Wondering how to start an e commerce business in Canada? That’s understandable.
With remote working and hybrid work plans becoming the new normal, everyone is discovering just how much you can do virtually. One such discovery is buying online and running a successful online business. That’s not surprising because, during the pandemic, several Canadians relied on e commerce businesses like AliExpress to cater to their needs.
That explains why online shopping is rampant these days. So, if you’d love to be a self-starter, selling online might be the way to go. However, starting a successful e-commerce business in Canada could be uphill but not impossible.
This guide will teach you how to execute your business ideas, market them, and boost online sales. With about 27 million e-commerce users, there are tons of online shoppers to cater to! Although numerous online businesses exist, you can carve a niche for yourself if you do it correctly. Ready to take advantage of this fact?
How To Start An E Commerce Business In Canada
Running your business online isn’t without its difficulties. But this guide will help you start selling online with ease. What do you need to do?
You have to do the following:
1. Find a Product To Sell
To get your e-commerce business up and running, you need to source a product to sell. Start by thinking about your interests and hobbies—what do you know much about? What are you passionate about? Some ideas could be:
- Clothing or accessories: If you have a keen eye for fashion, consider dropshipping apparel, jewelry, or bags.
- Home decor: Everything from candles and linens to art and furnishings. If you love interior design, this could be a great niche.
- Gadgets and tech: For the techies, selling the latest gizmos and electronics may be appealing.
- Hobby supplies: Whether it’s crafts, gaming, sports, or cooking, curating supplies for a hobby you enjoy could lead to success.
Once you land on a product category, find a supplier, choose specific products to sell, and build your online store. With some time and effort getting the word out, you’ll be on your way to launching your very own e-commerce business in Canada.
The opportunities to sell online are endless, so start with what you know and love. Your passion will shine through, allowing you to serve your customers better and stand out.
2. Run a Market Survey and Study Your Competition
To launch successfully, you need to know your market and competitors.
Do thorough research on your target customers. See what they buy, how much they spend, and their pain points. Find ways your business can solve them.
Afterward, analyze your competition. See what they offer, their prices, and their marketing strategies. Then determine how you can differentiate yourself to gain an advantage. Offer better service, selection, or lower prices.
Also, survey potential customers. Ask them questions to determine demand and interest in your products. See what they like and don’t like about current options and tweak your business plan based on the feedback.
Track trends in your industry. Stay on the cutting edge of new products, technologies, and services so you can incorporate them into your business.
Following these steps will set you up for success. You’ll launch confidently, knowing your ideal customers and having strategies to outperform your competitors.
3. Draft a Business Plan
Now, it’s time to outline how you’ll make your e-commerce vision a reality. A business plan helps you define your goals and determine how to achieve them. It’s a roadmap to get your online store up and running.
While business plans can seem tedious, a simple outline will do. Focus on:
- Your mission and vision. What do you want to achieve? How will your business improve customers’ lives?
- Your target market. Who are your potential customers? What are their characteristics and preferences? How will you reach them?
- Your products and services. What will you sell? How are you sourcing goods? How will you set competitive prices?
- Your operational logistics. How will you process orders and ship products to customers? What tools and resources do you need?
- Financial projections. How much will it cost to start and operate your business? How much revenue do you anticipate? What are your key milestones and metrics?
Putting your ideas on paper, even in a basic form, helps determine if your business idea is viable and gives you direction.
You can then build on your outline, adding details and revising as needed. A business plan may evolve, but it’s the first step to making your e-commerce dream a reality.
4. Create a Business Name
Choosing a business name is an important decision. You want a name that resonates with your target customers, reflects your brand, and is available for use.
- Brainstorm a list of keywords related to your products or brand identity. Think “eco-friendly,” “handcrafted,” or “Canadian.”
- Combine words in exciting ways: For example, “The Maple Leaf Boutique” or “Green Mountain Goods.”
- Check if your top choices are available as a .com domain and business name. There are free tools like Namechk and Domainr to search for domain and social media username availability.
- Say the names out loud: Go with a name that rolls off the tongue and is easy to remember.
- Consider your brand identity: Choose a name that matches the overall tone and image you want to convey—a sophisticated name for a luxury brand or a fun, quirky name for a gift shop.
- Ask others for input: Get feedback from friends and family on your top contenders. They may suggest names you haven’t considered or point out any issues.
- Once you’ve chosen a name, register your business and lock down the domain name and relevant social media handle immediately.
You want a name that will serve your business well for years. Put in the upfront work to find an available, memorable name that aligns with your brand.
The perfect name makes a great first impression on customers and sets the right tone for your e-commerce business.
5. Setup Your Shipping Strategy and Create Marketing Goals
What are your shipping options? Canada Post, UPS, and FedEx are popular options for Canadian e-commerce businesses.
Compare rates for the types of products you’ll be shipping to determine the most affordable carrier. You may need a freight shipping company for heavy or oversized items.
- Offer free shipping whenever possible. This is a major incentive for customers and can increase sales.
- Provide tracking for all shipments so customers can follow their delivery.
- Consider shipping rates when determining product pricing. Factor in handling and packaging costs as well.
Set Marketing Goals
Now that the operational side is handled focus on attracting customers. Set concrete goals to work towards, such as:
- Gaining 100 new email subscribers in the first month
- Achieving 200 social media followers in the first 3 months
- Driving 500 unique visitors to your site each month
- Generating 10 sales in the first 6 months
Track your key metrics to see how you’re progressing. Make adjustments as needed to pick up the pace or change direction. The key is to start marketing your new business right away to build brand awareness and start making sales.
6. Register Your Business In Canada
To legally operate your e-commerce business in Canada, you’ll need to register it. This involves choosing a business structure, registering the name, and obtaining the necessary licenses and permits.
The two most common structures for e-commerce businesses are sole proprietorship and corporation. A sole proprietorship is more straightforward, but you are personally liable for debts. A corporation provides more protection but involves more paperwork. Consider your needs and consult an accountant.
- Sole proprietorship: Easy to set up, inexpensive. You are personally responsible for all debts and liabilities.
- Corporation: More complex to establish but protects your assets. Requires annual filings and fees.
Register Your Business
- Choose a unique business name and check if it’s available by searching the NUANS database.
- File registration forms with your province and the federal government.
- Obtain a Business Number (BN) from the Canada Revenue Agency to register for tax accounts like GST/HST.
Obtain Licenses and Permits
- Check with your municipality and province regarding business licenses or permits required for an e-commerce company.
- Obtain necessary product licenses and permits if selling certain products like food, health products, or firearms. Requirements and costs vary.
With time and patience, your e-commerce business is properly registered and ready to launch in Canada. But don’t forget—there are ongoing obligations like annual filings, tax remittances, and license renewals to keep your business in good standing.
Stay on top of requirements and deadlines to avoid penalties.
7. Launch Your Business
Once your website is built and products are ready to sell, it’s time to launch! This exciting milestone means:
- Registering your business; In Canada, register as a sole proprietorship, partnership, or corporation. You’ll need a business number and may require permits or licenses.
- Setting up business accounts: Open separate bank accounts for your business transactions and funds. Consider using a payment processor that integrates with your site.
- Market your products
- Providing excellent customer service: Focus on the customer experience to gain loyalty and word-of-mouth marketing. Offer quick shipping, returns, and responsive support.
- Continuously optimizing: Track key metrics like traffic, conversions, best-selling products, and customer feedback. Improve your site, offerings, and marketing to boost sales and growth.
8. Building Your Ecommerce Website
The first step is selecting an e-commerce platform to build your online store. You can opt for a free website for a start, as there are simple ways to create one.
Some popular website options for small businesses include:
- Shopify: Easy to set up, no tech skills required. Offers affordable plans with lots of features.
- BigCommerce: Also very user-friendly with flexible plans. Can scale with your business.
- WooCommerce: You can self-install your WordPress and install this free WordPress plugin to turn your site into an e-commerce store. You’ll need to find your own web host and domain.
Next, pick a template or design your theme to match your brand. Ensure it’s mobile-friendly since many shoppers browse on their phones!
Add in your products, images, descriptions, and pricing. Don’t forget to include details like sizes, materials, and other attributes.
Set up your payment gateway so customers can pay you! Options like PayPal, Stripe, and Square are popular in Canada.
Build your site, test everything to ensure no issues, then launch! Promote your new e-commerce store on social media and with paid ads to start driving traffic and making sales. Congrats, you now have an online business in Canada!
Sourcing and Fulfilling Products
To source products for your e-commerce site, you’ll need to find wholesale suppliers, manufacturers, or distributors in Canada or that ship to Canada.
Search online for “wholesale suppliers Canada” or “[product name] wholesale supplier Canada.” Check out companies on websites like ThomasNet, Canadian Wholesaler Directory, and Wholesale Central Canada.
Reach out to suppliers that carry the types of products you want to sell and inquire about:
- Minimum order quantities (MOQs)
- Pricing for different order volumes
- Shipping fees and delivery timelines
- Product photos and descriptions you can use
Compare offers from different suppliers based on quality, selection, and pricing. You may need to order samples to determine which products you want to carry on your store.
Once you’ve selected your suppliers, set up accounts with them so you can place orders as needed to fulfill customer purchases. Be sure to factor their shipping times into your own so you know when to reorder products.
Finding a Fulfillment Center
Unless you want to handle shipping products yourself, you’ll want to partner with a third-party logistics (3PL) company that provides fulfillment services.
They can warehouse your inventory and ship orders to your customers on your behalf. Search for “fulfillment centers Canada” or “third-party logistics Canada.” Compare shipping costs to find one that meets your needs.
Ensure they are located in a province that charges appropriate sales tax for your products. They should also be able to integrate with your ecommerce platform to process orders and payments automatically.
Outsourcing fulfillment allows you to focus on growing your online business rather than managing inventory and shipping.
Marketing Your New E-commerce Business
Your marketing starts with designing an audience-friendly website. Once your e-commerce site is built and products are ready to sell, it’s time to spread the word! Marketing your new business is key to attracting customers and driving sales.
Leverage popular social networks like Facebook, Instagram, and Pinterest to reach your target audience. Create business profiles, share photos of your products, and run contests and sales promotions. Moreover, engage with followers by posting regularly and replying to comments.
- Start a Facebook advertising campaign to boost posts and gain new followers.
- Post product photos and tag them on Instagram to increase visibility.
- Create Pinterest boards of curated products to drive traffic to your site.
Search engine optimization helps people find your site when searching online. Choose keywords related to your products and business, and incorporate them into your site content, page titles, image alt text, and meta descriptions.
- Blog about your products, industry news, and other topics of interest to your target customers.
- Submit your site to directories like Google My Business, Bing Places for Business, and Yelp.
- Build quality backlinks by guest blogging on other sites or securing product reviews and mentions.
Collect customer emails at checkout and stay in touch with a regular newsletter. Share sales announcements, new products, helpful tips, and content from your blog.
Keep messages short, eye-catching, and valuable.
- Offer an incentive like a discount code or free shipping for subscribers.
- Segment your list based on customer interests and send targeted campaigns.
- Keep an ongoing drip campaign to stay top of mind even when customers aren’t buying.
With the right marketing mix, your new e-commerce business will thrive quickly! Keep experimenting to find what works best for your products and customers.
Note that you may also need to adopt customer relationship management tools to manage customer relationships.
FAQs on How to Start an Ecommerce Business in Canada
What Types of Products Can I Sell?
You can sell almost any type of product online in Canada. Some popular options include:
- Clothing and accessories
- Home Decor
- Handcrafted goods
- Gourmet food products
- Books, music, movies
- Toys and games
The possibilities are endless. Finding a product you’re passionate about that resonates with customers is vital. Most importantly, be sure you are meeting a need because people pay for value.
How Much Does it Cost to Start an E-commerce Business in Canada?
The cost to launch an e-commerce business varies greatly depending on the type of products you sell and the business model you choose. You’ll need to invest in:
- A professionally designed website (around $2,000-$20,000)
- Business registration and licensing (around $200-$500)
- Inventory (can be a few hundred to hundreds of thousands of dollars)
- Payment processing fees (around 2-5% per transaction)
- Marketing and advertising (budget at least $500-$1,000 per month to start)
With a modest initial product line and keeping costs lean, you can start an e-commerce business for $10,000-$25,000 or less.
The good news is many of the recurring costs scales with your sales, so you can start small and grow over time.
Start Selling Online With Ease
Now that you know how to start an e-commerce business in Canada, it’s time to get to work. It will take a lot of work, but you can build something great with passion, the right information, and dedication. Don’t get overwhelmed by all the details; just start with the basics and learn as you go.
E-commerce in Canada is thriving, so take advantage of all the opportunities. If you get stuck, don’t hesitate to contact your mentors for help. You’ve got this – now go out there and launch your successful online store!