Most brands are attracted by the huge US market when first investigating the Amazon FBA platform. After all, it’s the largest consumer market in the developed world.
While the US might offer the largest number of active shoppers, making your brand available to our neighbors in Canada can help to expand your potential market and ultimately help generate more sales and revenue for your product.
Why you should list your product on Amazon.ca
- Less competition. Some observers watching the rise of Amazon FBA as a sales channel would describe it as a Gold Rush. There are hundreds of courses, books, blogs, and podcasts which teach people how to create their own “Private Label” product and list it on Amazon. Besides these upstarts, big brands in most categories almost certainly have a strong foothold on Amazon.com. But while most of these folks are focusing on the US market, few raise their eyes to the great white north. Or if they do, they are fulfilling orders from the US and having to charge the end customer very high shipping fees to cover their costs.
- Higher price point. The current selection is limited because there are so few sellers. This means the customers are willing to pay a higher price point. Be careful to consider the exchange rate though when listing your items - the Canadian and US dollars are often not in sync.
Amazon Canada: the opportunity
I see Canada as a bit of a sleeping giant. Canadians have been much slower to take up on online shopping due to relatively higher shipping costs, and less ingrained habits around shopping online.
Unfortunately Amazon is a rather secretive about data points like the number of products, sellers or even customers it has. Some data points compiled by research companies leads us to the conclusion that while the current overall Canadian market is much smaller than the US, there is a faster growth rate overall as more consumers start to recognize the convenience and range that online shopping affords them.
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Challenges with the Canadian market
- Currency fluctuations. The Canadian Dollar has depreciated significantly against the USD, meaning that retailers will end up with less in their back-pocket if they price their goods in Canada the sam eas their goods in the US. Brands may have to mark up prices for their Canadian customers, potentially making thier products less attractive.
- Transportation costs. Being large country with a relatively small population, transportation costs are usually higher than in the US. Logistics costs will likely be a larger percentage of your gross revenue.
- Less overall demand. Although the growth of e-commerce overall outpaces the US, Canada simply has a much smaller market of consumers.
Our recommendation is to for established Amazon Sellers to factor Canada into their international expansion plans after launching on Amazon in the UK & Europe. This may present more logistical challenges than selling in Canada, but Amazon UK & Germany in particular simply have far larger markets right now. But, selling FBA in Canada can be a relatively simple way to add an additional 5-10% to your existing sales on Amazon.