Shipping, Shipping & More Shipping?

[remindme]

Maybe there is an executive here that can help out.

I have some Canadian customers that are having a tough time competiting with their US counterparts when selling the same consumer product offering.

Example: If a US company would be shipping to Canada it would cost them roughly $10 US average. On the reverse you are looking at roughly $15 US.

That is a 50% increase in shipping cost and depending on the product it might just put them right out of the running.

As we know the Internet consumer is very much price conscious.

Has anyone been able to even out the score from the Canadian side of the fence?? Besides the obvious which is to sell more???

[JPnyc]

That doesn't appear to have an immediate solutiuon, other than perhaps some type of cooperative? I mean contacting retailers in the other country with a similar inventory, and working out a barter system so that neither of you is mailing to consumers outside your country. That way both parties would save money, albeit not the same amount of money.

[vbeal]

Going between US and Canada, I think this is the order of cheapest to most expensive: Canada to US, Canada to Canada, US to Canada.

A parcel 10x 4x 10 inches weighing 1 pound:
- Canada shipping to USA: $6.50 CDN
- Canada shipping to Canada: $10.32 to $12.27 CDN (depending on distance)
- USA shipping to Canada: $14 USD which is $16 CDN

(Yes it is usually cheaper for a Canadian to ship small parcels to the US than within Canada. It drives Canadians nuts and no one can figure out just what Canada Post is thinking here. One factor is that parcels over $5 postage going outside of Canada don't get charged tax. Parcels within Canada do.)

JPnyc had it right on. By shipping it from within Canada you save a Canadian buyer a bit more than $4 on shipping small parcels.

I would be interested in knowing an average price for US to US shipping on that parcel size (10x 4x 10 inches weighing 1 pound) however. Is it possible that Canada to US (at $6.50 CDN) is cheaper than US to US shipping on the same parcel size?

[remindme]

Vbeal,

What service are you referring to??

[vbeal]

My apologies, I typed in Canada Post somewhere, but obviously not clearly. The rates I used are for Canada Post Domestic small parcel (Canada to Canada)and Canada Post Air. I looked up the US to Canada rate on the USP (or is it called USPS). I beleive it was called Global (faster than regular surface mail).

If you go through fedex.com rate guides you'll see a similiar trend. Fedex Ground (Canada to Canada) is more than Fedex International Ground (Canada to USA) which still works out to a $4 to $5 savings over using FedEx International Ground (USA to canada).

Again it is using the same box size and weight that fits into a "small parcel" category. I have no clue about the shipping rates moving to packets or large parcel sizes.

I only discovered the silly Canada to Canada Vs. Canada to US oddness when I had to ship a big lot of items (same item same package) to both Canadian, US and International.

[nategeeze]

This is a really interesting post. I'm probably responding a bit late.

This is the kind of problem retailers face that we designed shipwire for. One option is to get your Canadian merchants to store their inventory in the U.S. and then fulfill locally. This has some obvious benefits - speed, clear customs once in bulk, lower cost shipping and better tracking of orders, individual orders don't have to make it through customs.

The reverse is true. If a U.S. merchant has Canadian customers, shipping each order to Canadian customers is expensive and clearing customs can insert unnecessary risk into the equation. The U.S. merchant can bulk move inventory to Canada and then fulfill locally out of the warehouse.

Note, if an out of country business is bringing inventory into the U.S. they need a Fed Tax Id. Pretty simple and we have a FAQ on it.

The opposite is also true, if a U.S. merchant is moving inventory to Canada they need to have a Business Number from the Canadian Revenue Agency. Simple process, again we have a FAQ.

This is what fortune 500 companies due and there is no reason that a growing/new web retailer can't do the same thing.

Hope this makes sense.

On Vbeals comment about it being cheaper for a Canadian to ship to the U.S. than Canada to Canada; while it may be true for small parcels the dynamics change when you factor in breakage across the border, speed of delivery and making your end-buyer happy. This is one of the reasons large companies don't put their customer satisfaction into the hands of customs officers.