How to Start an Ecommerce Business in Canada

How to Start an Ecommerce Business in Canada

The world of ecommerce is rapidly evolving, and what’s true today may not be true tomorrow. Still, there are a few things that are certain at this moment. For instance, it’s certain that the worldwide pandemic spurred on unprecedented digital buying habits. It’s also certain that you need to follow some basic steps if you want your ecommerce business in Canada to be successful.

Choose Unique Products

When choosing a product, there are a few things you need to consider.

  • Choose unique products. There are many sites out there selling the same thing as your potential customers. For example, if you sell sunglasses, don’t choose a product that everyone else is already selling because it will be hard for you to get sales and grow your business when all of these other companies are competing against each other for the same customer base.

Instead, try and find something different or unique that isn’t being sold by anyone else yet! For example: if I wanted to start an ecommerce store selling sunglasses in Toronto Canada I could choose from one of two options (a) I could sell glasses similar/possibly identical to those already being sold by competitors (b) I could try my best at finding some unique pair of sunglasses that nobody else has thought of yet! If option B sounds more appealing then keep reading below we will discuss how exactly one should go about doing this

Define your Target Audience

Your target audience is the segment of people who are most likely to want your product or service and, as a result, should notice your advertising campaigns. Age, gender, wealth, location, interests, and a variety of other criteria can all influence who your target market is. 

This one is truly key for your online business. You can have an amazing unique product, but if your try to push the square peg in the circle hole, it probably won’t fit. This means, that if you try to push the wrong product on the wrong group of people, you might just get crickets.

Create an Awesome Online Store

When talking about online shopping, it would make sense that we also talk about setting up an e-commerce site. This is different from a brick-and-mortar store. The customer experience is going to be another main piece that will dictate your success.

First, you need to think of the online platform that you’re going to use. For e-commerce websites, we love to use Shopify. There are other great options as well,

Second, will you build your e-commerce business website on your own? Or, have an expert team set everything up for you?

If you’re looking for help to set up your online store, book a free strategy session with us today and we can go over all of your options!

Develop your Online Marketing Plan

So, we have an awesome product, we know the target audience we want to go after, and our store is ready to rock and roll! So, what’s next?

Well, you need to think about how you will tackle your online marketing. You can do all of these things we’ve talked about, but if no one sees all this hard work, how can they possibly buy from you? Online sales usually are the result of everything coming to worth harmoniously.

Get the attention of customers, and ensure top-level customer satisfaction. Below are some of the ways you can go about doing this.

Here are some marketing strategies you need to consider:

SEO – Make sure Search Engines love your site. While this is an extensive conversation, you want to ensure you get very detailed when explaining the great things your product does, and why your potential customers should buy from you! Content is key here.

Email Marketing – The key to real growth is being able to market to your list of customers, or interested parties. Once a

Affiliate Marketing – Affiliate marketing is the process of earning a commission by promoting the products of another individual or firm. So essentially, you can have other people promoting your business, and products, and all it will cost you is a percentage when an item sells. Very low-risk marketing!

Promote Products on Social Media – There are a few options when it comes to promoting your products on social media. You can post items on Facebook Marketplace, pay for ads, or get influencers to showcase your items on Instagram / Tik Tok / Youtube.

Award-winning customer service – Ok, it doesn’t have to win any awards and isn’t really marketing, but I had to touch upon this. In a world of instant gratification, your customers are going to want quick responses to inquiries. If you leave people hanging, they will leave their wallets hanging as well!

Arrange for Shipping

Canada has certain import rules that you need to be aware of when importing goods from outside the country. Here are the basics:

  • Goods imported from outside Canada can have an import fee added to them. These charges are listed on the Government of Canada website and range from 0% to 15%.
  • The value of your shipment will be determined by customs officials based on its “declared value” as listed on your shipping documentation (i.e., invoice). This amount is not necessarily equal to what you paid for your shipment—it may be higher or lower than that depending on how much risk is associated with it (e.g., high-value shipments like electronics or jewelry have higher declared values than low-value shipments like clothing).

You should also take into account any duties and taxes owed based on that declared value before calculating how much shipping costs will be!

Register your Business

If you haven’t already, register your business with the government. I certainly am not here to give you structural advice, as these are usually better-suited discussions with an accountant, but there are a few options you can look at when starting the registration process.

You will likely be looking at two main options when it comes to business structures, setting up a sole proprietorship, or a corporation. There are pros and cons for both, most of which revolve around taxation (again….talk to an accountant).

When registering your company name and number with the province where it’s located, make sure that it doesn’t violate any trademark laws for existing businesses in Canada. Also, consider whether there are any other companies that have similar names to yours when choosing what name to use. Finally, find out if there are any legal restrictions on how long a business can operate under certain names (e.g., “of Canada”).

Open a company bank account

When you open an ecommerce business in Canada, you will need to open a company bank account. This can be done at a bank in Canada or abroad. The most important thing to note is that your company needs its own account, not an individual’s.

You may even want to consider opening your company’s bank account before you start the registration process (if possible). Otherwise, after registering your business name with the government and getting it approved by Innovation & Skills Development Canada (ISDC), they’ll send over all of their information about how much money was deposited into their account on the day they registered for GST/HST purposes (which goes towards paying taxes). If there’s not enough money in there then ISDC won’t approve them as registered businesses – which means no license or permits for operating either online stores through platforms like Shopify or WooCommerce!

Get a Canadian business number (BN)

A BN is a federal business identifier that you’ll need to conduct commerce in Canada. You can get it from the government website, or through your accountant or lawyer. The cost of obtaining a BN depends on the province you live in and whether or not you’re hiring an accountant:

  • Alberta: Free for everyone
  • British Columbia: C$175 for individuals and sole proprietorships; C$150/year for corporations
  • Manitoba: C$100 for individuals and sole proprietorships; C$500/year for corporations
  • New Brunswick: Free to all businesses with one employee or fewer—this includes non-profits! (Thanks, New Brunswick.)

Business insurance and permits

  • Insurance: You’ll want to get business insurance to protect your company and its assets. This includes coverage for property damage, theft, and liability in case someone gets hurt on your property.
  • Business license: A business license is a permit issued by the government that allows you to conduct business within a particular jurisdiction. Check out this website if you’re curious about what type of licenses are required in Canada’s provinces and territories! http://www.cra-arc.gc.ca/tx/bsnss/tpcs/bwnm-neu/rtrnngg/bdctnsl-eng.html
  • Business number (BN): A BN is an identifier used by Canadian businesses so they can register for GST/HST or payroll deductions, apply for a grant or funding program from the Government of Canada or one of its agencies (like Export Development Canada), submit reports through CRA’s Netfile service, etcetera!

Business liability insurance

Business liability insurance is an important type of coverage for any business. This type of insurance covers the company in the event that someone is hurt or suffers property damage caused by your company. It also provides legal assistance and defense in case you’re sued for negligence.

For example, if a worker at your store trips and breaks their ankle because there was an uneven floor surface, the cost of medical treatment would be covered under business liability insurance. If a customer sues you because they were injured while visiting your store, legal fees associated with fighting that lawsuit could also be covered by this type of policy.

In addition to protecting against liability claims made against you as an individual owner/operator or owner/operator group member(s), it’s important to understand what other types of risks may exist within your industry (e.g., environmental issues).

You may want additional coverage beyond general “all risks” business liability policies like Directors & Officers Liability (D&O) and Employment Practices Liability Insurance (EPLI) which protect businesses from employee-related lawsuits including sexual harassment charges filed by former employees who were terminated for cause without warning; discrimination charges based on gender identity/sexual orientation; wrongful termination claims alleging discrimination based race color religion age national origin disability pregnancy marital status military veteran status genetic information gender identity sexual orientation medical condition

Register with the CRA for GST/HST

If you are a GST/HST registrant, you must charge and remit the GST/HST on most goods and services sold or delivered to customers in Canada.

You may be required to register for the GST/HST if:

  • You supply taxable goods and/or services in Canada that are not zero-rated (for example, basic groceries), or
  • You provide input tax credits relating to your business activities. If you believe that your business is not registered for the GST but should be, please contact us at 1-800-959-5525.

Register to collect PST if you sell goods on your website that are shipped from outside BC, or if you use drop shipping

If you sell goods on your website that are shipped from outside BC, or if you use drop shipping, then it’s likely that you will need to register for the PST.

If you are selling goods and services in Canada, then it is also possible that you’ll need to register for the GST (goods and services tax).

Online Business Success for Canadians

We hope this article has provided you with an overview of the steps you need to take when starting an online e-commerce business in Canada. It can be a daunting task, but if you’re passionate about your product or service and have the determination to succeed, then we wish you all the best of luck!

Social Spike Marketing Group specializes in e-commerce website design and digital marketing for online businesses. Feel free to contact us if you have any questions, or need help getting started!

Book Your Free Strategy Call!


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