Dropshipping: What does it mean?
Dropshipping, also known as retail arbitrage, is a method of reselling products. It involves selling products online or opening a selling account on an internet marketplace. eBay, Amazon, Shopify, etc.) Without having to hold the inventory. This means you don’t have to preorder the items you want to sell, and you can store them in your home, garage, or other location. These products are stored in warehouses by the suppliers. You can order the item directly from your supplier once you have received it. The supplier will ship the item directly from their warehouse to you.
Does dropshipping work in Canada?
Dropshipping is possible in Canada. Dropshipping is possible from anywhere, as it doesn’t require that you hold inventory. It is important to find dropshipping companies for Canada that ship products within the country or to another country. Then, open a shop or sell account on eBay Canada, Shopify or other platforms. These items can be sold.
Dropshipping Canada: Why should you?
It is a good idea to research the Canadian eCommerce market before you start dropshipping. These help you to understand your customers, their expectations and the types of products that you can sell. We have compiled the following important facts about eCommerce in Canada.
Here are the facts about eCommerce in Canada
Let’s take a look at some statistics regarding eCommerce in Canada.
- 72.5% of Canadians purchase online (27,000,000 potential buyers).
Canada’s large digital population has made it a highly profitable market in recent times. The number of digital buyers in Canada surpassed 27 million users in 2021. This means that 72.5% Canadians purchased goods and services online. Furthermore, this percentage is expected to rise to 77.6% by 2025.
- 14th place in the world for internet penetration (110 hours per month online).
An average Canadian spends 35 hours per year online, using the desktop and 7.5 hours per month on the tablet or using mobile devices. Canada ranks 14th globally in internet penetration rates, 15 spots higher than the U.S. with 33.38 million Internet users.
- Continually increasing E-commerce sales.
The statistics also show that in 2021, retail ecommerce sales of physical goods reached almost 37.2 billion Canadian Dollars (29.9 trillion U.S. dollar). This figure is expected to rise to 50.1 billion Canadian Dollars (40.3 billion U.S. dollar) by 2025.
- Ranking 20th in GDP per capita ($43,278 USD).
The standard of living in Canada is very high. It is usually measured using the Gross domestic product indicator (GDP). It is a measure of a country’s economic strength and performance. In 2020, the GDP per person in Canada was $43,278. It is ranked 20th in the world. This indicator is smaller than the Australia and the USA, but it is larger than the United Kingdom, France (New Zealand), Italy, Spain, and others.
- 7th place in eCommerce spending per capita (1.746$).
Canadians don’t spend as much as people in France, Australia, and the US, despite their high standard living. They still spend a lot. The Canadian eCommerce spend per person is 1,746$. This is 4,41% of their total salary. They don’t buy as quickly and they like to shop more than their neighbors.
There are many opportunities for eCommerce in Canada. You can still start a dropshipping company in Canada, or expand an existing eCommerce business.
Here are some facts about eCommerce in Canada
Dropshipping is legal in Canada
Dropshipping is legal and allowed in Canada. Dropshipping in Canada is legal. You must follow the import restrictions and declares. Taxation and sales allowed in Canada are also important. Privacy Policies and Terms and Condition must be included on eCommerce websites. Canadian warehouses for dropshippers should not use misleading or false information regarding the products or their websites.
What about eCommerce taxes in Canada?
You may be required to collect sales tax if you sell products online in Canada. This will help you adjust your dropshipping margins, and add the taxes to each product you sell. Canada’s eCommerce taxes depend on what type of business you run and where your customers live.
You should consult local tax authorities and tax professionals to ensure that your customers are charged the correct tax rates. Also, you file and remit taxes correctly.
The summary page of the federal government shows all sales tax rates for Canadian provinces.
Canada has all three sales taxes:
- Federal tax system GST (goods & services tax).
- Provincial taxation system called PST (provincial sale tax) .
- H Armonized Sales Tax, HST,, which combines GST with PST to create 1 tax.
The federal goods-and-service tax ( GST in Canada) is 5%. It is a national tax that you must pay to the federal government.
The province’s sales tax ( PST ) is determined by the province and paid to the local government. Some provinces also charge PST in addition to the GST. In these cases, two tax lines must be included on the invoice. It can vary from 0% to 10% , depending on which province it is. Take, for example:
- British Columbia and Manitoba have 7% PST.
- Quebec has 9.9% PST
- Saskatchewan charges 6% for the PST
- Northwest Territories and Nunavut don’t have a provincial tax.
To implement the HST (harmonized sale tax), certain Canadian provinces will harmonize their provincial Sales Taxes (PST) with GST: These provinces are:
- New Brunswick,
- Newfoundland and Labrador
- Nova Scotia
- Prince Edward Island
In provinces that do not have an HST, the GST rate is 5% and the combined GST/HST rates are 15%. Ontario, however, has a 13% rate. This tax is charged as a single tax.
The information provided above does not replace official information and regulations. To ensure you are familiar with eCommerce Canada taxes, contact a local tax authority or tax consultant .
How to Start a Dropshipping Business in Canada
Dropshipping in Canada is a great way to get started. Dropshipping can be done on Amazon, Shopify or eBay.
This video provides a brief overview of each one of these online marketplaces that are available to beginner dropshippers. You can see what each type of dropshipping offers.
- Register for an account to sell/open an online store.
After you have chosen your selling platform, you need to open a seller account. If you decide to dropship on eBay in Canada then you will need to open a selling account with eBay Canada. To receive payments, you can also create a PayPal business account.
You will need to create an account on Shopify and open an account for Canada dropshipping. You can either do it yourself or hire someone to help you.
You must call your online store on any eCommerce platform. Start with the first sale and review, and you’ll build a small brand reputation.
- Choose a reliable supplier.
Only cooperate with trustworthy suppliers. Dropshipping is only possible when you have reliable suppliers. Dropship providers make and store items, give descriptions, photos/videos, and ship the products to customers.
Create an account on your supplier’s website. There you will place your order. If you source products from overseas suppliers, make sure to verify the seller’s reviews, selling rating and delivery methods. Also, check shipping costs. If you are unsure about the quality of an item, you can order samples or review all comments and photos left by buyers. You can also communicate with your supplier to confirm the customer service and speed.
Before you start selling on your eCommerce platform, it is important to review the policies. This will ensure that you are following all legal requirements and choosing the right dropshipping supplier. If you have chosen eBay Canada, make sure to read the dropshipping policy. It will be clear that eBay Canada only allows you to source products from wholesalers (e.g. CJ Dropshipping Chinabrands Wholesale2B, and others. Dropshipping on Shopify is easier because you can use dropshipping suppliers (e.g. Wayfair, Amazon, Walmart, etc).
- Register for an account with dropshipping software
Dropshippingsoftwares can automate many of your routine tasks and save you time. The DSM Tool dropshipping tool allows you to list multiple products or one product on your online store in just seconds. It also takes all necessary data (photos and title, product description, specifications, etc.) from your Canada dropshipping supplier. It can also automatically optimize your store, create beautiful designs, and alert you when you have a negative income, or violate any rules.
This software can monitor and update your product’s inventory and price, as well as notify you if there is any change in the product source. This software is especially useful when you sell more products online, and cannot keep track of all of them manually.
- Do product research to find profitable products for dropshipping in Canada.
The next step is more difficult. This requires that you learn how dropshipping product research. You can learn it yourself or with additional tools. You can, for example, spike popular products on one of the most popular eCommerce websites and then find them in your supplier so that you can sell online.
It is covered in detail in the following webinar. I will not go into it, but you should know what the other important parts are before you start dropshipping in Canada.
Masterclass on how to choose the right products for dropshipping
Which niches are most popular for dropshipping in Canada
Analyzing the Canadian eCommerce market and its shopping habits will give you a starting point for dropshipping product research, store optimization and marketing campaigns. Dropship Academy has compiled some information about the most popular niches in Canada for dropshipping.
- 46% Canadian buyers shop in the apparel/apparel market.
- 35% Buy books, movies and music, or games.
- 30% Buy Consumer Electronics in eCommerce Stores.
- 29% of Canadian shoppers shop online for shoes.
- 26% online buyers buy cosmetics & other body care products.
- 21% order food & beverages online.
- 19% shoppers shop online for health products.
- 17% of online buyers purchase hobby-related products in online shops.
- 16% of Canadians buy accessories and bags online.
- 15% shoppers purchase DIY, garden, and pet items online along with furniture and baby goods.
- 13% prefer to buy online household products.
- 12% of Canadians purchase online outdoor and sports products.
- 5% Order products online from other niches
Drop shipping is a popular option in Canada because of this.
Analyzing niche stores can help you learn a lot. To get an idea of what Shopify is like, take a look at these examples.
Consider that dropshippers are often beginners who open a general shop, where they mix products from different niches. This is a great way to start your eCommerce journey. Dropshippers with more experience can increase the number of their online shops and add more niche-specific products. However, this requires more research to identify the right niche.
Dropshipping suppliers Canada
Dropshipping is a process that involves suppliers. These suppliers are the ones who can supply your products and correspond with you regarding product quality, shipping, item description, etc. It is crucial to only work with trusted suppliers. You should consider their standards regarding product quality, shipping and returns policies, payment options accepted, speed of communication with buyers and order processing. Dropshipping suppliers can make mistakes and you don’t want your customers to be disappointed. Before you start working together, double-check everything.
Dropshipping from Canada is easy with suppliers that have local warehouses. This can work in your favor. Dropshipping from China can bring you higher profits, but it also means longer shipping times. Many Chinese suppliers have warehouses located in the United States and Canada which speed up delivery times.
Dropshipping companies in Canada
Below is a list with a few of the most popular dropshippers in Canada. Some are wholesalers and some are retailers. All of them can be used by dropshippers to source products for their online shops.
Dropshipping on an online marketplace? Check their dropshipping policies for details about what suppliers you can use. For example, wholesalers are allowed to dropship.
- Ama , z to dropshipping in Canada
Dropshipping is a common service that this eCommerce giant provides. It’s also one of the most popular eCommerce sites in Canada. There are 350+ million products in dozens of categories. They also have a Canadian warehouse. The shipping time will take only a few days. All boxes will include the Amazon logo, which may be used to answer questions from buyers.
Amazon Canada Products Page
- Walmart Canada
Walmartis another popular retailer dropshippers use to source their products. Though it’s not dropshipping-friendly, it offers a big variety of products across quite different categories and fast shipping. Walmart Canada has a warehouse to help you make it happen.
- Lululemon Athletica is a Canadian supplier of dropshipping
Lululemon Athletica is a Vancouver-based fashion brand. It is a leader in the Athleisure market. The company was established in 1998. Its original focus was on yoga wear. Lululemon sells a wide range of athletic apparel including shoes and accessories.
Wayfair has been a leading marketplace in the home decor market. Drops Hipping from Wayfair Canada is possible due to the fact that this American company also has a subdivision in Canada. The company offers more than 18,000,000 products in 13 categories related to furniture and home décor. If you choose this supplier, keep in mind that the brand logo will appear on all packages.
Wayfair Canada website
- Objects Of Desire Fashion is a wholesale supplier to Canada
It is one of Canada’s top wholesale suppliers that specializes in selling clothing. They offer casual, party, formal, and tops as well as tops, dresses, outerwear, and accessories. They are now powered by Shopify. This supplier is dropshipping-friendly, offers fast shipping and the most common payment options.
- Dropshipping at Costco Canada
Costco is a large wholesale brand that has Canadian warehouses. Although it is most well-known for its grocery products, the company also sells goods in other niches such as electronics, clothing, and office products. Electronics, clothing, office supplies, and beauty products are all available. This supplier is a subscription-based business model. Customers who wish to shop there need to purchase a membership.
- Jerico – A Canada wholesale supplier of clothing
Jerico is a Canadian wholesaler of clothing. It has been in operation since 1987. It is a major supplier of blank clothing in Canada and the United States. The company is currently a leader in the production of eco-friendly clothing. They use eco-fleece and bamboo sustainable fabrics to make their clothing. This allows them to provide authentic Canadian apparel.
Jerico, Canada wholesaler
- Dropshipping to Canada by Costway
Costwayis a top retailer in North America and Europe, selling everything you need. There are many products to choose from, including home and garden items, sports and hardware, auto parts, DIY projects and more. Dropshipping from Costway allows for retail arbitrage. To sell their products on your eCommerce site or website, you can obtain a reselling contract. Costway Canada offers a 5-7 day shipping time within Canada.
- Coastal Contacts is a Canadian wholesale dropshipping supplier
Coastal Contacts has been a top Canadian wholesale supplier of eyewear. They have more than 2000 styles of contact lenses, glasses and sunglasses.
The website of Coastal Contacts, a Canadian wholesaler
- Alanic Clothing, a Canadian supplier of apparel
Alanic Clothing can be used to dropship apparel products from Canada. It is one of Canada’s largest clothing producers. It offers a wide range of clothing, for all ages and styles. There are many options for casual clothing, beachwear and sportswear as well as clothing, accessories, and shoes for men, women, and children.