Working from home and side hustles have gained not only popularity but increased value since 2020, making this the right time to start your online business. It would interest you to know that in 2021, Canada had over 27 million ecommerce users and the US $15.1 billion in retail ecommerce sales within the first five months of the year. As impressive as this may seem, the United States had an estimated US $1,648.6 billion retail sales during the third quarter of the year. This implies there is a ready and more significant market for ecommerce products in the United States for Canadian sellers.
Thanks to Canadian print on demand, ecommerce has never been easier to execute. With Printbest, you can easily monetize your creativity with low overhead costs using the best print on demand dropshipping in Canada. If you are wondering how best to do this, here’s a detailed look into your next big venture.
What a Canadian Dropshipper Needs to Be Aware of When Targeting the United States
What Is Print on Demand Dropshipping?
Popular in many countries including Canada, print on demand dropshipping is a process that involves working with a supplier of white-label products to customize those products and sell them under your brand and with your unique designs on a per-order basis. The supplier is responsible for fulfilling your orders and shipping them. In effect, you do not need product storage space or printing equipment. You can easily manage your business from the comfort of your home.
Print on demand services can help you:
- Monetize an audience you have built
- Create unique products
- Test a business idea
- Print small batches of merchandise
In Canada, print on demand services are available for a variety of merchandise, including water bottles, mugs, clothing, stationery, bags, backpacks, blankets, stickers, and magnets. Due to the diversity of products, you can be as creative as you like and design unique items for a massive online audience.
Why Should You Consider Print on Demand Dropshipping?
Print on demand dropshipping has many benefits, including:
- Easier business model to test due to the low overheads and no limitation on a minimal quantity of orders made.
- Low risk and low investment since you can easily test ideas and aren’t holding physical inventory
- Quick product development, allowing you to offer it for sale immediately as soon as you have the design.
- No worries concerning order fulfillment or shipping; you are only responsible for customer service.
- Easy to start up and fast scalability.
5 Tips for Canadian Print on Demand Sellers
Selling print on demand products to American customers from Canada is very achievable. However, there are laws that need to be followed and even additional fees in some instances. Here are some crucial factors you need to consider:
Currency Differences
When selling to the United States, you need to consider the different currencies. Did you know that Canadians pay between 10%-50% more than Americans for the same product in some cases? Due to the difference in exchange rates (and customs fees, covered below), businesses might sometimes end up absorbing losses. For this reason, it is important to account for exchange rates in the prices of goods. In addition, your price also needs to remain competitive compared to similar products in the US.
Also, a small but important point: If you are using the dollar sign to promote and discuss your products, ensure it is clearly marked as either CAD or USD.
Taxes
As a Canadian resident, you need to register your dropshipping business under one of the provincial tax regimes and identify yourself as a sole proprietorship, partnership, or corporation. Sole proprietorship is the easiest to set up as it doesn’t require a business license. Next, you will need to apply for a Business Number from the Canadian Revenue Agency. Once your business is up and running, you have to pay two main taxes; income and sales tax.
Income tax is based on how much you make and is subdivided into five brackets. In addition, you need to account for additional taxes known as territorial or provincial taxes based on where you live.
When setting a price for your merchandise, be sure to apply the sales tax. Canadian drop shipping businesses have a federal sales tax of 5%. In addition, you also need to include the provincial sales tax based on your residence, which ranges between 0% and 10%.
As a Canadian business owner, you might be wondering whether you file anything in the United States. There is no specific answer regarding such filing. The US tax system is very complex, especially when cross-border transactions are involved.
We can tell you that US filing obligations can arise when you have a permanent establishment in the US. Such an establishment can be a rented storage space or an office from which you pay employees. Having a permanent establishment is one of the key factors in determining the scope of any information filing activity.
So to ensure you’re not breaking any laws, it’s important to contact a tax expert.
Custom Fees and Regulations
The creation of the North American Free Trade Agreement (NAFTA) in the 1990s and the United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA in 2020, continues to encourage cross-border trade. Despite the many similarities between Canada and the US, each country has its unique set of shipping rules and regulations. United States Customs and Border Protection Service (CBP) helps move goods at the Canadian border. There are three kinds of custom entry declarations.
- Section 321 entry: Goods valued at $800 and less are duty-free
- Formal entry: Shipments valued over $2,500. These require further documents than the informal entry shipments.
- Informal entry: Goods valued over $800 but less than $2,500 may require a commercial invoice and a USMCA certificate.
All formal shipments entering the US from Canada are required to have the following:
- Commercial invoice: A description of the shipped goods and their estimated value. There should be two copies, one attached to the bill of lading and the other with the shipped product.
- Bill of Lading: This is provided by your freight company and is needed at the time of pick-up
- Importer ID number: This is your social security number or IRS business registration number
- Electronic export information form (EEI): If the products for shipping are valued at over $2,500, then the United States Census Bureau requires an EEI form to compile control experts and trade information.
- An import/export license: If your product is regulated, you may require a special import/export license.
- USMCA certificate of origin: This certificate is used by all countries under USMCA. It certifies that a shipment qualifies for preferential tariff treatment and is completed by the exporter.
Shipping Times
In ecommerce, when selling to the US from Canada, you need to account for shipping times so your products can reach your clients in the time indicated. Often, the customer needs to know the shipping times before ordering. Displaying the correct shipping dates helps your business get good reviews that further boost your sales and draw in more clients.
Standard mail deliveries to the US, such as the Canada Post, usually take about four to six business days. FedEx takes about two to seven days to deliver parcels to the US. There are also faster services that take less time but cost more. Printbest ships goods with UPS and FedEx, which take between one to five days.
Language Differences
Both Americans and Canadians use English as their national language. However, there are still differences that need to be considered. Your product descriptions should be easy for American and other international customers to understand. If anything might accidentally sound offensive, avoid using it. Language differences also need to be considered when you’re marketing your business. This will help target the right clientele.
Design, Sell, Test, and Grow with Printbest
Print on demand dropshipping is a great place for new entrepreneurs and anyone who would like to test their ideas before investing in them. The tips discussed above need to be considered when setting up your ecommerce store using print on demand dropshipping in Canada. When getting started, you have nothing much to worry about. However, when you start making sales, it is important to consult an expert to help you minimize your costs and maximize your cross-border transactions. You also need to work with a print in demand partner like Printbest, who has experience selling to the United States.
Printbest offers the best print on demand in Canada. We work hard to monetize your designs and ideas into profitable products. Also, as the leading print on demand service in Canada, we provide fast fulfillment time to print and pack your orders, the lowest industry prices, high-quality products, and a large selection of products for your online store. Check out Printbest’s catalogue for products you can sell in Canada and the United States.
