The Canadian market represents 33 million consumers who, coast to coast, have exhibited a healthy appetite for Surf/Skate/Snow and Outdoor products and apparel. Many emerging and established brands have had difficulty choosing a successful path to access this opportunity.
The traditional “wholesale distributor” model is not the only avenue through which to enter Canada. While there are a number of successful distributors, their portfolios are already full and in many cases, they have competing lines under the same roof.
There is the option to become a “Non-Resident Importer” and bring the Canadian territory under domestic management. The 1980 Canada-USA Tax Treaty enables U.S.-registered companies to conduct business in Canada without establishing a Canadian corporation or paying of Canadian taxes.
Many successful brands conduct business in Canada as “Non-resident Importers” or “NRI’s”. They have established relationships with Canadian sales agencies who attend US domestic sales meetings and report through the US sales management structure. Booked business is drop shipped directly to Canadian 3PL’s who specialize in managing the business of NRI’s and specifically the Action Sports market.
Also, because Canada does not have the same quota restrictions as the US, there is also an opportunity to transfer ATS product from the US warehouse to the Canadian warehouse to support in season sales.
The specialty 3PL’s provide additional services including credit solutions, returns and warranty management, invoicing, and vendor compliance value adds. They can also assist in registration and interpretation of NRI requirements when exploring the lucrative Canadian Marketplace.
Most also have strong relationships with customs brokers and freight forwarders who specialize in servicing the U.S. non resident importers.
Becoming an NRI represents a low risk option to establish your brand in Canada, maintain your margin and protect your brand equity. It is a variable cost model that requires little to no front end investment until sales are established.
