Expanding into Canada: what you need to know

In a few short weeks, we’ll be officially cutting the ribbon on our brand new Canadian fulfilment centre. It’s an exciting time; not just for us, but also for our clients who have their own international growth ambitions. 

Our Canadian FC will join the rest of our international network that currently spans North America, Europe, the UK and Australia. Our intention with each of these sites is to give our clients a low-risk, simpler way to secure a foothold in the markets where there is demand for their products, lowering the barriers that make it harder for them to scale up. 

But, given what’s right around the corner, the subject of today’s article is going to be Canada. Specifically, we’re going to take a look at why we chose Canada as the home for our sixth fulfilment centre, and some of the benefits of holding stock there.

Additionally, we’ll discuss the things that eCom brands should consider before making the decision to expand into Canada, and finally, how we can help your business set up and scale up over there.

So, why Canada? 

As we mentioned in the introduction, our fulfilment centre in Toronto, Canada will be our sixth so far. Given the fact that we’ve already established sites in several key markets across the world, Canada was the natural next step for us. 

Indeed, Canada currently stands as the eleventh largest eCommerce market in the world, and fifth largest in the English speaking world. While Canada does have a French speaking population, 87% of Canadians use English as their first language. 

As a business, we’ve always planned to prioritise English-speaking countries when opening up new sites. They simply make the most sense from both an operational and commercial perspective; the lack of both language and significant cultural barriers make it easier for us to diversify into English speaking regions. 

But enough about us…

Let’s be honest, you probably don’t really care about our decision-making process all that much. That said, we wouldn’t decide to open a fulfilment centre somewhere that had no real benefit to our clients. What would be the point in that? 

All this is to say that the fundamental rationale behind us choosing Canada is down to the fact that it’s home to a really exciting eCommerce market. First thing’s first; it’s pretty huge. There are over 29 million online shoppers in Canada, and that number is set to rise to 37 million over the next few years. In fact, over 90% of Canadians use the internet on a daily basis, which is the highest internet penetration rate in North America, and one of the highest in the world. 

Additionally, as of 2024, the Canadian eCommerce market is worth an impressive £47 billion, and it’s set to grow by 38% to £65 billion by 2028. Significantly, approximately 50% of online sales are generated solely by eCommerce-only businesses; aka businesses that don’t have any kind of brick and mortar presence. 

Benefits of holding stock in Canada

Any eCom brands that truly wishes to take advantage of the bustling online market in Canada needs to think about localising their stock. Holding stock closer to your Canadian end-customers has all sorts of benefits, which we’ll explore in this section.

Before we do that, though, let’s take a look at the most important differentiators for online shoppers in Canada. In order of importance, the top difference-makers for Canadian eCommerce customers are:

1. Cost of shipping
2. Free returns
3. Speed of shipping
4. Expected delivery date at point of purchase 

As you’ve probably worked out from the above, it will be incredibly hard to satisfy any of these differentiators if you’re sending orders over 3600 miles from the UK to Canada. 

Let’s take a closer look at each of these differentiators, and consider how holding stock in Canada can help you meet every one of them, thus benefiting your business. 

Cost of shipping

In the vast majority of cases, transatlantic shipping is more expensive than domestic shipping. eCom businesses can’t be expected to absorb the cost of fuel, customs, duties, and other costs associated with shipping goods to Canada unless the order value is significant. That means those shipping costs need to be passed over to the customer. 

With the cost of shipping being such an important factor for Canadian customers, it’s going to be extremely difficult to secure a foothold in that market without having a localised storage solution. Sending stock to Canada in bulk is much more cost-effective than sending individual orders as and when they’re made. 

It can also result in more sales from Canadian customers as you’ll be able to offer far more reasonable rates on shipping, meaning they’re less likely to look for local competitors. 

Free returns

While more and more companies have either phased out or plan to phase out free returns, many smaller eCommerce stores are willing to retain free returns to achieve a competitive edge. Indeed, if you’re trying to grow your presence in a new location – such as Canada – offering free returns could be an important pillar in your growth strategy. 

That said, it simply isn’t feasible to offer free returns if your customer needs to send their order back internationally. We fall into all the same problems we discussed in regards to the cost of shipping in the previous section. You need a local solution that can handle returns logistics within the border of Canada. 

To make free returns in Canada practical, you’ll need a reverse logistics partner at the very least; a company that can handle the returns element of your business domestically. However, finding a local company that only handles returns might be tricky, and you’ll miss out on the wider benefits and efficiencies that a full-service 3PL provider can offer. 

By partnering with James and James Canada, you’ll be better equipped to provide free returns in Canada, as we can process returns on your behalf, as well as handle all other elements of your storage and fulfilment.

Speed of shipping

We’re living in a time where next-day shipping has become the norm. While fast shipping might not be as important to Canadian customers as the cost, it’s still an important part of their decision making process. Why would they wait a couple of weeks for their order to be shipped from the UK when they can get a similar product from a local competitor next-day?

If you’re only holding stock in the UK, the only way you can compete with domestic Canadian businesses on shipping speed is by offering premium expedited shipping. But that comes at a price most customers simply won’t be willing to pay. The only realistic way to compete with local businesses is to hold stock closer to the end customer. 

By sending a portion of your stock to Canada, you can rely on the more affordable services of local carriers such as Canada Post. It’s much more achievable to offer next-day shipping at an affordable price for both you and your customers, and allow you to meet customer expectations far easier. 

Expected delivery date at point of purchase

As an international seller, you’ll need to try a little harder to win customer trust and give them the confidence to buy from you. One way to do this is to offer an estimated delivery date at point of purchase, because it creates less uncertainty and unknowns. 

While you’re certainly able to offer an estimated delivery date when shipping internationally, it’s usually far less precise and has a higher chance of being inaccurate. Long distance shipping is more susceptible to delays when compared to domestic shipping, simply because there are more variables at play while the parcel is in transit. Things like poor weather, delays at customs or changeovers at carrier hubs can all result in shipments taking longer to arrive than initially anticipated. 

Similarly, informing your customer that a parcel will take anywhere between 20-30 days to arrive isn’t particularly reassuring because it’s harder to plan for a delivery when you’re only given a rough window. 

These issues can largely be resolved by using local carrier services. While estimated delivery dates can sometimes be off, it’s generally far easier to predict when an order will arrive because local routes are much more predictable, and there’s less chance for unavoidable delays to spring their head. 

How to decide whether expanding into Canada is right for your business 

While the Canadian eCommerce market has undeniable opportunities for brands looking to grow, it’s important to do your due diligence and research before making such an important business decision. 

In this section, let’s take a look at some of the key things you should consider before making the decision to expand into Canada.

Check market demand 

Not all products have universal demand, and so assessing market demand is a critical step in deciding whether to expand into Canada. Indeed, conducting market research to understand the demand for your products helps gauge potential success and informs your market entry strategy.

Secondary market research tools like market research reports, consumer surveys, and analysis of industry trends can offer insights into consumer behaviour, preferences, and spending habits, helping you to make an informed decision about whether or not localising into Canada might be worthwhile.

Additionally, you can take a look at your own data, such as current sales from Canadian customers or website traffic from Canada to help inform your plans. 

Regulatory environment

Another key area to investigate is the regulatory environment in Canada. Like most countries, Canada has regulations designed to protect its people, environment, and the economy. 

When deciding whether Canada is right for your business, you should check in with product regulations to ensure that you’re able to comply with health and safety standards, labelling requirements, and environmental compliance. This is particularly relevant for food, health supplements, cosmetics, toys, and electronic goods. Similarly, take the time to understand the import restrictions around certain goods, especially if you plan to export particularly sensitive items such as food, plants, and certain consumer items.

Finally, don’t forget to check in with trademark and copyright laws. While in most cases doing business in Canada shouldn’t be a problem, it’s best to check that you’re not infringing on another business’ intellectual property rights in Canada.  

Competition analysis 

Analysing your competition in the Canadian market is crucial for understanding the landscape you’re entering. Identify direct and indirect competitors, and assess their market share, strengths, weaknesses, and customer base. This analysis helps in positioning your business effectively and finding opportunities to differentiate your offerings. Look for gaps in the market that your product or service can fill, or consider how you can provide superior value compared to existing options.

Competitive analysis should also extend to pricing strategies, marketing tactics, and distribution channels to ensure a comprehensive understanding of how to compete effectively in Canada.

All of the information you gather about your Canadian competitors will help you determine whether or not localising into Canada will be cost-effective for you. 

Cost-benefit analysis

Conducting a cost-benefit analysis is vital for evaluating the financial feasibility of expanding into Canada. This involves estimating the direct and indirect costs associated with the expansion, including market entry costs, compliance and legal fees, marketing and operational expenses, and potential tariffs or taxes. 

These costs should be weighed against the projected revenue and long-term growth potential in the Canadian market. Consider both tangible and intangible benefits, such as brand exposure and strategic positioning. 

A thorough cost-benefit analysis helps in making an informed decision, ensuring that the potential rewards outweigh the risks and investments required for successful market entry.

How James and James can help you grow in Canada 

Whether you’re determined to start growing your business in Canada or simply want to test the waters in a new market, James and James can help you. 

We have over a decade of experience helping eCommerce brands scale up in international territories, and with the imminent opening of our Canadian fulfilment centre, it’s never been easier to explore the exciting opportunities the eCom market over in Canada has to offer. 

We support high-growth eCommerce brands to grow internationally with an industry-leading combination of:

• Industry-leading facilities and processes
• Award-winning, preparatory inventory and order management technology 
• Client support from an in-house team of eCom experts

With that in mind, let’s take a look at the role James and James could play in helping set up and thrive in the Canadian eCommerce market.

A sneak peak at our Canadian fulfilment centre  

Our brand new fulfilment centre is located just outside Toronto, Canada, in the city of Mississauga. Toronto itself is the largest city in Canada, and the fourth largest in North America, setting up shop here gives eCom brands direct access to a significant portion of Canadian consumers.

Furthermore, Toronto has great transport links, including airports and railways, as well as the famous Port of Toronto. This, alongside Toronto’s close proximity to the US border, means that our fulfilment centre can provide next-day shipping to customers across all of Canada’s urban centres, as well as super-fast shipping to American customers south of the border.

Other highlights of our upcoming Canadian fulfilment centre include:

• Open from 8am-4pm ET, Monday to Friday
• Deliveries accepted until 3pm
• Same-day dispatch before 3pm
• 200k sq ft of warehouse space
• Live order tracking for your customers
• Seamlessly inventory management via ControlPort

ControlPort: designed to help you grow your business in Canada 

From a technical point of view, our clients can manage their orders and inventory in Canada in exactly the same way as our other sites. Our proprietary platform, ControlPort, gives eCommerce businesses a full suite order management and inventory management tools. 

The clarity and transparency of our platform allows our clients to track the status of their orders on a granular level, with feature-rich insight and reporting tools providing the data they need to manage stock efficiently and make smarter business decisions. 

Here’s more detail on how ControlPort can help you to successfully scale up in Canada:

• Real-time order statuses: See the precise location of each order as it moves through the fulfilment process, and get notified of any issues.
• Stock management: Whether you’re replenishing existing SKUs or sending us new and exciting product ranges, ControlPort lets you track new consignments as they’re delivered, checked and processed.
• ViewPort: Offer Canadian customers an unbeatable experience with ViewPort, our white labelled order-tracking portal that allows them to track orders in real-time and conveniently manage returns. 
• Inventory Insights: Our insights and reports remove the guesswork and need for time-consuming number crunching, presenting you with a wealth of business intelligence so you can make data-backed decisions. All of the reporting dashboards update in real-time, so you’ll always have the most relevant information at your disposal.

Client support from experts who know their stuff 

We understand that expanding into new territories can be daunting, especially if you don’t have a lot of prior experience in international expansion. But you won’t be doing it alone; our in-house Client Services Team will work with you to ensure that you’re getting the most out of your partnership with James and James, and have everything you need to navigate Canada’s eCom market. 

Whether you’re a new or existing client, your first port of call when setting up in our Canadian fulfilment centre will be with our Onboarding Team. They’ll work with you to get set up in as little as 4-6 weeks, and give you 1:1 training on how you get the most of ControlPort and your new Canadian fulfilment centre. 

As part of the Onboarding journey for James and James Canada, we’ll help you:

• Send your stock to our Canadian FC, and set up new SKUs if required
• Set up shipping preferences 
• Integrate your channels with the Canadian FC
• To understand the wealth of data available in ControlPort, and how you can use it to your advantage. 
• Support you as you work towards your go-live date
• Answer any questions you may have, whether that’s via video call or email. 

And once you’re live, you’ll have unlimited access to either our Client Service or Account Management Team, depending on your orders per month. Both teams will be on-hand to support you day-to-day, with account managers offering additional support services, strategic advice, and regular account reviews. 

If you’re interested in going live in Canada the minute we launch, you can get the ball rolling today. You can find out more about our Canadian fulfilment centre, and book a no-obligation consultation, right here! We hope you consider joining us in this exciting next chapter! 

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