Better Business With Canada

Showroom owners in the Great White North reveal the last barriers to doing seamless business across the border.

 

Canada and the U.S. are one of the world’s largest trading partnerships, so the process goes relatively smoothly.

“Canadians and Americans are more alike than they are different, especially when it comes to their buying habits, and since the consumer drives retail, there’s not much of a difference between the two countries when it comes to retailing,” says Barbara Crowhurst, CEO of Retail Makeover.

Though many Canadian lighting showroom owners would agree, there are some things they wish their U.S. lighting partners realized about doing business with them.

Duty and brokerage fees can put our showrooms at a disadvantage.

The North American Free Trade Agreement allows Canadians to import products made in the U.S. and Mexico duty-free, but many American lighting manufacturers import their product from countries like China. The law requires Canadian retailers to pay duty on those items. Customs brokerage fees can also add up. U.S. vendors rely on customs brokers to get their shipments cleared through Canadian Customs at the border. Retailers are responsible for those costs as well.

“There’s no way around duty and brokerage fees on product coming in from the U.S., but they do have an effect on our prices,” says Bill Dehaas, President of Design Lighting in Surrey, BC. “The average retail customer doesn’t understand that, especially if they’re shopping and comparing products online.”

High, prepaid freight minimums make it difficult to get product shipments as often as we’d like.

Many retailers struggle to meet prepaid freight minimums, which range from US$1,000 to $5,000. Canadian retailers, especially those on the West Coast, need to take advantage of prepaid freight because shipping costs from U.S. vendors can really add up. In Canada, trucking routes go only East-West, so U.S. vendors shipping product from the East Coast to British Columbia, for example, get hammered with high freight costs.

“Because of high prepaid freight minimums, we have to wait for product every three to four weeks, when I’d love to have product come in every week,” says Dehaas.

One size won’t fit all.

Canada is made up of five distinct regions: the Atlantic Provinces, Central Canada, the Prairie Provinces, the West Coast and the Northern Territories.

“U.S. vendors usually assign one guy in Ontario to work with all of Canada,” says Norm Brown, Regional Manager at Norburn Lighting and Bath Centre in Burnaby, BC. “And geographically, that doesn’t make a whole lot of sense.”

Instead, Brown wishes U.S. vendors looked at Canada as an extension of the United States, expanding the existing U.S. territories north.

Products must be rated cUL.

Lighting sold in Canada must meet cUL or CSA safety and performance standards. While many manufacturers recognize this and design their product accordingly, there are some vendors that have yet to jump on board. Still, despite a few bumps, the road between borders is fairly smooth.

“Thirty years ago, there may have been many more differences to talk about,” says Brown. “But the truth is, most of the larger players understand how to do business with Canada.”
 

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