Clearit.ca's Blog on Customs Brokerage and News Updates
More and more Canadian are flocking to online stores to buy the goods they desire. Canadians are massively looking towards merchants based outside of Canada because a majority believe that the prices are better and the variety of goods offered is much more interesting than what’s available back home. In 2015, 70% of purchases by Canadians were from merchants based outside the country.
The phenomena can be explain by the fact that a vast majority of Canadians have a disposable income that they’re inclined on spending abroad in order to get the goods they really want. Unfortunately the downside is that the shipping costs from the U.S. can be sometimes a lot higher than expected by customers who ultimately turn around to find what they want elsewhere.
Loyal Canadian Customers
Online retail sales in Canada reached $29.6 billion in 2015 and that number is expected to keep growing within the next few years. High brokerage or customs fees is one barrier that is holding back many Canadians from online shopping. Most shoppers consider themselves ‘occasional’ clients (purchasing up to 4 times a year online), and so high fees for shipping is easily a major turn off for them because they’re not too keen on the idea of spending more than double the cost of the item to have it shipped to Canada.
The good news about online Canadian shoppers is that once they’ve tried online purchasing, they easily convert into frequent buyers. Recent data has shown that 21% of first time buyers easily become frequent buyers after their first experience and that number is growing each day. So it’s not surprising that ecommerces based in the U.S. are working hard to provide cheaper delivery by streamlining the order and delivery processes to take advantage of the booming Canadian customer base.
Cheap and Fast Delivery
Getting your products to Canada in a cheaper more efficient way is possible. Traditionally, as a U.S. business you might consider using the United Stated Postal Service via delivery duties unpaid (DDU) service as a way to get your goods shipped out. With such a method, the taxes aren’t charged to the customer but they’ll need to pay additional fees upon delivery such as customs fees, brokerage fees, duties and sales taxes. Two more efficient ways to ship your goods are available: Direct Entry and In-Country Fulfillment.
Direct Entry or also known as DDP (deliveries duties paid) translates into the cost of shipping reflecting the destination country’s price including all applicable duties, customs charges and taxes. In-country fulfillment is when the goods are already located in Canada and the orders are processed directly from in-Canada.
Both these options allow you to charge your customer upfront with any additional costs making the online shopping experience a lot more enjoyable for your customers.
35% of online shoppers actually abandon their carts when comes time to finalize their purchases due to high shipping costs or worst, shipping costs that are not shown. For an ecommerce it’s crucial to be able to offer a clear portrait to clients wishing to import goods into Canada. By using DDP, your customers will know up front the full cost of their purchase, including fees, so to avoid any surprises upon delivery.
Mind at Ease with In-Country Fulfillment
Smaller businesses might be interested into looking for a partner in Canada capable of offering in-country fulfillment due to the simplification of the shipping process and the advantages that can be passed on to customers: no customs or duties fees to worry about and lower delivery rates. A good partner will also make returns and exchanges a lot easier as these elements are considered highly important to at least 69% of online Canadian shoppers. Businesses that fail to streamline their delivery process are most likely to see their northern customers migrate to competitors that are able to offer what they want at lower to no delivery costs.
Working with an in-country partner is truly the best option for eCommerce businesses looking to expand globally. Canadian customers will recognize the ease of ordering and even more the lower cost of delivery as you’ll be able to tell them upfront what to expect. Convenient shipping could be the determining factor between yourself and your competitor. Don’t let it be an obstacle.