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December 23, 2011
You”d think shipping to a country right next door to us would be as easy as crossing the border, but many US merchants shipping to Canada for the first time end up with a less than pleasant experience. Even big merchants like Zappos have decided to discontinue their offerings to Canada after numerous unhappy Canadian customers. Ah, if only they had decided to outsource this to the pros, like Shipwire!
Top complaints from merchants about shipping to the “Great White North”:
1. Brokerage fees – sometimes comparable to the miscellaneous fees from your monthly cell phone bill, they are hard to predict.
2. Lost shipments, lack of tracking abilities – once packages reach customs, it is very difficult to get a shipment update.
3. Shipments blocked by buyer when they get VAT charge – buyers refuse to pay additional “hidden” fees to receive their package that are actually handling fees that Canada Post or Canadian Customs charges.
4. Returns are a nightmare – it’s not unlikely that the merchant would rather abandon the product to save money, time and headache.
5. Unpredictable delivery times – with limited tracking abilities, it is difficult to give buyers a time frame for when to expect their package because of the delays at customs.
The most disliked thing about shipping to Canada is that the brokerage fees and VATs are difficult to estimate. Many times the receiver may have to pay additional taxes and handling fees before the package is released from customs. You can see how shipping to individuals could pose a problem: a buyer pays for shipping as stated on the website only to find there’s an additional fee upon delivery and disputes ensue. Of course, one workaround is to have your courier bill the fees to your account so your buyer doesn’t have to pay them – if this is an available option. But then you’re still spending more money than you have to and cutting into your margins by taking on all the customs costs.
There have been many reviews by merchants who recommend FedEx and USPS as their service of choice to handle such transactions. As a great alternative to all the hassle, Shipwire offers helpful tips and a shipping calculator so your business can be well-informed when deciding to offer shipping to your Canadian customers. Shipwire currently has two Canadian warehouse locations: Vancouver and Toronto. To help smooth out the US-to-Canada shipping process, we also have a wide variety of Canadian shipping options in addition to our platform.
How can shipping to Canada be less complicated?
Outsourcing your Canadian shipping needs to Shipwire would be the easiest bet, but for those who want to try the DIY approach, here are important things to keep in mind when using USPS:
1. Use the right Customs forms and fill them out appropriately
Use the green slip for First Class Mail, and the white one with the clear sleeve for Priority Mail. Customs does not/cannot provide tracking for packages, only packages with USPS tracking can be tracked. When filling out the customs forms, they require information on the contents, value (the price paid or winning bid); and for Priority Mail, both parties” names, addresses, phone number and/or email are needed.
2. Calculate Customs fees into your shipping costs, if any
Taxes (the most common fee), are only assessed by Canadian Customs on goods valued at $20CAD or more. A handling fee is also added when an item is taxed. The recipient then pays for both when the item is retrieved.
Duty is assessed on goods that are made or “originating” outside the US, Canada, or Mexico.
Bonus: When using USPS/Canada Post, the buyer will never get a “surprise” brokerage fee. However, using services like FedEx or UPS, which requires the use of brokers, will most likely incur those unpopular brokerage fees which may sometimes cost as much as the entire item plus shipping fees!
3. How to properly reuse boxes
Reusing old boxes is perfectly acceptable by USPS and Canada Post, Just make sure any old labels are properly removed/covered. There’s also no need to wrap your packages in brown paper, as it sometimes gets stuck in the machinery.
Still feeling adventurous? Good luck!
*UPDATE* Read Part Two »