More and more Canadian small businesses and entrepreneurs have begun to explore online opportunities. As they settle into the Canadian market, they may consider expanding to markets outside of Canada.
The first international market that attracts Canadian sellers is the United States. It can be a profitable place to start or end your global expansion, and the market has many similarities to ours here in Canada. It can still be intimidating but there are tools and platforms that make it much easier, including online marketplaces.
Online marketplaces offer a digital place for your brand to sell products. Several of them also facilitate sales beyond our borders, including to the American market. They can be wildly popular with consumers (like Amazon), or help you reach very specific niches on a smaller scale.
Your expansion beyond our borders can be as small or large as you’re comfortable with. Online marketplaces aren’t as much of an ‘all or nothing’ situation, by comparison to building an ecommerce website of your own. You can test the market and grow your presence or product distribution as sales indicate. Setup is relatively easy, but there will be a manageable learning curve.
The format can vary between marketplaces, with some being more of a drop-shipping arrangement than a multi-vendor marketplace. For example, you can sell through an ecommerce marketplace, where your product will be added to their virtual inventory but you’ll ship directly to the customer.
Others may have you send in your inventory and they’ll fulfill the orders (as with Fulfillment by Amazon) or sell directly from your marketplace storefront and ship it yourself (Fulfillment by Merchant). For American orders, most Canadian marketplace sellers choose FBA and/or work with third-party fulfillment solution providers in that country.
Spreading your inventory across more than one marketplace (be it offline, online or both) and fulfilling those orders can be challenging without integration. Most sellers go through Canada’s Shopify for its versatile marketplace options, including inventory and fulfillment for eBay and Amazon. That allows you to bring it all together, and you don’t have to worry about tracking sales from multiple sources to monitor inventory.
Top Marketplace Channels for Canada-US Sales
You’ll find more online marketplace channels in the US, but most of them are shadowed by the big four just like they are here.
1. Amazon.com is probably the best known marketplace option for selling to Americans from Canada. It’s the number one place to shop online for most Americans. Their retail sales in the US alone are hundreds of billions, a large portion of which is through third-party sellers. You’ll pay for their popularity though, with fees for everything from warehouse storage to shipping, as well as a highly-competitive environment.
The easiest option is to use Fulfillment by Amazon, which not only handles fulfillment but also returns. All you have to do is send the inventory to one of their US warehouses and they handle the rest for a fee.
2. eBay.com was one of the first new & used online marketplaces in the US and Canada, be it direct sales or by auction. eBay.com also brings in billions in sales, although it is considerably less than Amazon.com. The upside is you won’t have to battle as many competitors. Canadians can sell to the American market with a few clicks, or create a storefront.
Fulfillment will probably be up to you, although they are piloting fulfillment management in the US so that may change soon. Currently, they charge variable “insertion fees” for listings.
3. Walmart.com is a name practically everyone recognizes. If you shop from them online, you’ve probably noticed they use third-party sellers to beef up their ecommerce selection. If you can get into this marketplace, you could bring home a share of the several billion US dollars in sales made in America every year.
4. Etsy.com is an international online marketplace for crafts and craft supplies. If you offer unique goods or supplies in this category, you can quickly expand your market to include American shoppers. The site is very popular and some merchants feel their fees are on the high side, but many Canadian sellers find success there.
5. Keep an eye out for niche marketplaces and communities that match your own. Their popularity in your target market may surprise you. Poshmark, for example, is a more social marketplace where shoppers can find clothing, accessories, beauty and home styles they love, then get the the same look with a click. They have more than 70 million highly-engaged members in the US and Canada! Poshmark is growing steadily and recently went public. If that’s where your ideal customer is you’ll not only sell more, but also build relationships and increase brand recognition.
Evaluate each platform that you think will work best for you, your brand and your products. Once you’ve narrowed down the choices, try them one-by-one. It isn’t a lifetime contract, you can drop any that aren’t profitable enough and try new marketplaces as you discover them. The promising potential of the American market is worth the time investment.
I recommend getting your feet wet in the Canadian market, before expanding globally through online marketplaces. You can define your online niche and determine which products are selling best. You’ll also learn things like data analysis, inventory syncing, competitive intelligence, and how to use the tools that make it all manageable & profitable.
Once you can confidently manage ecommerce on a smaller scale, you can begin the learning process for international marketplace sales. That said, if your budget allows for hiring experts you can move as quickly as you like.
Do you have questions about selling from Canada to the US using online marketplaces? Please comment below or join us in the Online Business Canada Facebook group!
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