Common Pitfalls in Exporting to Amazon and How Canadian Executives Can Avoid Them

Common pitfalls Canadian executives face when exporting to Amazon include hidden international selling costs (currency conversion fees, shipping, taxes), compliance failures with marketplace-specific regulations, inadequate market research, shipping and logistics challenges, and difficulties navigating Amazon’s business practices and policies. To avoid these pitfalls, Canadian sellers should carefully manage currency risks, ensure full compliance with Canadian and international regulations, conduct thorough market research, select reliable logistics partners, and understand Amazon’s fee structures and seller support limitations.

Key details include:

• Hidden Costs: Currency conversion fees (2-4% per transaction), international shipping, marketplace fees, and complex tax obligations (VAT, sales tax, tariffs) can erode profits if not properly accounted for. Using fintech solutions like global accounts can help manage currency risks.

• Compliance: Canadian Amazon sellers must not assume U.S. compliance applies. They need to meet Canadian-specific requirements such as French labeling, safety certifications, and category gating to avoid listing restrictions or account issues.

• Market Research: Assuming U.S. market success will translate to Canada is a common mistake. Sellers should use tools like Amazon’s Product Opportunity Explorer and Brand Analytics to understand Canadian demand and competition before launching products.

• Shipping and Logistics: Selecting inexperienced freight forwarders or failing to protect inventory during transit can cause delays, damage, and increased costs. Adhering to Amazon’s packaging and labeling guidelines and using reliable carriers is critical.

• Amazon’s Business Practices: Small Canadian sellers report challenges with confusing fees, limited customer support, lack of control over refunds, and lower search ranking, which can impact sales and profitability.

• FBA Specialty Programs: Programs like FBA Export, Remote Fulfillment, and Pan-EU FBA can help sellers reach international customers while managing shipping and import duties more efficiently.

Canadian executives can avoid these pitfalls by:

• Engaging professional tax and legal advisors to navigate cross-border tax and compliance issues.

• Investing in market research tailored to Canadian consumer behaviour.

• Partnering with experienced logistics providers familiar with Amazon’s requirements.

• Utilizing Amazon’s FBA specialty programs to streamline international sales.

• Monitoring and managing currency exchange risks with fintech tools.

• Being proactive about understanding Amazon’s fee structures and seller policies to avoid surprises.

This comprehensive approach helps maintain profit margins, ensures compliance, and improves operational efficiency when exporting to Amazon marketplaces.