How Canadian Small Businesses Can Gain Competitive Advantage in the U.S.

The prospect of exporting your products and services to the U.S. is exciting.  With a consumer base of 316.6 million people, expanding your business to the U.S. can prove to be very profitable. However, with this extensive consumer base comes a large swarm of competition – so when looking to expand your business to the U.S. how do you maintain a competitive edge?

Existing Advantages for Canadian Businesses

Canadian small businesses have a head start in U.S. markets thanks to proximity, existing policy and shared business culture:

North American Free Trade Agreement (NAFTA)

NAFTA has broken down many trade barriers between the U.S. and Canada by eliminating or reducing import duties allowing Canadian businesses to be competitive on price.

Geographic Location

Canada’s proximity to the U.S. allows Canadian businesses to use freight options – such as shipping via truck – which is more cost-effective than air or ocean freight.

Common Business Environment

The U.S. and Canada share time zones, speak the same language, and have similar business practices. These advantages allow Canadian businesses to communicate with U.S. companies during regular business hours, and without the complications of a language barrier.

How to  “Eliminate” the Border for U.S. Customers

In addition to policy, proximity and a common business environment , Canadian small businesses can gain an additional competitive advantage in U.S markets by eliminating many of the border-related hassles that come with importing goods.

To do this, you’ll need to act as the importer of record (IOR) for U.S. Customs. It may seem a little strange to act as an “importer” when you’re actually exporting goods to the U.S., but acting as both exporter and importer eliminates many border-related challenges for your customers.

Because U.S. consumers often make their buying decisions based on price and convenience, taking on the dual responsibility of exporter and importer means that for your U.S. customers there’s no difference between buying from you or buying from a company down the street.

By acting as the importer of record, you take on the responsibility of declaring your product to U.S. Customs and Border Protection, and by acting as the non-resident importer (NRI) you take care of administrative work at the border so your customers don’t have to. As a result, your products can not only compete on price (thanks to NAFTA), but also on convenience.

Become an Importer of Record: The Requirements

To be an importer of record for U.S. Customs purposes, the importer:

  • May be a resident or a non-resident of the USA
  • Must have detailed knowledge of the goods
  • Must either be the buyer or the seller

The non-resident importer allowance by U.S. Customs and Border Protection offers Canadian businesses equal ground when competing in the U.S. market. For more information on how to import your product under your own account, consult a professional customs broker. They can get you set up on the right path and help eliminate the border for your potential customers.