Thinking of starting a new business in Canada?
If so, dropshipping could be an excellent option!
Unlike most other commercial businesses, you won't need to invest in physical stock or worry about warehousing and shipping your products.
Dropshipping also allows entrepreneurs to keep up with consumer trends and shifts in demand to adjust their product catalog as needed.
In this article, we will give you a dead-simple guide on how to start a dropshipping business in Canada that will take just a few minutes of your time to read.
But that's not all! You will also learn about our top-five tips for starting a dropshipping business in Canada.
Sounds great, right?
After reading this article, we hope that you will be ready to start your own successful Canadian dropshipping business!
Should you start a dropshipping business in Canada?
Let's start with this question.
Is it even wise to start a dropshipping business in Canada?
It goes without saying that if you live in Canada yourself, it will be an advantage for you to start a dropshipping business in Canada compared to other countries.
However, a country that can support a successful dropshipping business should have other properties too.
These are the main ones:
- Fast shipping options. The country needs to have fast shipping options available, usually ePacket or better.
- High GDP per capita. It's better to target a country where the average income of the residents is relatively high. It equals a higher disposable income!
- High social network penetration. If many of the country’s residents are present on social media like Facebook and Instagram, reaching them will be much easier.
- A large population. When dropshipping in a country with a large population, scaling problems like ad fatigue are less likely to occur.
Well, guess what?
According to these requirements, Canada would be an excellent country to start a dropshipping business in!
First of all, the infrastructure and shipping options in Canada are excellent. At the moment of writing, the estimated delivery times for AliExpress packages sent to Canada are even earlier than those sent to the US!
Therefore, delivery times shouldn’t be a problem for your dropshipping business. And you can always use a Canadian dropshipping supplier to shorten your shipping times to just a few days.
So, what about economics?
Then, there's only one last thing to look at; the population and their social media usage.
The population of Canada is currently around 38 million, which should give you more than enough room to scale your business.
And as you can see in the figure below, a significant amount of the population is a digital buyer and could therefore be your customer in the future!
Also, the average resident of Canada spends around $1,746 on ecommerce purchases. How much of it will you be able to capture?
At last, Canada has a social media penetration of 84.9%, so you should be able to reach a majority of your audience through social media marketing.
In the end, the combination of these statistics makes Canada a great country to start a dropshipping business in.
Here's an infographic that summarizes the reasons why Canada is such a great country to target as a dropshipper:
And what about dropshipping from Canada?
Do you live in Canada?
If so, you may be wondering if you should start a dropshipping business from Canada. Said differently, by selling products manufactured or stored in Canada!
Let us tell you this; it could definitely be a smart move!
As you've read above, Canada is already a great market to target. By using a local dropshipping supplier, your products won't have to cross halfway across the world anymore, as they often must when you're using a supplier located in China.
The effect? Much more competitive delivery times!
And… a great way to win customers over your competitors who still use Chinese suppliers.
So, if you see an opportunity to do this, you should go for it!
Another option of starting a dropshipping store from Canada is by selling Canadian products to other countries. This happens way less often but could be worth it if you found a local supplier with a really unique product.
It's called the reverse dropshipping model, and here's how it works:
Note that the image gives the US as an example, but it works the same way for Canada!
Reverse dropshipping is a relatively new online business model that literally reverses the traditional dropshipping model.
It involves buying high-quality items from suppliers in Canada or Europe and selling them to wealthy people in China.
Once again, check out this article for more information! But as always, be aware of the downsides of this, such as high costs of goods sold and shipping costs.
Here's how to start a dropshipping business in Canada in 8 steps
Ready to start working on your online business? Awesome!
Here are the eight steps on how to start a dropshipping business in Canada:
- Decide between a general, niche, or one-product store
- Pick out the right products to sell online
- Define your ideal target audience
- Find a dropshipping supplier
- Pick your preferred ecommerce platform
- Designing and branding your dropshipping store
- Set up your payment gateways
- Promote your store with social media and content marketing
Unfortunately, guiding you through all steps in detail would make this article way too long.
Don’t worry, though.
If you are interested in a detailed guide on creating your dropshipping store, check out this article.
Alternatively, you can follow our checklist, a step-by-step guide that includes 22 steps you can follow to start your dropshipping store!
But don’t leave this article just yet. Below, we will give you our best tips for starting a dropshipping business in Canada. Not only that, but we will also answer some frequently asked questions about dropshipping in Canada!
As a final note, remember that starting a successful dropshipping store in Canada is not as simple as it may sound.
There will be times when you will feel like it’s better to quit. However, remember that this is just part of the process. Try to evaluate and, if necessary, adjust your plan, and you will see that brighter times will come!
5 Tips for starting a dropshipping business in Canada
Starting a profitable dropshipping business in Canada is no easy task.
But that makes sense; otherwise, everybody would do it!
However, some things do make the whole thing simpler.
Here are five of our most valuable tips if you're planning to start a dropshipping business in Canada!
1. Use an ecommerce platform that supports your Canadian business
Picking an ecommerce platform is an essential step during the start of your dropshipping business.
It is a platform that allows you to design, build, and manage your store. And each platform does it a little bit differently!
There are many ecommerce platforms to choose from, so picking the best one can be challenging.
Picking a platform that offers the right features, is easy to use, and provides excellent customer support will make everything a lot easier.
The platform that fits you best depends on a few things.
- Do you have the budget to spend on a platform with a bit more features?
- Are you looking for the platform with the best SEO performance because you want to market your store organically?
- Do you want a platform that doesn't require a lot of web development – or do you want more freedom?
Whatever it is, the following table may help you decide which platform to pick:
|You need:||The best options(s) for you:||Read Review|
|The best platform overall||Shopify or BigCommerce||– Shopify Review|
– BigCommerce Review
|The best SEO performance||WooCommerce||– WooCommerce Review|
|The platform built for dropshipping or POD||ShopBase||– ShopBase Review|
|The cheapest option||ShopBase||– ShopBase Review|
|The platform with the best resources||Shopify||– Shopify Review|
|The most flexible and customizable platform||WooCommerce||– WooCommerce Review|
|The platform with the easiest setup for an online store||Shopify or ShopBase||– Shopify Review|
– ShopBase Review
And if you are still not sure, let us give you our recommendation.
Lastly, remember that you can always read our review of them (link in the table above) before starting if you have any doubts!
If you're unsure of which ecommerce platform to pick, take our quiz here to get a personalized recommendation based on your needs:
2. Use a dropshipping supplier located in Canada
We have already mentioned it a bit, but another great tip is to search for a dropshipping supplier located in Canada!
This way, you will benefit from:
- Faster shipping times
- An easier return process
- Selling high-quality products
- A better customer service from your supplier
- Not holding any inventory
Not too bad, right?
The only downside is that you may have to pay a bit more for the products themselves, but you will get all of the listed benefits in return!
Once again, we have a table for you. This time, it's an overview of some of the best dropshipping suppliers in Canada!
By clicking on the supplier's name, a new tab will open to that supplier's website.
Besides, if you click on ‘Read Review,' a new tab will appear where you will be able to read our review of that supplier, including things like their pros and cons:
|Spocket||General||$24 to $99 per month||Spocket Review|
|Syncee||General||$29 to $99 per month||Syncee Review|
|Art of Where||Print on demand||Free||Art of Where Review|
|DropCommerce||General||$19 to $89 per month||DropCommerce Review|
|Printful||Print on demand||Free||Printful Review|
Tip: Want to discover more dropshipping suppliers in Canada? If so, check out this article!
3. Think about Canada's most preferred payment methods
When starting a dropshipping store in Canada, you must think about the preferred payment methods of your customers.
If you don't offer these, they may go away, and you may lose sales!
You receive payments from your customers through so-called payment gateways.
These third-party companies make sure all funds go from your customer's account to your own account safely and smoothly.
So, which payment methods do you think are the most popular in Canada?
It turns out that credit cards are by far the most preferred payment method in Canada, with a rate of 55%. This includes popular cards like VISA, MasterCard, and American Express. When adding that 11% of transactions are made with debit cards, this rate rises to 66%!
Last but not least is a direct bank transfer. 7% of ecommerce transactions in Canada used bank transfers in 2020.
One popular payment method specific to Canada is an online banking system called “Interac.” Basically, you should offer it as a payment option on your store to let customers check out safely and securely from within their own banking environment.
To sum up, if you can offer the payment methods in the following list on your dropshipping store, you will satisfy pretty much all of your visitors!
- Credit card
- Debit card
- Amazon Pay
- Apple Pay
- Bank transfer/Interac
If you struggle to choose the best payment gateway for your store, we recommend reading our article about the seven best payment gateways for dropshipping stores in 2023.
4. Learn about your Canadese dropshipping business' expenses
Starting a dropshipping business in Canada is not something you do for free.
You will need to reserve a budget to invest in your dropshipping business.
One of the first things you will have to buy is your domain.
We recommend checking out Namecheap as it offers one of the lowest prices for domains. Besides, it provides free privacy protection, which will keep your name and information private.
Luckily, a domain is not that expensive. For less than $11 per year, you can have your own professional .com domain! (Which you can then use as a custom email address as well.)
Next up, you will need to pay for your ecommerce platform. Most people choose Shopify, which costs$39 per month for the basic plan after your free 3-day trial + pay $1/month for the first 3 months has ended.
You may also need to pay for some dropshipping apps that add some extra functionalities to your store. However, if you choose the right apps, they may very well all be free. Check out the best Shopify dropshipping apps for beginners here!
Then, you may need to pay for your dropshipping supplier. Some Canadian dropshipping suppliers (like CJdropshipping) are free, while others (like Spocket) can be paid and often cost you around $29 per month.
Once you have started dropshipping, marketing could be one of your highest costs. Some people will need a marketing budget of $250 before they see any success, while others will need $1,000-$2,000 or even more.
Here is an overview of the costs that you may expect when starting a dropshipping business in Canada:
|Domain (Namecheap)||~ $11 per year|
|Ecommerce platform (Shopify)||$39 per month|
|Dropshipping apps (costs vary depending on you)||~ $10-$50 per month|
|Dropshipping supplier||~ $0-$29 per month|
|Marketing||~ $0-$2,000+ per month|
For a detailed discussion on what costs you may come across when dropshipping, take a look at this article!
5. Learn about the three types of sales taxes in Canada
Taxes are always a complicated subject when it comes to dropshipping businesses.
Each country has its own rules when it comes to taxes, and since the dropshipping business model often involves several different countries, it can quickly become quite complicated!
If you sell dropshipping products in Canada, you may need to charge sales tax for your orders.
Canada has three types of sales tax:
- A federal tax system, called Goods and Services Tax (GST)
- A provincial system, called Provincial Sales Tax (PST)
- A combination of the above systems, called Harmonized Sales Tax (HST)
The Goods and Services Tax is 5% and should be paid to the federal government.
The Provincial Sales Tax depends on the province and usually ranges between 0% and 10%.
However, some provinces combine the GST and PST into one single tax, the Harmonized Sales Tax. The following provinces charge HST:
- Newfoundland and Labrador (15%)
- Prince Edward Island (15%)
- Nova Scotia (15%)
- New Brunswick (15%)
- Ontario (13%)
For an overview of the tax rates in Canada in each of the provinces, you can check out this article!
Remember, if you're not sure how the taxes work for your dropshipping store, it's best to contact a local tax authority. They should be able to help you!
Dropshipping in Canada FAQs
Starting a successful dropshipping business in Canada isn't easy, so we can imagine that there are still some questions wandering around in your head!
Therefore, we have created this frequently asked questions section to try and answer them.
Is your question missing? Don’t worry; just write it in the comment section below, and we may add it here too!
Is dropshipping in Canada profitable in 2023?
Yes, Canada is a great country to target as a dropshipper. It offers a high GDP per capita of $52.1k, a high spend on ecommerce purchases of around $1,746, and Canada's ecommerce market is expected to reach an annual growth rate of 5.61%! (Source)
How much money do I need to start a dropshipping business in Canada?
You’ve already learned a bit about the expenses you can expect from a dropshipping business in Canada from our fourth tip.
Generally, the costs of starting a dropshipping business are relatively low at the start and increase when scaling your store. To start a dropshipping business in Canada, we recommend having a starting budget of at least $300.
How do I find dropshipping suppliers in Canada?
Awesome that you're thinking about this! A Canadian dropshipping supplier will allow you to lower your shipping times and be much more competitive than the stores still using Chinese suppliers.
You will be able to find 12 excellent dropshipping suppliers from Canada in this article!
Is dropshipping legal in Canada?
Yes, dropshipping is a legal business model in Canada. As a retailer, you aren’t obliged to have a product you sell in stock or possession. (More info here)
Still, remember that you should register your dropshipping company in Canada and comply with all laws regarding consumers, online stores, and taxes. Getting a clear insight into these laws is best done by consulting with a professional.
How do I find a good niche for my Canadese dropshipping store?
We recommend picking a dropshipping niche that interests you or that you are passionate about.
If you want to get some inspiration and see the possibilities, check out our 25 best dropshipping niche ideas here!
How do you start dropshipping in Canada?
For a complete step-by-step guide on starting a dropshipping business, check out our dropshipping checklist here!
Other countries to start a dropshipping business in
Not sure yet about starting your dropshipping business in Canada?
We’ve got you covered! Check out the lists below to learn more about starting a dropshipping business in a different country:
- How to Start a Dropshipping Business in Europe
- How to Start a Dropshipping Business in Australia
- How to Start a Dropshipping Business in the United States
- How to Start a Dropshipping Business in the United Kingdom
Plus, check out our guide here, which contains the best countries to target when dropshipping!
There you go!
We hope that you have a better idea of how to start a dropshipping business in Canada after reading this article.
Canada is an excellent country for dropshippers as people living in Canada generally have a relatively high disposable income and can be reached through various social media platforms.
A final tip from us is not to go too far in your research before actually carrying out the initial steps of creating your dropshipping business.
In short, learn as you go!
Covering all the information you need to start a dropshipping store in Canada from start to finish is way too much to cover in one article.
Therefore, we advise you to follow our step-by-step checklist. By doing so, you will learn everything much quicker!
If you have any questions left, just leave them in the comments below.
Good luck with starting your Canadian dropshipping store!