Small businesses in Canada should consider expanding their online presence by selling on both Amazon.com and Amazon.ca, the Canadian version of the very popular Amazon e-commerce website. Selling on Amazon can set a business apart from its competitors, especially since 59% of businesses in Canada didn’t even have a website as of 2015. Small businesses looking to sell on Amazon can sell in Canada, the United States and Mexico using the North America Unified Account, or NAUA, membership option.
Advantages of Selling on Both
One of the biggest reasons why a business should list on Amazon.ca is the current lack of competition. As of 2014, there were 56 million products listed on Amazon.ca versus 253 million on the U.S. site. Getting exposure to both marketplaces allows a business to gain access to customers all across North America.
This lack of competition also allows the few that do list on Amazon.ca to have a higher price point. However, since Canada has fewer shipping options and is a much larger country than the United States, shipping costs tend to be higher. Business owners who list on Amazon.ca need to consider the final price the customer pays with shipping included to ensure it is not too high.
Another reason to sell on Amazon is that using the Fulfillment by Amazon option makes shipping easier. This gives business owners access to the Amazon Prime members who get free two-day shipping. Amazon helps business owners reduce customer service issues by streamlining returns. Whether businesses decide to sell on Amazon.com, Amazon.ca, or both, utilizing the services of FBA makes the whole process easier.
Setting Up an Amazon.ca and Amazon.com Account
There are two types of seller memberships for Amazon: professional plans and individual plans. As of November 2016, the professional plan costs $29.99 a month and is ideal for those who sell more than 20 items a month. For those with less volume, the individual plan charges $1.49 per item sold. There are various fees for self-fulfilling orders, especially for books, movies, videos, and DVDs sold by professionals and all products for individuals. Gift wrapping and gift messaging is only available to sellers with the professional membership.
To begin selling on either Amazon site, it is important to ensure the products comply with the individual country’s rules and regulations. Products sold in Canada may be restricted in the United States or Mexico and vice versa. Amazon sellers should research the prohibited content for Canada and restricted products in the United States.
Issues With Selling on Amazon.com
One of the biggest challenges faced by Canadian businesses selling on Amazon.com is the fluctuation of the U.S. dollar to the Canadian dollar. This can be advantageous or disadvantageous depending on the current market conditions. It also translates into appropriately pricing products to the U.S. dollar, which requires constant calculation and research.
Sellers accustomed to marketing to Canadians need to study the different trends of a foreign marketplace. What is popular in Canada might not necessarily be popular in the United States. For example, the top selling product category on Amazon.ca is electronics. In the United States, the most popular product category is toys and games. Selling on Amazon.com requires an understanding of the American market and how U.S. customers think.
When selling in the United States, the Internal Revenue Service requires non-U.S. taxpayers to provide a W-8BEN form to Amazon to be exempt from tax reporting requirements. This requirement is needed for all professional sellers and individual sellers who exceed 50 transactions in a calendar year.
Selling across any country’s borders may involve additional requirements for complying with U.S. customs laws and regulations. Some products might be susceptible to duties or tariffs when imported into the United States. They also might require licensing or a permit from U.S. agencies such as the U.S. Food and Drug Administration or the U.S. Department of Agriculture. Failing to comply with these agencies could lead to fines or other penalties that impede business for Canadian sellers.
Use NAUA to Manage Both Amazon Accounts
Instead of having a separate Amazon.com and Amazon.ca account, it is much easier to use the NAUA feature. Sellers can manage inventory and share listings across both accounts with relative ease. They need to link a bank account and can use the Amazon Currency Convertor for Sellers tool to help them convert the U.S. dollar to the Canadian dollar. This is an easy alternative for sellers who do not want to go through the hassle of converting the currency themselves. All the transaction fees are rolled into the exchange rate, which Amazon claims is very competitive to the rates offered in the marketplace.
To sell across the United States and Canada, sellers still need to create listings on both Amazon.com and Amazon.ca. Creating listings in the first marketplace where you register and begin selling does not automatically populate listings in the other marketplace.