New entrants to the Canadian market from abroad are increasing, offering goods Canadians are buying when visiting (the US), importing, or goods they previously couldn't access. The question for US based distributors / sellers is, "Do we ship goods to Canada from the US or do we set up shop in Canada." Both have important implications.

Throughout the recent recession, it seems the Canadian consumer's appetite for goods of all types outpaced demand from the US and other countries. With weak US sales, US wholesalers and retailers logically looked to Canada to push continued business growth.

Why Offering Goods to Canadians Makes Sense

The barriers for entry to Canada are few, which means when US companies look for sales growth – Canada makes sense despite its relatively smaller market size. The countries share a country-spanning border, the same language is spoken, free trader and favorable trade agreements are in place and both value each other as huge trading partners. In sum, trade is welcome.

That said, there are considerations and costs to doing business abroad. Does it make most sense for US companies to sell cross-border on a per order basis? Establish relationships with Canadian sellers and distribute from the US and supply outlets in Canada via wholesale sales? Establish warehousing and distribution in Canada? Establish a physical wholesale / retail presence (a la Target, Marshall's and WalMart before them to name a few)? In this latter case, you're essentially a start-up in Canada because you're establishing full operations – often too costly and complex save for large corporations who are making a calculated, capital-intensive investment to expand their retailer market footprint.

Outsourced Warehousing and 3PL Solutions in Canada

Establishing warehousing, distribution and fulfillment in Canada can be faster, easier and more cost effective for US based companies – large and small. Top tier warehousing and distribution companies are often integrated with transported and logistic networks. Further, these warehousing companies are specifically in the business to take on the warehousing and order fulfillment function for remote US clients who establish a sales network in Canada.

The process for getting your US based companies products in the Canadian marketplace can be simpler than you think. Beyond the cross border brokerage / duties details to work out with Canadian customs and tax implications, the actual mechanics are quite straight forward.

3PL Warehouse Fulfillment Capabilities

You will need product stored and ready for distribution as Canadian outlets or consumers demand it. That means the warehouse will ship your goods by the skid load (to your Canadian retailer partners) as required. If you have not yet established retail partners, perhaps you're taking online or mail orders from Canadian customers. Your warehousing should be equipped to pick, pack, and ship directly to consumers. Often, these warehousing partners full understand the concept of "drop shipping". In sum, they act on your behalf to ship orders directly to consumers "from" you. In short, you're contracting them to be your warehouse. An integrated logistics and warehousing partner will also be able to get you great rates on shipping – be it courier discounts or freight rates.

Varying Warehouse Space = Flexible Space, Flexible Costs

Establishing operations in Canada, therefore, need not involve a huge capital investment. A warehousing partner should allow you to grow over time and accommodate your space needs based on overall growth, and seasonal fluctuations. Often, they charge on the space your actually using at any given time in the billing cycle – not on a fixed square footage basis. Also, you're charged on a per order fulfillment basis. This all adds up to more closely aligning costs with actual sales and warehouse space needs. The more inventory you hold and the greater the sales, the more you pay – and inversely. This just makes good business sense and mitigates cost risks for US companies partnering with a 3rd party Canadian warehouse.

Location of Your 3PL Canadian Warehouse

Finally, consider your Canadian warehouse and distribution location, location, location. Canada is a country of 35 million people – potential customers. You will want to locate in the most densely populated consumer markets. Consider that the Greater Toronto Area is Canada's most populated area, which falls what is known as the "Golden Horseshoe" surrounding Lake Ontario. This area is home to some 9 million Canadians, or nearly 26% of the whole population. That is a market size that rivals any large US market. In fact, nearly central within the Golden Horseshoe is Burlington, Ontario. It provides an excellent warehousing and distribution point from which to establish your Canadian fulfillment operations. It is close to all major highways and minutes from Toronto Pearson Airport located in Mississauga, Ontario.

US companies looking to establish a Canadian presence to grow their business have a lot to consider and with careful planning and relatively low cost, may find that partnering with a 3PL and warehousing company in the Greater Toronto Area may put them on a fast track to accessing a lucrative Canadian consumer.