Why American eCommerce Loves Canadian Fulfillment Centers

Canadian Fulfilment Centres

Brick and mortar businesses are quickly becoming a thing of the past. Gone are the days of traveling across town to find the right part for your car, try on new clothes, or search for unique holiday gifts for everyone on your list.

Nowadays, most people prefer to shop from the comfort of their own homes. Online shopping is more convenient, costs less, and offers a wider variety than traditional in-store shopping. In fact, at least 75% of people make online orders at least once a month, meaning eCommerce companies are rapidly growing.

Why Buying Online Saves Customers Money

Because of a law passed by Congress in 2017, known as Section 321, it is now more cost-effective for overseas companies to ship directly to customers than for American-based companies to buy in bulk and resell within the United States.

Thanks to Section 321, shipments valued under $800 are exempt from duty taxes. That means if a customer purchases something directly from China, they will not have to pay a tariff.

However, if an American company bulk purchases products from China to resell in the US, the goods will likely add up to over $800, resulting in a 7.5 to 25% tariff.

To make up the difference, these brick-and-mortar companies and some eCommerce companies have to charge their customers more.

The result is that more Americans are buying products directly from China rather than from US-based stores. While it saves customers money, it costs American-run businesses money.

The good news is that there is a simple, cost-effective way for American eCommerce to benefit from Section 321, thanks to Canadian fulfillment centers.

What Is a Canadian Fulfillment Center?

A Canadian fulfillment center is a place you can store goods purchased from overseas before directly shipping them to your customers in the US.

Currently, there are no harsh tariffs on goods from China entering Canada. When you partner with a Canadian fulfillment center, your products are kept in their warehouse until an online purchase is made.

Once the purchase is made, the fulfillment center prints the label, packages the item, and ships it directly to the customer, ensuring that no more than $800 worth of products per day crosses the Canadian-American border.

Why American eCommerce Loves Canadian Fulfillment Centers

Teaming up with a Canadian fulfillment center has several advantages that save American businesses money and a lot of time and headache. Here’s how.

1. Buy in Bulk While Enjoying Tariff Exemption

Buying in bulk used to save money, but now, making large purchases overseas can cost you much more. Using a Canadian fulfillment center allows you to save money by buying in bulk once again. It also ensures that you keep your products stocked and ready for paying customers, so you never have to worry about being out of stock or adding customers to waiting lists.

2. Save on Managing Your Own Warehouse

A Canadian fulfillment center keeps your goods in their warehouses, so you don’t have to worry about paying for and maintaining a warehouse. Inventory, employees, equipment, and insurance costs are a thing of the past.

3. Hand Over Packing and Shipping Responsibilities

Not only will a fulfillment center house your products, but when a customer makes a purchase, a label is printed, the product is packed, and the box is shipped. You never have to deal with carrier services or postage problems again.

Additionally, a Canadian fulfillment center ensures that you never exceed your company’s $800 maximum allowed per day, so you won’t have to worry about surprise import taxes.

4. Devote More Time to Marketing and Expanding

American eCommerce businesses love handing over the logistics of housing, shipping, and packing to Canadian fulfillment centers. It gives them more time and energy to focus on customer support and marketing.

When you have time for promoting your products and collecting feedback from your consumers, you can expand your reach and gain more clientele.

Canadian Fulfillment Centers: The Answer to American eCommerce

If you own an eCommerce business or even a brick-and-mortar business with online options, it’s worth considering partnering with a Canadian fulfillment center. Not only will you save money in the long run, but you’ll also save yourself time and frustration.

About Carson Derrow

My name is Carson Derrow I'm an entrepreneur, professional blogger, and marketer from Arkansas. I've been writing for startups and small businesses since 2012. I share the latest business news, tools, resources, and marketing tips to help startups and small businesses to grow their business.