When shipping internationally, it’s best to start out small. Starting with nearby countries is a great way to test the waters and see where you can improve. 

So consider the benefits of tapping into an additional 38 million prospective consumers—just across the border in Canada. 

The United States and Canada not only share a border but strong international trading as well. In 2018, the rate of ecommerce revenue in the Great White North was $22.037 million. It only makes sense that Canada would be an easy next step when expanding.

Learn more about how going international can expand your growth in the Future of Merchant Growth

When considering logistics, there are many affordable shipping options that offer decent rates and delivery speeds, especially with the United States Postal Service (USPS). However, it’s also important to keep in mind that your business will have to meet certain cross-border regulations and pay for related customs taxes and fees. 

Before marketing to your international shoppers, be sure to understand what’s required of you in order to avoid hold-ups in orders, leading to frustrated shoppers and lost revenue. 

In this article, we’ll lay out:

• Where to spend and save on shipping
• Best practices for customs and tariffs
• How automation can streamline returns

When establishing shipping and return policies on international orders, determine how you will manage rates. Will you be passing the cost of shipping to the buyer or will you offer free or flat-rate shipping? 

If you plan to have the shoppers cover the cost, clearly note on your website the various options for shipping and how many business days each option will take. If you plan to cover the shipping costs, is there another place you can cut costs? USPS, UPS, and FedEx all offer packaging for free, making it an easy way to save. For shipping rates, you can calculate the cost using rate calculators like this one from the USPS.

Canada Post actually partners with the USPS, making it an ideal delivery system. Once a package arrives across the border, the USPS will hand it over to Canada Post. There are several delivery options to choose from:

• Global Express Guaranteed: Starting at $71.10
• Priority Mail Express International: Starting at $54.75
• Priority Mail International: Starting at $30.35
• First-Class Package International Service: Starting at $15.75
• Airmail M-Bags: Starting at $55.00

Global Express Guaranteed tends to be more expensive but guarantees a quick delivery date with a money-back guarantee. Packages will arrive within one to three business days. For some locations in Canada, it may even be as quick as one day.

Priority Mail Express International is less expensive and still offers a quick turnaround on delivery. However, it will usually take three to five business days.

Priority Mail International is perfect for heavier packages that weigh over four pounds. It’s one of the more affordable options but will take longer for the buyer to receive their order. Typical delivery speeds are six to ten business days.

First-Class Package International Service is best for lightweight packages, valued at less than $400 and weighing less than four pounds (or large envelopes that weigh less than one pound). This is one of the cheapest options, but the delivery speed will vary, depending on the location.

Airmail M-Bags is ideal for products like books, sheet music, magazines, catalogs, promotional material or journals. The package should only weigh up to 66 pounds and delivery speeds vary, depending on the destination. 

As a bonus, depending on the size and weight, your company can use free Flat Rate Boxes and Envelopes (with envelopes and small boxes up to four lbs or medium and large boxes up to 20 lbs), which starts at $30.35. USPS also builds insurance into many of its shipping services, which will help cover lost revenue if any packages are lost or damaged in transit. 

Best practice for customs and tariffs

As with all international shipping, be sure to include the right customs forms. The United States post office requires that customs declaration forms appear on the label and include a description of the package’s contents. However, Canada has additional regulations that you should keep in mind. All packages and mail are screened by the Canadian Border Services Agency (CBSA) to maintain trade facilitation and tariff rating, as well as monitor any prohibited or restricted items. Generally, packages worth over $20 Canadian dollars are liable to be searched and possibly charged an additional handling fee. This can either be paid by you ahead of time or by the shopper in the destination country. Prohibited items include:

• Tobacco products (such as cigarettes, cigars, chewing/dipping tobacco, and e-cigarettes)

• Live animals (With exceptions for bees, day-old chicks/hatching eggs, parasites, leeches, and some other small cold-blooded animals)
• Specific types of plants (for a full list, you can contact Canada Post)
• Currency or antique coins
• Packages that are wet or emit a foul smell
• Lottery tickets or gambling items

There are three types of Canadian tariffs that you should keep in mind. The first one is a Goods and Services tax (GST), which is a five percent federal tax. If the package is worth $20 or less, you may not be charged, but it’s best to check with USPS first. The second is a Harmonized Sales Tax (HST), which applies to certain provinces and covers the provincial sales tax and the general sales tax. The rate for this will vary. The third one is a Provincial Sales Tax and covers any provinces not included in the HST. This tax differs based on the province but is usually five to 9.75%.

Additional tariffs will depend on the country where the product is manufactured. Thanks to NAFTA, all international shipments from the US to Canada aren’t charged. But, if your product includes parts made elsewhere, they may be subject to additional fees. Putting in the work to understand all that’s required of your business now will save a headache later. 

With the steady growth of online sales, comes the inevitable return rates. Using the right platform will help make deliveries and returns as easy and seamless as possible for shoppers. Not only will it help the buyer understand the required duties, fees and international shipping services, but it will help both you and the buyer track the package. This helps avoid lost items and boosts both revenue and trust in your brand.

Loop makes it simple for your business to keep shoppers engaged using multi-currency exchanges. Shoppers can easily exchange their purchase for another product that better suits their needs. Loop automates your return process, providing shoppers with tracking information, delivery updates without delays and excellent customer service, helping to build meaningful customer relationships.

Our integration with the Shopify Fulfillment Network makes the process simple. Your shoppers can instantly start a return, receive a label and return their package to a post office or drop-off center.

Want to start growing your Canadian customer base? Book a demo with Loop today.