How to manage eCommerce inventory in Canada from the US
Canada is right next door, making it a natural choice when your business decides to expand.
Nevertheless, doing business in Canada involves more than just working with customers who are slightly farther away. Canadian expansions mean working with a new market, understanding different regulations for business operations and taxes, and sending and receiving international payments.
Another thing to consider: managing your Canadian eCommerce inventory from the US.
Not sure where to start? Keep reading to learn more.
How to pay your international suppliers
You’re likely purchasing your inventory from suppliers, so your first step is to determine how to pay them.
Luckily, you have no shortage of options to choose from when sending payments to Canada.
Bank transfers are one of the most popular ways to send money — both to Canada and elsewhere in the world. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) network manages bank transfers by working with more than 10,000 financial institutions across the globe.
Paying your Canadian suppliers via a bank transfer is a good idea if you want to work with your existing bank or credit union. Another benefit is that the bank transfer process is quite simple. You simply ask your bank to set up the wire and provide the appropriate SWIFT code.
However, bank transfers have some downsides as well, including:
Long process times
Poor protection for both the payer and the recipient
High transaction fees
PayPal and credit cards
If PayPal was the first payment method that came to mind for you, that’s for a good reason.
PayPal has been a popular payment method for both businesses and individuals for over 20 years. It has built-in fraud protection, a customer-friendly dispute resolution process, and — most importantly — easy-to-use steps.
Unfortunately, PayPal’s drawbacks come in the form of high fees.
Expect to be charged between 1.9% and 3.5% plus a fixed fee for domestic payments, and an additional 1.5% for international payments. The percentage-based fee jumps to 4% for most international transactions that require currency conversion.
If you go with PayPal for your US-Canada payments, you may also have to contend with slow payment times, declined or canceled payments and potential account holds.
Credit cards offer a similar story: You may be used to credit card payments and assume they’re an easy option. But international transaction fees, currency conversions, and potential card cancellations can quickly disrupt your business operations.
Peer-to-peer currency transfers
Another option is to use a peer-to-peer (P2P) currency transfer, which involves transferring funds via a website or mobile app. P2P transfers are both incredibly fast and more affordable than bank transfers.
Nevertheless, these benefits come at the cost of poor security, unattractive exchange rates, and maximum payment amounts. For example, the popular P2P platform Interac only allows you to send up to:
$3,000 in a 24-hour period
$10,000 in a seven-day period
$30,000 in a 30-day period
Additionally, Interac will cancel any e-transfers that aren’t accepted within 30 days. And even if a payment is accepted, it can take days to clear.
Be sure to check the terms and conditions of the P2P platform you are considering to ensure it will work for your payment needs.
One final way to pay Canadian suppliers that’s growing in popularity is through a foreign currency account.
For example, a Global Business Account from Airwallex enables you to send and receive multiple currencies to more than 30 countries at market-beating FX rates (only 0.5% above interbank), including Canada.
And because Airwallex’s Global Business Accounts don’t automatically convert your deposits, you can collect and hold funds without exchanging them.
For instance, imagine you are paid for your products in CAD. Hold the funds there without converting them into USD, and then use them when it comes time to pay your Canadian suppliers. You’ve effectively avoided double currency conversions.
What’s more, Airwallex charges no startup or monthly account fees, processes payments within one business day, and has built-in security that meets the highest international standards.
How to manage your inventory
Now that you’ve determined how to pay your Canadian suppliers, you need to be ready to manage the products they provide you with. This starts with determining how much inventory to move into Canada.
"If you're looking at how much inventory you should be moving from the US to Canada, then you can't really go wrong by looking at the data. The sales velocity of similar products, especially if they're performing at a similar level to you in the US market, is a great indication of what you'll likely be selling once you get up to speed. Running out of stock can be disastrous early on, so allow for 60 to 90 days at your expected sales velocity depending on how quickly you can move more inventory into your warehouses. If you want to make your life easier, then use one of the numerous inventory projection tools available for Amazon to help you make a strong start."
-John Cavendish, CEO, Seller Candy
Even after you determine how much inventory to start out with, managing international inventory can be a logistical nightmare. Fortunately, resources are available to simplify the process.
For example, inventory management software from SoStocked was designed with global expansion in mind. It enables you to manage inventory across multiple marketplaces seamlessly. Take advantage of:
Customizable forecasting that allows sellers to incorporate marketing plans, seasonality, stockouts and incoming shipments for order accuracy
Inventory management workflows with purchase order and transfer orders systems to put your forecast ordering into action, tracking each order based on custom lead times
Inventory tracking on personalized dashboards to track inventory levels, inbound orders and upcoming order and replenishment reports
Expanding across marketplaces has its challenges, especially when it comes to juggling inventory and replenishment across multiple locations. SoStocked uses simultaneous forecasting to calculate your needs based on your business, your marketing plans and your expansion plans. It then alerts you to what you need, when you need it and where you need it, making market expansion much easier.
“To be able to successfully grow in other marketplaces, a reliable inventory system becomes crucial. Managing a couple of SKUs in one marketplace can be manageable enough, but when you add the complexity of additional marketplaces, warehouses, and more and more SKUs, the smart sellers are beginning to find ways to properly automate their inventory systems with real-time inventory data to ensure they don’t hurt their sales momentum and cash flow due to stockouts.”
- Chelsea Cohen, SoStocked
How to manage compliance, importing, and logistics
Once you’ve purchased your inventory, you need to worry about importing it, meeting compliance requirements, and navigating the logistics of this process.
This is where Zee comes in.
Zee is a compliance, importer of record, and logistics specialist. This means that your business can rely on just one resource for help with:
Creating partnerships with international freight
Facilitating quick customs clearance
Managing international shipping needs
“Your shop is ready to take off. Your customers across the globe are filling up their e-carts with your one-of-a-kind products. However, getting those products from your HQ to your customer’s doorstep is a bit more complicated than licking a stamp and slapping it on a package. Shipping and customs clearance can be a daunting task if you don’t know the ins and outs of importing. This is where you need the right partner on your side.”
-Rael Lowenthal, Head of Business Development, Zee
How to list inventory
Now that you have your inventory, you need to get it listed accurately and efficiently.
We recommend turning to JoeLister for help. JoeLister makes it easy to list and fulfill your inventory on multiple eCommerce sites using just one platform. It does this by automating processes such as:
Multiplatform catalog syncs
FBA order fulfillment
[Related: How to operationalize in Canada]
Make your Canadian expansion easier with Airwallex
A successful expansion to Canada requires visibility into your international payments and your inventory.
Luckily for your business, Airwallex and its partners can help.