Best Practices for Online Merchants Who Want to Sell to Canadians

By: David Cameron

The very fact that you are reading this page probably means that you are a non-Canadian online merchant and that you are interested in finding out a little more about what you can do to get more sales from your Canadian traffic. Due to the sheer magnitude of online merchants hailing from the United States, this page is pretty focussed on what American merchants can do to get more out of the Canadian market place. This doesn't mean that merchants from countries other than the USA will not find the information useful so everyone please read on!

With the recent decline in the American economy, American online merchants have been looking for new and different revenue streams to tap into. The smart ones are looking North. Canada in already Americas largest trading partner and we share many similarities. We consume the same television, radio and music. Our two countries also share media, language and geographical location. In fact, shipping to some places in Canada is closer to the merchant than delivering to some places in the USA! With a market of over thirty-million people on your doorstep, it is worth a look.

Unfortunately there are some basic reasons why the Canadian online shopping market has under performed when compared with the same market in the US. The following points summarize some of these problems and how you as a non-Canadian merchant can overcome them.

1) Shipping, Taxes, Duty and Brokerage fees

Shipping and shipping fees are the single most important hurdle for Canadian online shoppers today. For most Canadians - when they shop online, they head directly to the merchant's Shipping page to find out: a) does the merchant ship to Canada AND b) What will it cost to ship to Canada. Shipping fees, taxes, duty and brokerage fees can be staggering! Depending on how the order is shipped, the Brokerage fees can be twice the price of the actual item! No wonder Canadians avoid shopping online. The many urban legends about the fees have made many fearful of the hidden costs involved with buying online... We have created a shopping tips page to try and demystify some of the fees but there is plenty we can all do:

  • Use the United States Postal Service (USPS) to ship to Canada - they have the best rates and least expensive customs broker fees. They have a relationship with Canada Post. Canadians feel comfortable dealing with their national post office.
  • Avoid UPS and FedEx - they have the MOST expensive customs broker fees
  • If you must use a courier for shipping - use the air freight option - it will be expensive but it has the brokerage fee built-in (at a much better rate)
  • Have a clear statement for Canadians on shipping pages telling them if and how you ship to Canada.
  • Do your homework and provide as much info about shipping fees as possible (a flat rate shipping fee is always appreciated)
  • Offer free shipping for Canadians - this is an accepted method of upselling and increasing conversions - why not offer it to Canadians? If you aren't willing to eat the $9.95 to ship a iPhone to Vancouver, then why should a customer be willing to buy it AND pay a whopping huge brokerage fee. Meet Canadians halfway and you will win every time!
Duty and Taxes
  • Under NAFTA, if a product is not manufactured in the the United States, Canada or Mexico then the purchaser must pay the import duty. This is an additional import tax. It would be very useful if you added this fact to your shipping page and keep track of what items are manufactured where.
  • Local Canadian warehousing - some merchants who are truly serious about serving Canadian online shoppers have opened Canadian warehouses to reduce the cross-border shipping fees to their customers. If you are not doing this, this is a great idea for you to consider.
  • Canada Post operates a program called Borderfree. This will allow you to show Canadian customers, at the checkout, exactly what all shipping fees will amount to.
  • America has established online free trade with some countries other than Canada. If we all push our Government leaders, we can hopefully establish online free trade with Canada too. Write you member of Parliament or Congressman today!

2) Canadian Landing pages

One simple way to convert Canadian traffic is to setup a geo-targeted Canadian specific landing page. These pages go a long way in making Canadian shoppers feel more comfortable and ready to buy. Canadian specific landing pages are a great upfront opportunity for you to provide shipping information and content unique to your Canadian visitors.

3) Canadian Creatives

A simple image of Maple leaf is usually enough to tell Canadian shoppers at a glance that your merchant site is Canadian friendly. If you operate an affiliate program you should provide your Canadian affiliates with Canadian specific links and creatives. Better yet, these creatives could land on that new Canadian specific landing page!

4) Canadian Discounts, Coupons and promotion codes

Why not create a campaign and offer a coupon or promotion code just for Canadians. As mentioned previously, a free shipping coupon only pays a part of what a Canadian customer will ultimately have to pay for that purchase.

5) Dollar Parity

For some time now, the Canadian dollar has fluttered around the same value as the American dollar. At times it has even been more valuable than the American dollar yet we still see price tags that read $1 in the USA and $1.15 in Canada. If your prices don't represent the reality in the value of the Canadian dollar then forget about selling to a Canadian.

6) Respect Canada's Cultural differences

Cultural stereotypes like Canadians always saying "Eh!" or "aboot" and drinking beer is simply ignorant. These things will drive Canadian customers away to your competition faster then you can imagine. Show Canadians the respect that you would any potential customer and you will see great results.

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