Expanding to Amazon Canada: FBA Business Guide

April 18, 2024
By The Badger

If you’re selling in the U.S. Amazon market and are trying to expand your business, the solution you seek might be up North — in Canada.

The Canadian Amazon market might not be as huge as the American market, but it’s growing fast and has the potential to grow your revenue by about 20% organically. In this blog post, Michael Facchin from Ad Badger and Blair Forrest from AMZ Prep break down everything you need to know to expand your Amazon business to the Canadian Market.

Everything This Article Covers

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Why Amazon Canada Is a Great Market for Sellers to Expand Into

If you want to increase your sales on Amazon, you typically have to turn up your advertising a notch, whether it’s Amazon PPC or off-channel — and this will cost you more. But did you know that expanding to international markets can achieve the same results without all the extra advertising costs?

Take expanding to the Canadian market, for example. You’re not expanding your product line or promoting your products in the competitive American market. You’re just offering your product catalog to more people in a low-competition market.

Going international with your Amazon advertising can help you boost sales without breaking the bank.

Requirements for Expanding into the Amazon Canada Market

If you’re considering expanding to the Canadian Amazon market, you’ll have to make a few adjustments. Let’s go over some essential info to make your journey smoother.

Here are the requirements you need to know before you join Amazon.ca:

North American Remote Fulfillment (NARF)

NARF is an Amazon program that bridges the fulfillment gap between the American Amazon marketplace and the Canadian and Mexico marketplaces. It allows you to store your products in Amazon fulfillment centers in the U.S. and ship to Canada or Mexico when you have orders from these marketplaces.

You need to turn NARF on in your dashboard, not to use it for shipping, but to get a gauge of the Canadian market. See, NARF isn’t the best way to ship products to your Canadian customers. It takes longer and costs more. But it’s the best way to test out the market without having to commit to building shipping channels to Canada upfront.

This approach ties in well with the strategies discussed in Amazon PPC videos, where understanding market dynamics before scaling operations is crucial.

$50K Monthly Sales Revenue

According to Blair, the best point to expand from Amazon.com to Amazon.ca is when you’re consistently making at least $50k a month in sales.

Expanding before reaching this level in the American marketplace means you’re expanding too early — basically biting more than you can chew. You want to ensure you’ve conquered your marketplace before expanding to new territories.

Non-Resident Importer Registration (NRI)

One of the common misconceptions about expanding to Canada is that you have to register a business entity in Canada. You don’t.

All you need is to register as a non-resident importer so you can ship into Canada without being a resident. It takes 3-5 days to register, especially when you’re in the U.S.

Brokerage Account

Shipping in Canada comes with a lot of paperwork. You need someone to help you make sure all your paperwork is in order. We’ll explore this in the next section.

Expanding to the Canadian Amazon market can be a smart move. Just remember to activate NARF, hit that $50k monthly sales mark, register as a non-resident importer, and get your brokerage account sorted. These steps will set you on the right path to explore the Canadian marketplace and unlock new growth opportunities.

Expanding into Amazon Canada: The Playbook

Now that you have your requirements ducks in a row let’s walk through the step-by-step playbook for expanding into Canada on Amazon.

How Do I Expand My Amazon FBA to Amazon Canada?

Step 1 : Register for NRI

I’ve mentioned that you need to register as a non-resident importer since it allows you to ship your products into Canada. Registering for an NRI is the first thing you need to do.

It’ll cost you about $100 USD to submit the NRI paperwork, and then the Canadian government will give you a tax code that will allow you to submit your taxes for Canad

Step 2 : Set Up Your Brokerage Account

As previously mentioned, a brokerage account helps ensure any paperwork is paid for and your products are approved to get in. For example, one of the key fees you’ll incur when shipping to Canada is the goods and services tax (GST).

So, if you’re shipping $100k worth of goods, Canada takes 5% of that as the GST.
Sure, that sounds like a hefty tax.

Still, in the Amazon Canadian market, you can increase your price point by about 20% without affecting the demand because it’s not as competitive as the American Amazon marketplace.This pricing flexibility can help offset the GST, making it a viable market for expansion.

Step 3 : Syndicate Your Amazon Listings

Syndicating your listing turns it into a global listing and creates a mirror image of your listing for whatever marketplace you want to expand to — in this case, Canada.

This saves you the trouble of creating new listings and starting over in the Amazon Canadian marketplace. Instead, you enter the Canadian marketplace with all the reviews and social proof you’ve gathered selling in the U.S. Amazon marketplace.

Step 4 : Add Your ASIN To The Canadian Marketplace

   1. Go to Seller Central.
   2. Click on the top where it says Amazon.com; from the drop-down, select Amazon.ca.
   3. Click add listing, and then add ASIN.
   4. Add an ASIN from your Amazon marketplace.

Ta-da! Now that ASIN will be live in Canada. Now you’re ready to go.

Step 5: Plan Your Best Shipping Method

Once the stage is set on Amazon.ca, you need to create a shipping plan on Seller Central.

There are two ways to ship into Canada: shipping to a Canadian FBA warehouse or direct shipping. Choosing the right shipping method depends on your specific circumstances and supplier location.

Shipping to a Canadian FBA warehouse: If you have a U.S. warehouse, you can ship your product from there to the Canadian warehouse. This is the easiest option to test out the market. Several shipping providers can handle this for you, whether it’s a parcel or a freight.

Direct shipping to Canada: If your supplier is in China and you’re in the U.S., you’ll have to pay a 25% tariff to ship the goods to the U.S. Instead of shipping from the supplier to a U.S. warehouse and then to Canada. You can ship directly from the supplier to Canada. This allows you to bypass the tariffs at the U.S. border and saves the time it’ll take to receive items in the U.S. and then ship them to Canada.

Whether you opt for shipping to a Canadian FBA warehouse or direct shipping to Canada, making the right choice can streamline your operations and potentially save you time and costs.

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What Common Challenges Should I Consider When Expanding To Amazon Canada?

Expanding to the Canadian market on Amazon isn’t complicated, but it does come with its set of challenges, including overstocking concerns and keyword strategy variations.

Let’s explore these potential challenges in detail.

Overstocking Concerns

Expanding to Canada makes you prone to overstocking, especially if your products are doing well in the U.S. market.

The assumption is that a well-performing product in the U.S. will also perform well in Canada, in which case you may send a lot of inventory to Canada in anticipation of the same demand as the U.S. market.

If the Canadians don’t receive your product well, however, you’ll end up with a lot of inventory that people don’t want to buy.

To overcome this challenge, we recommend doing a pilot run with 10% of your top products to see what performs well in Canada.

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Amazon Canada Keyword Strategy Variations

There are differences in some word spellings between U.S. English and Canadian English. These can make a huge difference in your Amazon keywords’ effectiveness if you’re using the same keyword optimization strategy as you use in the U.S.

For example, in the U.S., it’s gray. In Canada, it’s Grey. You need to optimize your Amazon Canada listings with Canada spellings.

Another thing is the use of foreign words as backend keywords. Sellers in the U.S. use Spanish keywords in the backend to capture the people who speak Spanish in America. Not many speak Spanish in Canada, so having Spanish keywords won’t be very helpful. You’re better off replacing the Spanish backend keywords with French keywords since there are a lot of French speakers in Canada.

Navigating these challenges will help you have a smoother transition into the Amazon Canadian marketplace.

Ready To Conquer The Great White North?

Although Canada is a relatively smaller market compared to the U.S., it’s still a treasure trove of growth opportunities for Amazon sellers seeking expansion.

If you’re thinking about expanding, then the best time is now, and this guide will be your road map to expanding into the Amazon Canadian market. So what are you waiting for, rally the troops, sound the horn, and conquer the Great White North!