15 Jan E-Commerce Expansion From Canada to the US – Are Multiple Warehouses the Best Solution?
For e-commerce merchants selling in Canada, the U.S. market is a logical next step to unearth new sales. International expansion can be a great opportunity, offering sales growth into new markets. However, with growth also come great challenges – more specifically the challenge of satisfying international customers with timely shipments that aren’t cost prohibitive, especially from a shipping perspective. When international orders to the U.S. start growing, you’ll have to consider the various options and decide if you should continue fulfilling from Canada or find an alternative to ship U.S. orders domestically. A third party fulfillment company with location in the US just might solve the challenge, and better yet a logistics company with locations in Canada and the U.S. could handle shipping for both countries – but is it the best option for your business?
The Challenges with Shipping Orders From Canada to the US
The two biggest considerations for Canadian retailers looking to ship to U.S. customers are time and cost factors. First, clearing the border is more time consuming, rather than having inventory in the U.S. and shipping domestically to U.S. customers. Clearing customs can add days if not an entire week to the shipping process. Second, on an order-by-order basis, clearing customs can cost quite a bit more to ship individual orders. If you pass this cost onto your customers, it may act as a barrier for some U.S. consumers wishing to purchase your goods, causing them to search for other similar products that cost less to ship to their doorstep. One solution is to “eat” some of this cost differential, but it still doesn’t decrease the timeframe it takes to deliver products from Canada to the U.S.
When Using a U.S. Fulfillment Center May Not Help
If you have products that are very light in weight, it might not impact costs as much as with heavier products since light products don’t cost as much to ship. However, longer shipping times will still be a factor for getting your goods from Canada to the U.S. Furthermore, if you are shipping extremely low volumes of orders, then it might not make sense to look for an alternative solution for U.S. order fulfillment, since fulfillment services may not be able to cost effectively fulfill a low volume of orders. Finding a U.S. shipping solution may not provide full justification when shipping timeframe expectations aren’t critical. In other words, if customers don’t need orders to be shipped quickly, then shipping U.S. orders from Canada may suffice. Finally, if you sell a large number of SKUs and have a low volume of orders, you may not be able to afford the added costs of additional inventory in another warehouse across the border.
When Finding a U.S. Fulfillment Service Does Make Sense
Conversely, if US orders are increasing, you want to build good brand trust with your customers, since they will talk to others directly or through social media. In this case, it will most likely make sense to start investigating U.S. based warehouse and fulfillment services. Additionally, when shipping timeframes are critical and customers expect the delivery of their goods quickly, you’ll likely be forced into looking at options outside of shipping international orders from Canada. Furthermore, strategically locating a fulfillment service within the U.S. that can reach people in different time zones efficiently and effectively will be extremely important. Finally, demands of your international customers for increased service levels will apply additional pressure that may sway your company into pursuing international fulfillment services. By outsourcing with a third party fulfillment company within the U.S., you’ll be able to offer increased customer service within the country of order origin, which can be very helpful in terms of closing additional sales and exceeding customers’ expectations.
Special Considerations for Using Multi-Location Fulfillment Firms
More and more, companies are outsourcing fulfillment in different capacities. For some, outsourcing a portion of the fulfillment and shipping makes most sense, while others outsource all shipping functions. In the case of international shipping requirements, you have the option of outsourcing warehouse and shipping of Canadian orders only or both Canadian orders and U.S. orders. One thing to keep in mind when choosing the best course of action for your business is that most multi-location fulfillment companies are larger corporations and focus on order fulfillment opportunities with greater volume. In addition, many multi-location 3PLs are more expensive than one location regional providers, and oftentimes offer less flexibility in terms of service, packaging, shipping, etc. When investigating the best options for fulfillment companies to fill the needs of your shipping requirements in Canada and the U.S., be sure that you consider an appropriately sized company that has the international scope but also meets your needs in terms of service levels and costs.
Ottawa Logistics Advantage
Ottawa Logistics is a perfect fit for e-commerce fulfillment in both Canada and the U.S. We have locations in Ottawa, Canada and Texas. Because of our multiple locations in Canada and the U.S., we can help you alleviate the pain of international shipping by split locating your inventory for more timely shipping in each country. Contact us today to learn more about our international fulfillment facilities. Furthermore, because we aren’t the largest scale 3PL company nor on the smaller side, we’re perfectly suited to help businesses of all shapes and sizes.