How to sell on Amazon Canada
The Canadian market is one of the most important in America in terms of e-commerce, as confirmed by the country’s official e-commerce statistics. According to Statistics Canada, for example, there are over 27 million e-commerce users in the country, which is approximately 75% of the entire population. Furthermore, this number is slowly but steadily growing and is forecasted to increase to 77.6% for the next year.
Clearly, the increase in the number of online buyers also means that retail sales in Canada will continue to grow, and they will do so even more than the peak reached during the pandemic, with local lockdowns driving online sales volume to a historic high of $3.82 billion in December 2020 alone. According to Statistics Canada forecasts, e-commerce turnover in the country is expected to reach at least $40 billion by 2025.
Amazon Canada: 16 million monthly visitors
In this context, a leading role is clearly played by Amazon. While it is true that Canadian consumers are increasingly turning to the internet to place orders, it is also true that they are increasingly doing so on this marketplace.
So, below, we have summarized a list of actions for those who are already European Amazon sellers and are interested in expanding their activities in Canada, or for vendors who have no experience in e-commerce sales but do not rule out starting from an interesting market like this.
After all, Amazon Canada is a marketplace that boasts approximately 16 million monthly visitors and a growth rate that places it among the most dynamic in the world. In other words, a business that you should not underestimate and which new sellers (or sellers already established in other countries) would do well to pay attention to.
Open an account
The first step, naturally, is to create a dedicated account. We won’t dwell on this aspect here because we’ve often dealt with it before. However, just be informed that if you have a Seller Central account for the US and Mexico, then you’ll be able to skip this step thanks to your unified North American account.
Take note of tax management
Taxes on sales in Canada are one of the elements that most impact profit margins.
Specifically, there are three different types of sales taxes in the country. Their application depends on the geographical area of reference:
- Federal (GST)
- Provincial (PST)
- Harmonized (HST).
Some areas only apply the GST at 5%, such as:
- Alberta
- Nunavut
- Yukon
- the Northwest Territories.
In other cases, both GST and PST are applied at different rates:
- 7% in British Columbia and Manitoba
- 6% in Saskatchewan
- 9.975% in Quebec.
In other situations, only the HST is applied at the following rates:
- 13% (Ontario)
- 15% (New Brunswick, Newfoundland and Labrador, Nova Scotia)
- 19% in Prince Edward Island.
Furthermore, note that on September 21, 2017, Canada and the EU already abolished 98% of their tariffs and agreed to gradually eliminate almost all remaining tariffs. It is expected that by 2024, 99% of all tariffs will be abolished.
For more information, we also recommend consulting our guide on how to avoid tax errors on Amazon.
Choose a shipping model
As you may already know, you can opt for a Fulfillment by Amazon (FBA) model or Fulfillment by Merchant (FBM) to ship your products. In the first case, products are shipped by the supplier to Amazon, and then Amazon takes care of storing and shipping the products to the end customer using its supply network. With FBM, on the other hand, it is up to the seller to arrange all of this, choosing a trusted third-party logistics provider.
In the case of sales on Amazon Canada, it may be useful to consider remote fulfillment that allows you to fulfill orders on the marketplace more comfortably.
Create product pages
At this point, you will need to enter your products on the marketplace by creating the corresponding listings. If the product is already present on Amazon.ca, you can use the semi-automatic compilation process provided by the portal.
Consider enrolling in the Brand Registry
Finally, consider whether it is useful or not to enroll in the Brand Registry. This service will give you access to more advanced selling tools and help you protect your brand against counterfeits. Registration is free as long as you have a brand for your project, even if it is not specifically registered in Canada.
Bestselling products on Amazon Canada
The variety of products available for online purchase in Canada is constantly growing. In fact, this feature is one of the factors driving e-commerce growth.
Specifically, according to the latest data from Statista updated at the end of 2023, among Canadian consumers, the two most popular categories for online shopping are:
- Clothing
- Shoes
These two categories obtained 43% and 25% of the responses respectively in the company’s online survey on the most popular product categories.
Other categories with top purchases also include:
- Books, movies, music, and games (22%)
- Cosmetics and beauty products (21%)
- Bags and accessories (20%).
As for the distribution of sales, the majority of sales are concentrated around the main holidays of the calendar. Although common to other markets, here’s a list of them:
- Valentine’s Day – February 14th
- Easter – March/April
- Mother’s Day – May
- Father’s Day – June
- Back to School – August/September
- Halloween – October 31st
- Christmas – December 25th
- Boxing Day – December 26th.
As in other countries, Canada also experiences a significant increase in sales during the fourth quarter holidays. Particularly noteworthy is the contribution of Cyber Week, the shopping period that begins with Thanksgiving Day in the United States and also includes Black Friday and Cyber Monday.
Preferences of Canadian Consumers
Canadian consumers have very specific preferences that seem to solidify year after year. First and foremost, compared to other countries, consumers in this nation have a clear inclination towards supporting local businesses both online and offline (68%), thus favoring the purchase from local economic operators. This aspect should be taken seriously when considering exporting to Canada.
Of course, this does not mean that there is no room for international sellers (quite the opposite). Although Canadians prefer to support online business activities in the North American country, an increasingly significant portion of the country’s e-commerce spending is allocated to non-Canadian sellers. The Europeans stand out among them, right after the Americans.
Another behavior that has long been entrenched in Canada is the recourse to increasing product and service customization. In fact, one out of five Canadian customers is willing to spend up to 20% more on a product if it can be customized. In this case, the role of the seller is crucial. Over forty percent of Canadians prefer customization to be somehow inspired and guided by the seller themselves.
E-commerce, increasingly mobile
Finally, among other preferences, we can notice a growing predominance of online retail purchases through mobile devices. Six out of ten Canadians make online purchases on their smartphones, with a constantly growing trend, especially among younger people.
Furthermore, a straightforward way to study the e-commerce market in Canada is to integrate it with the US market. The two marketplaces and reference communities share numerous common characteristics. Among the most interesting are hybrid purchases, for example. Consumers are increasingly omni-channel and do not hesitate to buy products online on Amazon and pick them up at physical stores or other facilities organized by Amazon in the country.
Lastly, it’s worth noting that the preferred payment method for Canadian online shoppers remains credit cards. Transactional methods with cards represent 59% of the market. However, in second place, we find digital wallets, which will increase to 27% by 2025. Here, the leader is PayPal, which already holds a 20% market share of payments made in the country.
Of course, for more information on the preferences of your current customers, we recommend using our suite of analytical tools. Our software will allow you to better understand:
- their behavior,
- their purchasing habits,
- recurring purchases,
- the lifetime value that will help you better target your marketing campaigns.
Why sell on Amazon Canada: 5 reasons you need to know
Now that you have more information about selling on Amazon Canada and the characteristics of this country, it may be useful to share some of the reasons why it could be convenient to do so.
We’ve identified 5 reasons: let’s look at them together, one by one.
Increasing sales and turnover
We’ve already partially discussed the first reason in statistical terms. Amazon Canada boasts approximately 16 million unique visitors a month. It’s one of the fastest-growing e-commerce markets on the planet. This is a very high number of potential customers to reach, which means a potential increase in sales that should not be underestimated.
Remember that in most cases, it’s easier to increase sales by expanding into a new market than trying to regain market share from existing competition. A rule that’s always valid, especially in a competitive niche!
Facing less competition
It’s also important to remember that the level of competition you’ll face on Amazon Canada is lower than in other markets.
In practical terms, this means you might have an easier entry into the market. This way, you could also try to position yourself better against more competitive products and brands.
Diversifying income
Diversification is crucial for all Amazon sellers who want to make their business more sustainable.
If you rely on a single market or product, you’re always exposed to the risk of losing income and margins due to:
- ranking updates,
- entry of new competitors,
- negative reviews,
- disruptions in the supply chain,
- and much more.
Therefore, the only way to sleep soundly as an Amazon seller is to diversify and make sure… not to put all your eggs in one basket. Launching new products or brands is one way to do this. However, launching the same products in new markets can also bring you huge satisfaction!
Expanding brand reach
Expanding to new countries can increase the reach and overall visibility of your brand. It will give you the opportunity to be recognized internationally, in a variety of different markets.
This type of global brand recognition builds over time. You can be sure it will make it increasingly harder for others to compete with you!
Taking advantage of a low barrier to entry
Finally, remember that if you’re already selling in another market, the barrier to entry is often lower when you’re launching products in a new market.
Think about it for a moment. If you’re already present in one market and expand to a new one, it means you’ve already done most of the hardest work, such as:
- devising products,
- validating ideas,
- researching products,
- verifying the suitability of the product for the market.
In summary, there’s no reason why you can’t replicate what you’re already doing and succeed…
Try the Profit Tool for free
Take full control of your Amazon Business. You will see with clarity real profits, margins, ROI, orders, costs and have a balance for each European marketplace. If you are not yet familiar with ZonWizard's Profit Tool, find out how it can help you manage and grow your business.
