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How to import and dropship from China to Canada

Full Member
roysommerfeld
Posts: 4
Joined: 03 Apr 16
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30 Oct 16 02:04:23 am
Hi Folks,

I am located in Canada and want to start a small online retail business and want to try drop shipping for the first time. I'd like to drop ship from China, to Canada (Canada wide) and have only two questions about Business registration and Customs

I called and asked 3 different People who (I thought) should know everything about it and guess what,.... 3 different answers. If this is not confusing,... I don't know.

However,... Now I ask one of you , who is dealing with it on his/her daily basis, hoping that there is someone from Canada out there who knows a little about it.

OK, here are my 2 questions

1. since I'm going to sell online (inside Canada only) I was been told I have to register my Business in all Provinces and Territories.

Bullshitt or truth ?

2. Since I'm planning on doing drop shipping (mainly from China for now) , do I have to have an Import permit for this and have to clear and pay the duties for the Items coming into Canada or is the purchaser responsible for this ?

I don't know if I will have the time, to clear all these (most times) single Items, I don't mind at all paying the duties and fees and so on, I just like to know, what is the best way to get a product to the client with as less inconvenience as possible. Hiring a Customs Broker would make a single Item or even a small amount of Items of lower value exorbitant expensive.

So, what do I have to do ?


Thank you in advance for your answers.

Greetings
Roy

Site Admin
fudjj
Posts: 6117
Joined: 27 Jul 07
Karma: 
30 Oct 16 02:20:27 am
Hi Roy, let me start by saying I'm not a Canadian, so I'm just guessing half of this.

Let me start with the half I do know and that relates to who npays any import duties on arrival. As a Dropshipper, the product is sent directly to your customer and they are the ones that will get the import duty notification, iff applicable. Now I'm not sure what the import duty rules are in Canada, however I'm sure there will be some threshold limit in place.

Best place to find out what your free import limit is, is to speak directly with Customs and they are the ones who implement any and all applicable duties.

Now for the part I have no clue about and to be honest, I can't even hazard a guess. Best advice I can give is to contact your local business registration office and they are going to be able to give you all the relevent information you need. If you're unsure as to what office handles those affairs, just contact your local government office and they will most certianly be able to send you in the right direction.

Sorry I couldn't be more help :)


Mark (fudjj)

Community Manager
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Full Member
roysommerfeld
Posts: 4
Joined: 03 Apr 16
Karma: 
30 Oct 16 08:32:13 pm
Hi Mark,

Thank you very much for taking your Time answering my questions.
At least "the half you do know" was helpful.
At least for the drop ship and import duty part, because when ever I ordered something from abroad for myself, I was the one who had to deal
with the import duties.
This is also the info I've got from one of the people I asked this question.
It was probably a mistake asking multiple people, then you will get most likely several different opinions.

BTW , any help, no matter how small, is still considered help, right ?

thanks
Roy

Site Admin
fudjj
Posts: 6117
Joined: 27 Jul 07
Karma: 
30 Oct 16 10:52:43 pm
Cheers Roy, happy to help as much as I can :)


Mark (fudjj)

Community Manager
SaleHoo.com

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Full Member
roysommerfeld
Posts: 4
Joined: 03 Apr 16
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20 Mar 17 02:13:20 am
"1. since I'm going to sell online (inside Canada only) I was been told I have to register my Business in all Provinces and Territories.
Bullshitt or truth?"


NOT TRUE You just have to register in your own Province/Territory
In Saskatchewan, I have to have at least a PST Number when I want to run any type of Business! That's It!
And I do not collect any taxes on my sales when selling product directly from abroad.
Because this is the responsibility of my customer who has to pay all this when the product arrives at the Canadian border.
As a Dropshipper, the product is sent directly to your customer and they are the ones that will get the import duty notification, if applicable.


"2. Since I'm planning on doing drop shipping (mainly from China for now), do I have to have an Import permit for this and have to clear and pay the duties for the Items coming into Canada or is the purchaser responsible for this?"

I don't need any Import Permit if I drop ship from China or most other countries, this is only applicable if I want to buy inventory and if I want to do this I have to register for GST/HST in order to apply for any Import Permits.
It's that simple.

Full Member
dobesv
Posts: 3
Joined: 06 Feb 17
Karma: 
23 Mar 17 08:33:11 pm
Hi Roy,

How customs are paid depends on the way the items are shipped. It is possible with UPS or FedEx for whoever is paying for shipping to pay the customs duties, as an option. You have to set this up with the shipping service. If your supplier is shipping it themselves from China it is unlikely they will be set up to do this. By default the transportation company will bill the customer at the door, which many customers find upsetting and infuriating. If you go this route you MUST warn customers clearly there will be customs charged at the door or they won't be happy with you.

Note that in Canada if the declared value of a package is less than $20 then there will be no duties required.

Technically you are expected to collect GST from your own customers anywhere in Canada, and PST from your customers in any province you have a significant presence (office, warehouse, etc.). The customer is then entitled to request a rebate on the GST they are charged when they receive the package. Which sucks.

Basically, drop-shipping into Canada from an international location sucks for the customer because of the way taxes/duties are set up here.

In the USA you can receive a package with a declared value up to $800 duty free. So, drop shipping into the USA is much better.

If you really want to focus on drop-shipping from overseas, and your packages are likely to be worth more than $20, I would suggest that you do not focus on Canadian customers. Sell to the US instead, in US Dollars. If you don't label or advertise yourself as Canadian then your Canadian customers won't be as surprised if they get a tax bill along with their package, since they will think it came from a US company.

Cheers,

Dobes

Full Member
roysommerfeld
Posts: 4
Joined: 03 Apr 16
Karma: 
27 Mar 17 02:25:31 am
How customs are paid depends on the way the items are shipped. If your supplier is shipping it themselves from China it is unlikely they will be set up to do this. By default, the transportation company will bill the customer at the door, which many customers find upsetting and infuriating.

Yes.

I try to avoid transportation companies like UPS, DHL, Purolator and Fed Ex delivering to Canada because they let the customer pay through the nose for their Services at the border.

All Products get shipped by Air Mail for free or very low costs to assure that there will be less stress at customs (costs and processing) and faster shipping. That actually seems to work pretty well.

If you go this route you MUST warn customers clearly there will be customs charged at the door or they won't be happy with you.

This is what everybody can read on my website from day one, Nobody can say he/she wasn't aware of this.
----------------------------------------------------------------------------

Note that in Canada if the declared value of a package is less than $20 then there will be no duties required.


Correct
----------------------------------------------------------------------------

Technically you are expected to collect GST from your own customers anywhere in Canada, and PST from your customers in any province you have a significant presence (office, warehouse, etc.).

No Office, No Warehouse. My Computer is located in my kitchen, many things I manage from mobile devices from home or on the go.
I am just registered under my home address and my cell phone number and other mandatory information, that's it.

According to GST and PST Offices, in Saskatchewan I have to have a PST number for any kind of business I do!!! and a business number here in Saskatchewan, and if I do not make more than $30.000/Year I don't even have to register for and/or collect (if applicable) any GST.
Collecting PST in SK is (if applicable) when you make $10.000/ Year and more.
Also, after talking to CBSA, GST and local PST offices, Since I am Not the Owner and Sender of the goods (all Products get shipped from abroad directly to the purchaser). I am ONLY a Middle Man and do not collect Taxes. I only have to pay Income Tax for the service I offer.
The Purchaser is 100% responsible for all importing costs.

----------------------------------------------------------------------------

Basically, drop-shipping into Canada from an international location sucks for the customer because of the way taxes/duties are set up here.

agreed !
----------------------------------------------------------------------------

In the USA you can receive a package with a declared value up to $800 duty-free. So, drop shipping into the USA is much better.

If you really want to focus on drop-shipping from overseas, and your packages are likely to be worth more than $20, I would suggest that you do not focus on Canadian customers. Sell to the US instead, in US Dollars. If you don't label or advertise yourself as Canadian then your Canadian customers won't be as surprised if they get a tax bill along with their package, since they will think it came from a US company.


I think this is not a bad advice at all !

Thanks
Roy

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