea of”drop shipping”. In sum, they act on your behalf to send orders directly to customers “from” you. In summary, you are contracting them to function as a warehouse. An integrated logistics and warehousing spouse will also have the ability to get you great rates on transport – make it courier discounts or cargo prices.
Varying Warehouse Space = Flexible Space, Flexible Prices
Establishing operations in Canada, therefore, don’t demand a massive capital investment. A warehousing partner should let you grow over time and adapt your space needs based on overall development, and seasonal changes. Many times, the bill on the distance that you are actually using at any particular time in the charging cycle – not on a fixed square footage basis. Additionally, you’re billed on a per order fulfillment basis. This all adds up to more closely align costs with real sales and warehouse space requirements. The more stock you hold and the greater the earnings, the more you pay – and inversely. This just makes good business sense and mitigates price risks for US companies partnering with a 3rd party Canadian warehouse.
Location of Your 3PL Canadian Warehouse
Lastly, consider your Canadian warehouse and supply location, location, location. Canada is a nation of 35 million people – potential clients. You may wish to find in the most densely populated consumer markets. Consider the Greater Toronto Area is Canada’s most populated region, which drops what is called the”Golden Horseshoe” surrounding Lake Ontario. This region is home to a 9 million Canadians, or almost 26 percent of the entire population. That’s a market size that rivals any large US market. In actuality, nearly central within the Golden Horseshoe is Burlington, Ontario. It provides a superb warehousing and distribution point from which to establish your Canadian fulfillment operations. It’s near all major highways and minutes from Toronto Pearson Airport located in Mississauga, Ontario.
US companies looking to set up a Canadian presence to cultivate their business have a lot to think about and with careful preparation and comparatively low cost, may discover that partnering with a 3PL and warehousing company in the Greater Toronto Area may set them on a fast path to obtaining a lucrative Canadian customer.