Cross-border eCommerce 101: a guide for wholesale and retail SMEs

After years of building your wholesale or retail business locally, you may be ready to expand into international markets. For Canadian SMEs, cross-border eCommerce is one of the most cost-effective and accessible ways to reach a global customer base, without the overhead of physical expansion.

Canada has a strong foundation for going global, from access to trade agreements like the Canada-United States-Mexico Agreement (CUSMA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to a tech-savvy population and reliable infrastructure. In this guide, we’ll explore how to launch your international eCommerce journey, the common hurdles to watch out for, and how a platform like Airwallex can help you scale, even before you set up a local entity abroad.

What is cross-border eCommerce? 

Cross-border eCommerce, or international eCommerce, means selling products or services overseas through your website or global marketplaces like Amazon, Walmart Marketplace, or Etsy. Whether running a brick-and-mortar store, manufacturing products, or operating digitally, going cross-border can help unlock new revenue streams and drive international growth.

Exporting is a powerful way for Canadian businesses to diversify revenue and reduce reliance on the domestic market. In fact, SMEs that sell online are 13.1% more likely to export than those that don’t. Embracing cross-border eCommerce allows Canadian SMEs to compete globally without needing physical offices or storefronts abroad.

Why is cross-border eCommerce important for wholesale and retail SMEs?

When people talk about cross-border trade, they usually imagine large, well-established enterprises that serve ‌mass markets. However, wholesale and retail SMEs have much to gain from cross-border eCommerce. 

Here are several reasons to participate in global eCommerce sooner rather than later, and some enabling factors that can help:

Unlock overseas revenue streams

Canada’s population may be relatively small compared to global markets. Selling internationally allows you to tap into much larger customer bases and potentially earn higher margins in regions with less competition or higher demand for your products.

Diversify risk

Expanding to international markets can help reduce your dependence on the Canadian economy. If one market experiences a slowdown, you’ll have other revenue streams to rely on.

Better inventory management

Products that might move slowly in one market could be in high demand in another, shortening inventory holding periods and reducing stock stagnation. Cross-border eCommerce also helps extend a product's lifecycle. Introducing the product to new markets or discovering a new use for it in a new context can breathe new life into its lifecycle, even if it’s already declining in the Canadian market.

Easy setup through digital tools and platforms

Digital tools and eCommerce marketplaces have leveled the playing field, allowing Canadian SMEs to reach global customers without significant upfront investments. Platforms like Amazon, Etsy, or Walmart Marketplace make it easy to launch international storefronts, while tools like Airwallex Global Accounts allow you to receive and hold funds in multiple currencies without needing to open a foreign bank account.

By consolidating payments across currencies into a single platform, Airwallex helps you simplify global money management, reduce unnecessary FX fees, and reinvest more into your growth. 

How to get started with cross-border eCommerce

Venturing into global eCommerce can unlock new revenue streams, but only if you’re prepared to navigate the financial, operational, and regulatory complexities of selling internationally. Here’s a three-step roadmap to help Canadian eCommerce businesses simplify cross-border operations and scale confidently.

1. Research your next market

Start by identifying where the demand for your products is highest. Use local research, competitor analysis, and consumer behavior insights to find markets where your offering has a strong product-market fit, and ensure you're prepared to meet local expectations and legal requirements. Pay close attention to:

• Demand and market potential. Use tools like Google Trends, online marketplace data, and trade reports to assess customer demand, sales volume, and competition in your target markets.

• Buyer behavior. Learn how people in each market discover products, what payment methods they prefer, and which channels drive trust and conversions.

• Know the regulatory landscape. Understand the local rules before you launch. Review import duties, tax obligations, and consumer protection laws in your target market. Ensure your return policies, product labeling, and data practices meet local standards. When in doubt, consult with legal or accounting experts to stay compliant and avoid costly missteps.

2. Structure your finances for international growth

Selling internationally means earning, holding, and spending in multiple currencies. Without the proper setup, you risk losing margins to conversion fees or payment delays.

• Open a multi-currency business account. Instead of managing multiple bank accounts abroad, use a Global Account with local bank details to receive, hold, and send funds in major foreign currencies.

• Hold funds in the currency you earn. Avoid forced or double conversions. Pay suppliers in their local currency to reduce FX fees and improve payment speed.

• Set FX rules that protect your margins. Lock in competitive exchange rates or automate conversions based on thresholds to manage risk and simplify forecasting.

3. Control global spend before it controls you

Equip your business to manage expenses across currencies, teams, and vendors without losing visibility or margin.

• ̧Set up multi-currency corporate cards for employees. Issue cards in local currencies to reduce FX fees and give teams the flexibility to pay for what they need and where they need it.

• Use approval flows to keep spending in check. Route expenses based on category, amount, or department, so nothing gets paid without the right eyes on it.

• Pay vendors using local payment methods. Avoid international transfer fees and delays using regionally preferred rails like ACH, SEPA, or FPS.

• Consolidate global expenses in one place. Use a single platform to track spend across markets, teams, and currencies for better cash flow visibility.

5 challenges (and solutions) faced by cross-border eCommerce businesses in Canada

Although the growth opportunities are significant, cross-border eCommerce also comes with unique challenges for SMEs in Canada. Let’s explore these roadblocks and what you can do to overcome them.

Language barrier and cultural gap 

A good cross-border strategy requires a localized customer experience. Before entering a consumer market, consider cultural factors like family structures or religious beliefs. For B2B eCommerce, it means understanding local business etiquette.

Solution: Work with the on-the-ground team

Hire a local advertising agency or market research firm for accurate cultural information. These on-the-ground teams know exactly what drives sales for your target audience or what ideas can win consumers.

Shipping delays and logistics considerations

Customers expect to receive their orders on time, which makes shipment delays in customs a real challenge. These delays are caused by factors like frequently changing import duties or incorrect documentation. Transit times and order tracking can also be difficult to manage due to multiple carrier handoffs.  

Solution: Find the right logistics partner

When it comes to international delivery, it helps to work with a logistics partner specializing in cross-border eCommerce. They have smart software that automates error-prone manual document handling. Meanwhile, you can send your items to a local delivery hub, and they’ll do the heavy lifting of preparing your items for export and assuming the risk of being the exporter on record. 

Complexity of handling foreign currencies

A survey shows that 98% of shoppers worldwide prefer to browse and pay in their local currency, which means you must be prepared to handle multiple currencies. This comes with added complexity for SMEs, such as the foreign exchange risk that comes with automatically converting foreign currency into CAD.  

Solution: Get a multi-currency account from a fintech like Airwallex 

Many established banks offer multi-currency accounts, but consider getting a business account from a fintech firm like Airwallex instead. Airwallex’s multi-currency account with market-leading exchange rates can help you easily accept payments, as long as it supports the currencies in the markets you serve.

With Airwallex, you can also hold funds in your international customers’ preferred currencies, avoiding forced conversions and their fees. This also mitigates currency risk and gives you full control over when to convert based on favorable rates.   

Payment delays and hidden fees

Cross-border payments can take up to 5 working days to clear, and many banks can’t guarantee when your payment will arrive. These prolonged wait times can disrupt your cash flow, making it harder to replenish your inventory or cover operational costs. Accepting cross-border payments also comes with high fees due to the complexities of processing international transactions.  

Solution: Airwallex Global Accounts

Opening a local bank account can resolve the issue of delayed payments and high transaction fees. However, this process won’t happen overnight and can even require an in-person bank visit. 

Instead, use a fintech solution like Airwallex. Its Global Account lets you bank like a local in the US, UK, and other territories.

With a Global Account, you get a local bank code and dedicated account number in your SME’s name. This lets you accept payments like a local business, eliminating delays and minimizing transfer fees. The funds are then funnelled into your Airwallex multi-currency account, which you can convert, hold, or spend as needed. 

Regulatory complexity

Each country has its own regulatory maze to navigate, from import duties and tax rules to privacy laws and product labeling standards. For Canadian SMEs, overlooking even one requirement can lead to shipment delays, fines, or reputational risk.

Solution: Focus on a few key markets and get expert guidance early

Instead of trying to enter multiple countries simultaneously, prioritize one or two high-potential markets and invest the time to get it right. Work with local legal or accounting experts who understand the regulatory landscape, and leverage support from organizations like the Canadian Trade Commissioner Service. They can help you understand local compliance requirements and connect you with trusted advisors.

Case study: How RYSE simplified cross-border finances and saved $25K with Airwallex

RYSE, a Toronto-based eCommerce business known for its energy-efficient SmartShades, needed a better way to manage finances across Canada and the US. With most of its revenue in USD and expenses in CAD, the team struggled with high FX costs, slow transfers, and manual financial workflows.

By switching to Airwallex, RYSE now moves funds instantly between US and Canadian entities, pays global suppliers without batch payment fees, and saves over $25,000 a year on foreign exchange. Airwallex’s Global Accounts and Corporate Cards simplify expense tracking and vendor payments, helping RYSE scale efficiently while keeping costs down. 

Achieve your SME’s global ambitions with Airwallex today

Ready to start building a cross-border business? Create an Airwallex account in three easy steps, and let us handle your multi-currency payment needs.

Step 1: Create an Airwallex Business Account for free

Step 2: Submit documents and verify your business

Step 3: Transfer funds into your Airwallex account