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Selling my product on Amazon.com from Canada

Young Money

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Hey guys, I'm pretty new around here so let me start off by introducing myself, my name is Austin and I live in Alberta, Canada. I have come up with a product idea I'd like to develop and am in the process of ironing out the gritty details so I can approach a Chinese supplier in the near future.

I was wondering if there are many fastlaners on here that are from Canada and what your experience has been selling on Amazon.com? I have been reading like crazy on fastlane forum these past few weeks and have learned so much valuable information about FBA and ecommerce in general (much thanks to @biophase) but I am wondering if any Canadian's out there could give a brief overview of how they went about selling in the US.

Did you apply for U.S business license? Obtain a U.S bank account/credit card? (I have heard using a Canadian card results in massive foreign exchange fees). Any other things Canadians should be aware of before diving in?

Any help is greatly appreciated!
 

Ankerstein17

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Hey, Austin.

If you are still looking for some information... I would look around on YouTube. There are some big Canadian Amazon Sellers like Charles Marois. They should be able to provide some detailed information regarding this stuff

-Hope this helps
 

ilia

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Hey @Ankerstein17
I had the same question as @Young Money, just a couple of months later.
Couldn't find too much information using the forum search, so just wanted to say 'thanks' for the useful info!
Cheers mate!
 

ilia

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Absolutely man, keep in chat with me.
If you have any other questions, maybe I can help you
Hey mate,
@Ankerstein17 ,
I have contacted my first supplier,
When it came to shipping they said they only offer FOB. On one of Charles Marois videos (that you recommended, THANKS!), he mentions that you should order DDP where the supplier takes care of logistics. If my supplier only has FOB and I want them to ship to Amazon, what do I need to know/do?
Hoping for some insight,
Cheers!
 

inputchip

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As mentioned above, Charles does have a lot of content for beginners selling in the US on Amazon. You should watch them all.

Did you apply for U.S business license? Obtain a U.S bank account/credit card? (I have heard using a Canadian card results in massive foreign exchange fees). Any other things Canadians should be aware of before diving in?
Do not open a US LLC, that is a big mistake (tax purposes). Any Canadian corporation or sole proprietor can do business anywhere in the world.

I recommend opening a sole proprietorship in your trade name to start. This will be about $60 CAD. If you start selling a decent amount $10k+ a year, then you should open a corporation as you will pay less tax.

If you don't want to get screwed over on FX fees, you need to open two new bank accounts.

1. US based bank account with US routing number (you will receive payment from Amazon US here).
2. Canada/US cross border banking account in US dollars. You will transfer from #1 into this account to bring it into Canada and into your main accounts. You can get a US dollar credit card on this account to pay for business expenses as well.

You can open these accounts as personal accounts to start, but you really should open business accounts as you are not supposed to use personal accounts for commercial purposes.

You can open the AZ seller account on .ca or .com as it gives access to both markets, but .ca is a cheaper monthly fee.
 

JAJT

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Do not open a US LLC, that is a big mistake (tax purposes).
To be clearer here, "big mistake" means paying the highest tax rate possible on your first dollar.
(Ask me how I know...)

I am wondering if any Canadian's out there could give a brief overview of how they went about selling in the US.
I've done this / do this. It's not hard.

Amazon's accounts are "unified" now. Meaning your one account gives you access to canada, the usa, and mexico. When you're ready to ship to those countries, they'll give you the address to send to for their FBA warehouses. The "hard part" is getting your product from the manufacturer to Amazon's address if it isn't going to you first. Basically you'll need a shipping solution to let you pay all import duties and taxes before it gets to Amazon.

You also need to follow all of Amazon's label requirements, which is an entire topic in itself since you can have Amazon do this (for a fee), you can have your manufacturer do this, you can avoid it entirely under certain circumstances, etc...

Also - don't forget the cost of storage fees at Amazon's warehouses. I recently made the mistake of ignoring this and it was costly. They charge you monthly to store goods at their warehouses. US-located folks have a really great solution around this (store excess at their house, or a storage unit, and trickle inventory into Amazon as needed) but Canadian folks don't have physical access like this, so you'll either need a third party logistics company (which will charge you to hold/ship as well) or just factor those storage costs into your margins. You'll probably want to balance ordering as much as possible to get a price break from your manufacturer but as little as possible to avoid excess fees with Amazon. It's a hurdle Canadians have to deal with that Americans largely don't in the beginning.

Anyway - if you have questions, just tag me.
 

Walter Hay

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Hey mate,
@Ankerstein17 ,
I have contacted my first supplier,
When it came to shipping they said they only offer FOB. On one of Charles Marois videos (that you recommended, THANKS!), he mentions that you should order DDP where the supplier takes care of logistics. If my supplier only has FOB and I want them to ship to Amazon, what do I need to know/do?
Hoping for some insight,
Cheers!
There is nothing wrong with ordering FOB provided you know what to do about shipping the goods. FOB is almost universally quoted by suppliers in China. I am assuming that is where you are sourcing.

DDP is the way to go, but that INCOTERM scares a lot of Chinese suppliers unless they are experienced in exporting, so I advise against using the term DDP.

You can easily achieve the benefit of DDP without calling it that when a supplier quotes FOB. All you need do is to ask them to quote you a price delivered to your address. The supplier will usually get a discounted rate and they prepay the freight. If it is a small shipment that will usually be done via air couriers. They handle pick up from the supplier, export requirements through Chinese or HK Customs, import Customs clearance, including payment of duty and tax if applicable.

You should investigate the advantages of shipping to a fulfillment center in the USA if the order is worth no more than the de minimus rate of $800 including freight and insurance. The fulfillment charges could be less than the duty and tax incurred in shipping first to Canada.

Canada's stingy de minimis threshold of CAD20 means you will pay a lot of duty and tax on such shipments if they go to Canada, but would usually be duty free if handled by an air courier when shipped to the US.

Walter
 

Longinus

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Hey mate,
@Ankerstein17 ,
I have contacted my first supplier,
When it came to shipping they said they only offer FOB. On one of Charles Marois videos (that you recommended, THANKS!), he mentions that you should order DDP where the supplier takes care of logistics. If my supplier only has FOB and I want them to ship to Amazon, what do I need to know/do?
Hoping for some insight,
Cheers!
My forwarder collects FOB in China and ships this straight to Amazon warehouse in the US. I live in Europe and can sleep on both ears when she takes care of my shipment. Basically she ships DDU to Amazon warehouse.

If you want her contact, PM me. I gave her information to many fastlaners here.
 

Walter Hay

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My forwarder collects FOB in China and ships this straight to Amazon warehouse in the US. I live in Europe and can sleep on both ears when she takes care of my shipment. Basically she ships DDU to Amazon warehouse.

If you want her contact, PM me. I gave her information to many fastlaners here.
I am surprised to read that. Amazon's policy is that they won't accept shipments on which duty and tax is still payable.

Are you sure you don't mean DDP?

Walter
 

Longinus

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I am surprised to read that. Amazon's policy is that they won't accept shipments on which duty and tax is still payable.

Are you sure you don't mean DDP?

Walter
When I ask which incoterm she ships it, she says it's DDU, officially. But customs are paid by me, before it arrives in Amazon.
 

ilia

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@Walter Hay
Thank you for the detailed response, amigo.

I have another question, for you and the community at large (this one may be more difficult to answer).

I currently live in Canada. I want to start a business importing a womens jewelry product line from china, and selling it through shopify.

However, I want to sell my products to customers in the USA, not Canada (US= much larger market). so the best method of doing that is by getting my product shipped from china directly to an amazon warehouse in the states and getting it fulfilled from there.

I have located a supplier in china, but they only ship jewelry pieces in clear plastic bags - they don't deal with packaging or branding aspect of the business. Obviously this is a problem because jewelery is a lot about presentation, and nobody will buy again if their expensive pendant comes in a cheap plastic baggie.
So I would need a way for those pendants to be packaged in luxury jewelry boxes (which I can also source from china), but the supplier is not willing to do that for me as i am a brand new customer and have only ordered a sample and my first order after will only be about $5k worth.

The only solution I could come up with is to ship the order to myself in canada, put it together, prep it, and re-ship it to a FBA center in the states. I am just worries about customs fees and shipping fees eating up a large portion of my margin.

Can you offer any input?

Hoping to hear from you soon,

ilia
 

Walter Hay

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@ilia, I think I can ease your mind. I will deal with each issue separately:

Customs duty. Because of Canada's ridiculously low deminimis rate you will have to pay duty on the shipments direct to you in Canada, but you can legally avoid paying duty when shipping from Canada to the USA. I think you have my importing book, so see 3.3 regarding splitting shipments. See below also regarding freight to FBA.

Freight Canada to Amazon FBA USA. Contact Chit Chats and check out their service delivering to US locations including FBA. You will need to deliver to a Chit Chats location and provide a shipping docket plus an invoice for the value of the goods. They will clear US Customs and pass on to you the Amazon FBA discounted rate when they transfer your package to UPS.

They will suggest that you only send one package at a time to keep under the US deminimus rate of $800. This will probably not be a problem for you because you won't have to pay Amazon storage fees on the whole of your inventory, and will be able to ship another parcel whenever stocks in FBA are getting low.

Luxury Packaging. You can obtain deluxe packaging in Canada at modest prices, probably no more than FOB China + freight, and in the latest revision of my labeling book I have included links to Canadian suppliers. At least one of them will print your logo on small MOQ orders. The problem with buying pre-packed items in China is: a) Freight costs can be substantially increased because the volumetric weight rate for freight could be charged. b) Packaging is very prone to damage in transit. Your biggest problem will then be finding low cost labor to put the items in that luxury packaging.

Walter

P.S. Publication of my revised labeling book will be about 2 weeks from now.
 
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ilia

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@Walter Hay

Thank you so much for the effort you put into your responses.
I haven't been active here for a while but I am ready now more than ever to pursue my dreams, and I was hoping we could pick up where we left off.
First of all, I have just purchased both of your books and I am hungry to devour them both.
In the meanwhile, as I comb through your books, I would like to request your opinion.

What do you think would be the BEST way to start my business?
I have saved up around $20k CAD that I intend to use to purchase my first bulk order from China. I have purchased samples previously and I trust the manufacturer.

I would like to outline my plan of action to you below, and I seek your advice wherever you believe correction or input are required:

1. I will purchase the $20k order (jewelry and packaging) and have it shipped to my apartment in Toronto, Canada. I presume the way I will be paying for this is directly through my banking institution (CIBC) by doing some sort of bank transfer (I have to go to the bank to confirm how this process works).

2. I will package all the pieces individually by myself as I don't have the resources to hire anyone to assist with this in the beginning, and I don't mind doing a bit of the legwork.
3. I will initiate my marketing strategy which will focus primarily on social media marketing. I believe that because Chit-chats offers good rates on Canada and US shipping that I should be targeting both markets. For the first few months while I develop my marketing strategy I will be able to visit a chit-chats location daily to drop off individual packages and have them shipped direct to the customer.
4. When I am unable to keep up with the volume of packages I intend to switch over to FBA or the like, but that is a topic best saved for later, when I reach that level. The reason I have opted to not start with FBA is that it adds an extra layer of complications and costs, and is perhaps not necessary for someone starting out.

I would appreciate any advice or input on my battle plan!

I also have a couple of questions about the process of starting my business and putting through that first bulk order:

1. What fees/brokers/customs issues can I expect to come across on my first bulk shipment?
Would you recommend that I register a sole proprietorship? If so, what would be the advantage? Do I even need a legal structure or am I OK just doing everything under my personal name while starting out?

2. Would you recommend that I open a cross-border banking account? If so, what would be the advantage instead of just depositing US funds directly to my Canadian bank account?

I know there's a lot to answer here, but I would be deeply grateful if you were to further help me in my wealth journey. I am eager to hear any and all advice you have for someone just starting out like myself.

Thank you very much for taking the time to read this.
Sincerely,
-Ilia.
 

Young Money

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@Walter Hay

2. Would you recommend that I open a cross-border banking account? If so, what would be the advantage instead of just depositing US funds directly to my Canadian bank account?

-Ilia.
Definitely open a cross border US bank account. Its very simple to do (I used RBC) and it only costs $10/mnth. You will save lots of money down the road in currency transaction fees if you are selling in the US. RBC offers a better rates too for converting between USD and CAD
 

Walter Hay

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@ilia. I will be offline for two or three hours and will respond when I am back.

Walter
 

Walter Hay

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I have copied your post and added my answers in bold.

Thank you so much for the effort you put into your responses.
I haven't been active here for a while but I am ready now more than ever to pursue my dreams, and I was hoping we could pick up where we left off.
First of all, I have just purchased both of your books and I am hungry to devour them both.
In the meanwhile, as I comb through your books, I would like to request your opinion.

What do you think would be the BEST way to start my business? I hope you have tested the market using the samples you have purchased, and packaged them in the jewelry boxes from one of the suppliers I linked in my labeling book.
I have saved up around $20k CAD that I intend to use to purchase my first bulk order from China. I have purchased samples previously and I trust the manufacturer. That is a lot to outlay unless the market test has given very positive results.

I would like to outline my plan of action to you below, and I seek your advice wherever you believe correction or input are required:

1. I will purchase the $20k order (jewelry and packaging) and have it shipped to my apartment in Toronto, Canada. I presume the way I will be paying for this is directly through my banking institution (CIBC) by doing some sort of bank transfer (I have to go to the bank to confirm how this process works). Yes, but there is a way to safeguard your money, and that is to use either Letter of Credit (L/C) or Escrow. L/C is more expensive, and your bank might not do an L/C for what they would regard as a small amount. For escrow I recommend escrow.com. See my book Ch.14.1

2. I will package all the pieces individually by myself as I don't have the resources to hire anyone to assist with this in the beginning, and I don't mind doing a bit of the legwork. Good
3. I will initiate my marketing strategy which will focus primarily on social media marketing. I believe that because Chit-chats offers good rates on Canada and US shipping that I should be targeting both markets.Yes For the first few months while I develop my marketing strategy I will be able to visit a chit-chats location daily to drop off individual packages and have them shipped direct to the customer.
4. When I am unable to keep up with the volume of packages I intend to switch over to FBA or the like, but that is a topic best saved for later, when I reach that level. The reason I have opted to not start with FBA is that it adds an extra layer of complications and costs, and is perhaps not necessary for someone starting out. Doing your own fulfillment is good if you can capture the market without Amazon.

Make sure that a significant part of your labeling or more likely, packaging, incorporates your URL so that if you switch to FBA your customers can easily find your own site.


I would appreciate any advice or input on my battle plan!

I also have a couple of questions about the process of starting my business and putting through that first bulk order:

1. What fees/brokers/customs issues can I expect to come across on my first bulk shipment? You will pay duty and VAT, but ask the advice of a freight forwarder and get them to quote for the shipment door to door.
Would you recommend that I register a sole proprietorship? If so, what would be the advantage? Do I even need a legal structure or am I OK just doing everything under my personal name while starting out? You can import as a sole trader, but I would prefer to start off with the business entity that will be used for accounting and tax purposes.

2. Would you recommend that I open a cross-border banking account? If so, what would be the advantage instead of just depositing US funds directly to my Canadian bank account? Either way, when you want to spend your hard earned money from the US you will have to take into account exchange rates and transfer fees. @Young Money has given a helpful answer on that.

I know there's a lot to answer here, but I would be deeply grateful if you were to further help me in my wealth journey. I am eager to hear any and all advice you have for someone just starting out like myself.

Thank you very much for taking the time to read this.
Sincerely,
-Ilia.

Don't hesitate to post again if you need more help, or PM if it is confidential.
Walter
 
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