Being an Amazon seller can be a great way to leverage the Amazon brand while selling your products, and if you are based in Canada, you may sell on the Canadian or American Amazon site. To be successful, you need to be aware of the pros and cons between these two approaches, and understand how you may need to embrace different practices for each site.
Simply put, you reach a much larger audience on the U.S. Amazon site than you do on the Canadian site. However, while the American site offers more customers, it also has tighter profit margins. If you plan to only sell a few items, you may want to focus on Amazon Canada, but if you hope to sell a large volume of items and don’t mind a relatively lower profit margin, Amazon U.S. may be better suited to your needs.
When you are researching the most effective techniques for Amazon sellers, check whether the advice is focused on the American or Canadian site, as there can be differences between the two. For example, it is commonly shared wisdom to only sell ranked products on Amazon U.S.; the sheer volume of inventory makes it hard for shoppers to find items that aren’t ranked. However, on Amazon Canadian, sellers report success selling unranked items with brand recognition or collector appeal.
Crossing the Border
Ultimately, as an Amazon seller, you may decide to list products on both sites. In this case, you have to consider the implications of crossing the border. Within Canada, if you ship taxable goods to a province with PST, you typically have to collect the PST and submit it to the Ministry of Finance in that province. Additionally, as of 2016, once you sell more than $30,000 in taxable items, you need to register for a GST/HST account with the Canada Revenue Agency, and at that point, you need to collect the applicable sales tax in all of the provinces where you ship items.
If you are shipping to the United States, the issues become even more complicated. You may need to fill out customs forms, pay excess shipping costs, or face duties and fees. However, if you sign up for Fulfillment by Amazon, you may be able to avoid some of those costs. With this service, Amazon stocks your product in its warehouse and handles all of the shipping and customer service for you.
As a resident of Canada, you are responsible for reporting any income you earn from Amazon to the CRA. For tax purposes, you are considered a small business and need to submit Form T2125 with your tax return. You must report Canadian earnings as well as money you earned from American buyers and should convert all transactions into Canadian dollars. If you register as a professional seller with Amazon or handle more than 50 transactions per year, you also have to submit Form W-8BEN to Amazon so it may pass the information to the Internal Revenue Service in the United States.