As tariffs and US-Canada border shipping challenges grow, US-based e-Commerce stores selling in Canada face rising costs and delivery delays. For many, this means lost revenue, unhappy customers, and shrinking profit margins. But there’s good news: shifting fulfillment services to a Canadian logistics provider can be a game-changing solution.
In this blog, we’ll explore how recent tariff changes impact US-based e-Commerce businesses and how moving fulfillment operations to Canada can save costs, improve customer experience, and drive growth.
Understanding the Tariff Situation Between the US and Canada
Recent trade updates between the US and Canada have introduced higher tariffs on goods exchanged across the US-Canada border. These tariffs stem from ongoing adjustments under agreements such as the Canada-United States-Mexico Agreement (CUSMA) and targeted retaliatory tariffs.
Key Areas Affected:
- Consumer Goods: Items like furniture, electronics, and clothing are facing higher duties, with some rates reaching up to 20%.
- Raw Materials: Industrial inputs such as steel and aluminum have been hit by tariffs ranging from 10% to 25%, affecting businesses that rely on materials sourced from the US for Canadian production.
- Agricultural Products: Products such as dairy, meat, and processed foods are seeing rising tariffs, making it costly for US exporters to sell directly to Canadian consumers.
Impact on E-Commerce Businesses:
The current structure means that many US-based e-Commerce businesses exporting to Canada are subject to paying duties on every individual shipment, raising the overall cost of doing business. According to Canadian customs guidelines, duties are calculated based on the item’s value, classification, and origin.
To get the most accurate and up-to-date tariff information, you can reference the Canada Border Services Agency (CBSA) website or consult with a customs broker.
5 Ways Switching to a Canadian Fulfillment Center Can Save You Money
1. Avoid or Minimize Tariffs with Bulk Shipping
When you ship individual orders across the US-Canada border, you’re paying tariffs and duties on every shipment. However, by bulk-shipping inventory to a Canadian fulfillment center and clearing customs only once, you can reduce your overall tariff and customs expenses.
Example:
- Instead of shipping 500 individual orders per month (each facing a tariff of $10-$15), you could send a single bulk shipment to Canada, reducing the customs cost significantly.
This strategy can save thousands of dollars annually, particularly for high-volume sellers.
2. Lower Shipping Costs Within Canada
Shipping across the US-Canada border from the US to individual Canadian customers is expensive. On average, shipping a small parcel from the US to Canada can cost $20 or more per package.
By storing your products in Canada, you can take advantage of domestic Canadian shipping rates, which are often 30-50% cheaper than international shipping.
Before Switching:
- Cross-border shipping cost per order: $20
- Average tariff per order: $10
After Switching:
- Domestic shipping within Canada: $10 per order
- Customs handled once via bulk shipping
These savings quickly add up and give you room to reinvest in growth.
3. Faster Delivery and Happier Customers
When orders ship across the US-Canada border, they often face customs inspections that can cause delays of several days or more. This affects customer satisfaction, especially if competitors offer faster delivery options.
With a Canadian fulfillment center, you can ship orders domestically within 1-3 days, meeting the expectations of today’s online shoppers. Fast, reliable shipping improves customer loyalty and retention.
Bonus Tip: Faster shipping times also reduce the likelihood of returns, as customers are more likely to be satisfied with timely deliveries.
4. Expand Your Canadian Customer Base
Canada is a growing market for e-commerce business, with over 27 million online shoppers as of 2023. By moving fulfillment operations to Canada, you can tailor marketing strategies and promotions specifically for Canadian customers.
For example, you can:
- Offer free shipping promotions within Canada (since costs are lower).
- Reduce delivery times and improve customer service, making you more competitive.
- Build trust and credibility with Canadian customers by emphasizing that orders are fulfilled locally.
5. Simplify Customs and Logistics Management
Cross-border shipping involves dealing with customs declarations, tariffs, duties, and import taxes on every shipment. This complexity can lead to errors, unexpected fees, and time-consuming admin work.
By partnering with a Canadian fulfillment center, you eliminate most of this complexity. The center handles customs clearance during bulk shipments, and you only deal with local shipping afterward.
This streamlined approach allows your team to focus on scaling the business rather than worrying about logistics headaches.
Real-World Example: How a Home Décor Store can save $2,000/Month
Before Switching:
- Monthly orders to Canada: 100
- Cross-border shipping cost per order: $20
- Tariff per order: $10
- Total cost per order: $30
Total Monthly Cost: $3,000
After Potentially Moving to a Canadian Fulfillment Center:
- Monthly bulk shipment customs fee: $500
- Domestic shipping cost per order: $10
Total Monthly Cost: $1,000
Monthly Savings: $2,000
By reinvesting these savings into marketing and customer acquisition, the store can see a 20% growth in Canadian orders within three months.
How to Get Started with a Canadian Fulfillment Partner
Moving your fulfillment operations to Canada doesn’t have to be complicated. Here’s how to start:
- Assess Your Canadian Order Volume: Identify how much of your revenue comes from Canadian customers and how much you currently spend on cross-border logistics.
- Evaluate Potential Savings: Work with a logistics partner to calculate potential savings based on bulk shipping, reduced tariffs, and domestic shipping rates.
- Choose the Right Fulfillment Center: Look for a partner like TradeSpace that offers flexible packages, scalable solutions, and strong customer support to help you grow.
Why TradeSpace Is the Perfect Partner for US-Based E-Commerce Businesses
At TradeSpace, we specialize in helping e-commerce businesses like yours reduce cross-border costs and improve operational efficiency. Our Canadian fulfillment services include:
- Bulk receiving and customs clearance
- Domestic order fulfillment within Canada
- Scalable pricing packages for businesses of all sizes
- Dedicated support to ensure a smooth transition
Ready to make the switch and start saving? Contact us today to learn how we can help.
Don’t let tariffs and rising costs slow your growth. By partnering with a Canadian fulfillment center, you can protect your margins, improve customer satisfaction, and expand your reach in the Canadian market.
