The United States and Canada enjoy one of the longest borders and most valuable trade relationships in the world. Moving and selling goods between these two countries is often made easier due to their close ties, proximity, and trade agreements. But if you’re a Canadian business trying to sell to American customers – especially if you’ve never done it before – the process can be a bit intimidating.
While international trade and retail can be daunting, it’s far from impossible. As experts in this field, UCanTrade was founded with the purpose of solving this very problem, making it easier than ever for Canadian businesses to export into the United States.
Though this list is not exhaustive, we wanted to share some of our most fundamental logistics tips for Canadians selling to US customers.
Stay Up-to-Date on Canada-US Customs Laws
The world is always changing – and that includes customs laws. One of the reasons international retail can be intimidating for newcomers is first trying to learn all the rules and regulations, only to find that they’re updated and tweaked depending on the year, government administration, or trade priorities. Luckily, in the age of the Internet, it’s easier than ever to stay on top of those changes.
While talking with a customs broker can make navigating the sea of trade laws a lot less stressful, you can also find a ton of information from customs agencies on either side of the border. Be sure to check out the United States Customs and Border Protection dashboard as well as the Canada Border Services Agency page. Both pages have useful information on border crossings and customs regulations, as well as newsfeeds for any relevant updates.
Do Your Research and Organize Documentation Ahead of Time
Shipping across the Canada-US border can be stressful enough, especially if you’ve never done it before. There’s no need to further complicate it without proper preparation. Before your shipments get to the border, be sure to organize and provide correct documentation ahead of time. Not only will this save you time, energy, and stress, but knowing the ins and outs of customs rules and what documents are needed can also save you time.
For instance, some shipments might be able to use Section 321, simplifying border crossings. Doing your research might require some extra legwork upfront, but that little extra time can save a lot of trouble down the road, especially when it comes to sending goods across the border.
Understand Tax Nexus and Obligations
Much like each Canadian province, every state in the US has its own sales tax rules. Some states don’t even levy sales tax – and those that do don’t apply those taxes uniformly. When selling online, you have to be aware of your tax obligations in each territory you sell in, as well as whether or not you meet nexus requirements to collect sales tax at all.
To put it simply, sales tax nexus is the minimum activity threshold a business has to have in a given state or province before it is required to collect sales tax. While the rule of thumb is that you automatically have nexus in a state where you have a physical footprint, online sales tax nexus is triggered in most states either by a specific dollar threshold or number of sales within a certain timeframe.
Again, each state and province has its own set of rules, so be sure to check wherever your customers are and observe those rules to remain compliant. You can find a quick overview of tax nexus by state on Avalara’s page, as well as an overview of sales tax rates and rules in Canada.
NOTE: While tax nexus is an important part of eCommerce, we’re not licensed accountants, and thus, this section was included for informational purposes only. If you have any tax-related questions, please contact a trusted tax professional for more information on how sales tax nexus works.
Have a Stateside Warehouse to Avoid Overpaying on Duties and Fees
Did you know that you’re spending extra money by shipping into the United States from a Canadian location? Each trip across the border can trigger customs fees, which can become particularly expensive if any of your orders are returned and replaced. Instead, you can minimize your cross-border shipping costs by having a warehouse located on the American side of the border.
By having an American warehouse that handles order fulfillment and reverse logistics, you only need to worry about larger bulk shipments to keep the warehouse stocked. This way, any outgoing orders to your US customers, as well as any returns and replacements, are managed from this warehouse. This configuration strengthens your stateside supply chain, minimizing extra fees and duties from border crossings by eliminating unnecessary trips.
Automate Your Shipping and Warehouse Management Processes
Even if your business has been around for years, you may be operating at a different scale than when you first started. Just as your business grows and changes, so too should your processes, especially when it comes to warehouse management. With many digital tools, including AI-driven ones, there are plenty of NoCode and LowCode solutions available. Of course, using out-of-the-box warehouse management tools can be a great investment as well to get you started.
Of course, even just delegating your logistics tasks to a third-party partner can make all the difference, allowing you to focus on running your business and growing your brand.
Improve Your Cross-Border Logistics with UCanTrade
Trying to keep your business running and customers happy can be stressful in this digital age. This difficulty can be compounded by international borders, no matter how friendly trade relationships are. Still, you don’t need to be intimidated or overwhelmed.
The helpful experts at UCanTrade specialize in Canada-US logistics – after all, it’s in the name. If you’re interested in learning more about how you can improve your processes and shipping performance to your customers abroad, contact us today!