Being an importer is a popular small business venture worldwide, and is currently one of the highest growing business segments. Although the import/export industry does more than $1 trillion worth of business annually, it’s really more of a small business industry than a big business one. Large companies account for a relatively tiny percentage of total import/export sales, while the vast majority of importing is conducted by small businesses and independent operators.
If you’re thinking of starting an import merchant business in Canada, the primary knowledge base you’ll need to familiarize yourself with are the various governmental rules and regulations regarding imports, which are under the authority of the Canada Border Services Agency (CBSA).
The Appeal of Importing
Marketing imported goods can be both enjoyable and profitable for three main reasons. First, there may be a lack of availability of the goods in your home country. There are some goods that simply aren’t available except by being imported from another country. The second factor is that imported goods are often considered more fashionable or chic than their domestic counterparts — for example, Egyptian cotton or French perfume. The third factor that makes imported goods attractive is price. Some goods are significantly less expensive purchased abroad.
When you’re deciding on the type of goods you want to specialize in importing, you should consider what particular factors make the goods attractive to potential customers in your home country, so that you can devise an appropriate marketing plan.
Using a Customs Broker
Besides choosing what types of goods you wish to import and market in Canada, you also need to decide whether you will employ the services of a Licensed Customs Broker. Understand that whether you retain the services of a customs broker, you are still ultimately responsible for matters like proper documentation, payment of duties and taxes, and classification of goods in dealing with the CBSA. You may decide to handle things yourself and do business directly with the CBSA. Otherwise, you may determine that it’s worth the expense of paying a Licensed Customs Broker to handle things on your behalf to properly clear imported goods across the Canadian border. Licensed Customs Brokers typically handle customs-related tasks such as preparing or transmitting necessary documents, obtaining release for the goods, paying applicable duties, maintaining appropriate records, and responding to any concerns raised by the CBSA.
The Basics of Government Laws and Regulations Regarding Imports
There are a host of varying rules and regulations governing the importation of goods into Canada. Before making arrangements to import any specific goods, it’s imperative that you check any relevant laws, regulations, and applicable duties, tariffs, and taxes. Proper classification of the goods is important, since the classification determines tariffs that may be payable.
One key factor is that you must know not just the country where the goods are being shipped from, but the actual country of origin where the goods were produced or manufactured.
Finally, you need to keep accurate, detailed records of your imports, and retain them for a minimum of six years.