The U.S. and Canada are part of the North American Free Trade Agreement (NAFTA), and as a result, Canada is the second leading purchaser of American goods worldwide.
The U.S and Canada share a border spanning 5,525 miles long, and Canada imports nearly $300 billion from the U.S. annually. Canadians purchase over $5.4 billion worth of cosmetics and personal care products each year; and 95% of products are imported, making Canada an ideal market to enter with foreign cosmetics and personal care products.
Canada is an ideal first step for U.S. beauty brands launching internationally. A majority of Canadians speak English and live in a democracy meaning their ideals and modes of communication are quite similar; and with so many similarities, Canada makes perfect sense. Here are a few suggestions to help navigate the Canadian marketplace.
Know Your Target Market
The size of Canada means the population is spread out with a majority living within the few major metropolises. Make sure your business has an understanding of the target consumer, their location, and whether they prefer mass market or prestige products. Knowing the product landscape and whether your product meets a specific consumer demand will affect your pricing structure and value proposition to help differentiate from competitors.
Understand Rules and Regulations
Rules and regulations relating to exports and imports differ in each country. Before importing begins, you should know the specific regulations and documentation required. Cosmetics, for example can be sold in Canada after filing a Cosmetic Notification form; however, if there are health claims associated with the product, it must also comply with distinct health and drug codes. This is particularly important to know because you may want to partner with someone in Canada that can determine which regulations you must follow before selling to consumers.
Considering regulations, it’s important to understand how long the process will be before your product reaches the consumer. Assistance with documentation prior to shipment is a very important component to help eliminate any risk of rejection at the border. Also, without proper execution, shipping directly from the U.S. to Canada may involve increased shipping rates, slow delivery and lack of tracking information.
When strategizing, you’ll also want to determine the way by which the product is sold. E-commerce adoption rates in Canada are on the rise, so it is vital to incorporate an e-commerce strategy into your launch plan. Setting up shipping and handling rates, as well as credit card processing that is specific to Canada, means your Canadian customer only pays what is relevant to them.
To ensure success, consider partnering with a Canadian vendor who can assist with the importation process and manage all the logistics from facility to customer. A vendor can help navigate each step, including transportation, customs clearance, brokerage, tracking, guaranteed fastest delivery times and lowest shipping rates. Utilizing a local vendor also means there are no surprise fees for the consumer, ultimately increasing retention rates and profitability.
When reflecting on recent Canadian shopping habits, it is evident that there is incredible demand for beauty products. Cultural similarities with the U.S. and evolving shopping habits make Canada a lucrative opportunity to start expanding your brand globally. Prior to launching, be sure to conduct the necessary research and partner with qualified vendors that can help mitigate the process and successfully launch your beauty brand.