Expanding to Canada: The Smart Way to Place Inventory
Loose Threads
Canada is a powerful opportunity for brands looking to grow — but the strategy you choose for inventory placement directly impacts profitability, brand control, and customer satisfaction. Here’s a look at the three main approaches, and why one clearly outshines the others.
Option 1: Ship Direct to Canadian Consumers from Abroad
(U.S., Europe, Australia, etc.)
-
Highest total landed cost per order
Duties are calculated on the full retail value of each shipment, not your factory cost. -
Expensive and slow
International freight per order is costly, shipping times are longer, and customs delays are common. -
Poor customer experience
Higher delivery costs, slower service, and difficult return processes erode brand loyalty. -
Not scalable
Works only for early testing — not sustainable for brands planning to scale Canadian sales.
Option 2: Use a Canadian Distributor
- Lowest control, highest costs to consumer
You sell inventory at a discount, while the distributor controls pricing, marketing, and sales channels.
(Result: You earn less, and customers pay more.) - Risk of brand erosion
Marketing and retail presence may not align with your brand’s global positioning. - Quick entry, but at a high cost
You sacrifice margin and control for speed.
Option 3: Store Inventory in Canada with a 3PL Like NRI
(Recommended Option)
- Lowest landed cost
Goods enter Canada unsold, allowing duties to be assessed on factory cost (not retail value)—cutting total landed costs significantly. - Total brand control
You retain ownership of inventory, direct control of sales channels, pricing, and customer experience. - Faster, lower-cost fulfillment
Inventory is already in Canada, enabling fast domestic shipping with dramatically lower freight costs (leveraging NRI’s carrier network). - Strong flexibility and scalability
Respond quickly to retailer reorders, manage eCommerce sales locally, and offer easy domestic returns.
Why Focus on Canada?
- $35 billion apparel market, growing steadily.
- Strong eCommerce growth: 14% YoY, with high demand for local currency pricing, lower freight, and faster delivery.
- Cultural alignment: Shared language, media, marketing seasons, and sizing with the U.S.
- Simple market entry:
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No entity formation required (Non-Resident Importer model)
o Easy GST registration (flow-through tax, not a cost)
o Advantageous trade treaties (e.g., CPTPP, CETA) that lower or eliminate duties from many sourcing regions.
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The Bottom Line:
By partnering with a Canadian 3PL like NRI, brands get the best of all worlds:
- Lowest landed costs
- Full brand control and consistency
- Fast, affordable shipping
- Simplified market entry
- Maximum revenue and customer satisfaction
Canada is ready for your brand. Let’s make the move the right way.
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