Why Are Product Images Essential For Your Amazon Listing?

\n\n\nAs shoppers tend to be more visually stimulated than anything else, what they see influences their purchasing decisions. According to a recent study, 92.6% of shoppers admit that product images heavily influence their purchasing decisions. Shoppers will click if they like what they see, and if they don’t, they will keep scrolling past your advertisement, and you end up missing out on a potential future sale. Undermentioned are some benefits of using High-Quality Product Images in your advertisements:\n

\nIf your photographs are appealing and engaging, it will entice more individuals to click on your listing.\n

\nPeople are more likely to buy from you if you have many images of your goods from various perspectives highlighting all of the qualities.\n

\nQuality photographs inform your customers what they’re purchasing and what they may anticipate from your offering. As a result, your goods will receive fewer bad ratings.\n

Following The Product Images Rules and Guidelines By Amazon:

\n\n\nAmazon’s product listings must meet specific criteria, which include photographs. The same restrictions apply whether you’re selling in the United States, China, or India. The requirements can be divided into two types that are as follows:\n

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1. TIFF (.tif/.tiff), JPEG (.jpeg/.jpg), GIF (.gif), and PNG (.png) are the only file types that are permitted.

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2. Images must be at least 1000 pixels in either height or width to comply with the size and dimensions requirement.

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3. sRGB or CMYK color modes must be used in images.

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4. The product identification (Amazon ASIN, 13-digit ISBN, EAN, JAN, or UPC) must be followed by a period and the appropriate file extension in the following format: product identifier, period, and file extension.

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\nThere are several other requirements that your photographs must fulfil in addition to the technical specifications. If your Amazon Product Photography does not meet all of these criteria, they will be rejected, and you will have to either edit or reshoot them before submitting them again. The following are the requirements for your primary product image, which is the first that users see on the Amazon Search Results Page:\n

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1. No Illustrations Allowed:\nThis may seem self-evident, but the product photo you use must be one. A product drawing or image is not permitted.

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2. There Should Be No Other Objects In The Image:\nOnly show the product in the photo. Other goods should not be included in the photograph since they may mislead consumers and lead them to believe the other objects are included.

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3. Focus And Lighting:\nThis simply relates to the image quality of your photographs. They must be sharp, well-lit, and depict accurate colours. While some tweaking is acceptable, your images must accurately display how your items seem in real life.

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4. The Product Must Fit Into The Frame:\nBooks, music, and video pictures must take up the entire frame. Each item must take up 85 percent of the frame.

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5. The Whole Product Has To Be Viewable:\nThe main picture should include the entire product in the frame. The object should not be cut in any way.

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6. Background Color Should Be White:\nYour photo’s backdrop should be completely white.

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7. There Is No Text Or Graphics:\nThere can’t be any extra text or images in the photo added during the editing process.

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8. Imagery That Isn’t Offensive:\nAny pornographic or offensive photographs will be rejected, as should be obvious.

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\nSome of the requirements for other product photos are more lenient to allow you a bit more flexibility for the Amazon sellers:\n

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1. Other Objects Are Acceptable:\nTo explain how a product is utilised, you might integrate other objects or use models.

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2. Cropped Images:\nTo highlight specific product characteristics, cropped and zoomed-in photos might be used.

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3. Backgrounds:\nOther than white, you may choose any background you like.

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4. Graphics And Text:\nText and images may illustrate various features and applications in these photographs.

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How To Ensure High Quality In Your Product Images?

\n\n\nEven though Amazon requires sellers to adhere to rigorous product image specifications, there are certain strategies that may be employed to attract customers to click on your product advertisement. You can take three main approaches to ensure that your Amazon Product Images are high quality.\n

\nYou could elect to shoot the images yourself if you have a good camera and know how to edit them. However, suppose you have the requisite skills and equipment. In that case, this is the best choice because it gives you complete control over the entire photography process and guarantees that it is done correctly according to your preferences. Here are some pointers to consider if you decide to go this route:\n

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1. Invest In A High-Quality Camera:\nIn a pinch, most camera phones and tablets shoot adequate images in a pinch and will suffice. If you’re serious about shooting great photos, though, you should invest in an excellent DSLR camera.

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2. Lighting Strategy:\nWhen photographing a product, make sure it is well lighted. A lightbox is suitable for smaller objects because it eliminates shadows. However, you’ll need to utilise lighting for bigger items. Finally, if all else fails, you may shoot outside on a bright sunny day.

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3. Take A Variety Of Photographs:\nYou’ll need images from a variety of perspectives. Furthermore, it’s usually a good idea to take as many photos as possible to guarantee that you capture some decent shots and don’t have to repeat the procedure.

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4. A White Background:\nYou’ll need a completely white backdrop for your primary image. However, even if you choose a white backdrop, you won’t have a completely white background. Therefore you’ll need to edit it in with a tool like Photoshop.

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5. Image Framing:\nKeep in mind that your image must fill 85% of the frame. As a result, either zoom in or crop it throughout the editing phase.

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6. Photography Editing:\nTo improve things like colour and exposure, use editing software. Don’t over-edit it to the point that the image seems surreal. The idea should be to bring out as many colours as possible while presenting your goods in the best light possible.

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\nIf you’re purchasing pre-existing things from a manufacturer or supplier, you’ll most certainly find photographs to utilise. However, that does not imply that the pictures will be of high quality. Manufacturers and suppliers aren’t usually the best marketers, so the photographs you receive might not meet your expectations.\n\nIt’s also conceivable that, while the photos are good, they don’t fit Amazon’s standards, so double-check before utilising them. If they have images, it’s worth asking for them, but if you’re not pleased with what they provide you, don’t be afraid to recreate them yourself.\n

\nIf you’re not sure about your photographic talents, it’s probably advisable to employ a specialist with experience in Product Photography and Digital Marketing. It may cost you a bit more money, but it will be well worth it if you obtain some fantastic images that help you sell your stuff. Just be sure to offer the photographer specific details regarding your needs. You don’t want to waste money on photos that you won’t utilise.\n

How To Upload Your Product Images And Get Approval From Amazon?

\n\n\nOnce you’ve finished taking images, post them to Amazon so that they may be used in your listing. You’ll be requested to add your photographs when creating a new listing. For each product, you’ll be allowed to upload a total of nine images. Follow these procedures if you want to add new photographs to an existing listing:\n

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1. Go to your Seller Central account and sign in.

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2. In the Inventory menu, select ‘Manage Inventory.’

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3. Next, locate the product to which you wish to add additional photos.

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4. From the drop-down option, choose ‘Manage Images.’

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5. Select Add Images from the drop-down menu.

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6. Choose the picture slot to which you want to post your image. You have the option of selecting an empty space or replacing an existing photo.

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7. Select ‘Browse File’ from the drop-down menu.

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8. Locate and choose the image you wish to upload.

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9. Select Upload Images from the drop-down menu.

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10. If your images fit Amazon’s criteria, they should be accepted in a matter of hours.

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\n\n\nAmazon Product Photography is a vital part of marketing your products on Amazon, and it should not be taken for granted. Businesses that understand its importance have started to enhance their product images and boost sales. Therefore, it is advisable to employ the services of an accomplished Product Photographer or a team of Digital Marketing Experts to help you navigate the roads to success in the Amazon Marketplace.”}]}],”section_settings”:””},”section_pfgI4″:{“component”:”hc_section”,”id”:”section_pfgI4″,”section_width”:””,”animation”:””,”animation_time”:””,”timeline_animation”:””,”timeline_delay”:””,”timeline_order”:””,”vertical_row”:””,”box_middle”:””,”css_classes”:””,”custom_css_classes”:”fulfillment_easy_section”,”custom_css_styles”:””,”section_content”:[{“component”:”hc_column”,”id”:”column_PQmfc”,”column_width”:”col-md-12″,”animation”:””,”animation_time”:””,”timeline_animation”:””,”timeline_delay”:””,”timeline_order”:””,”css_classes”:””,”custom_css_classes”:””,”custom_css_styles”:””,”main_content”:[]}],”section_settings”:””},”scripts”:{},”css”:{},”css_page”:””,”template_setting”:{“settings”:{“id”:”settings”}},”template_setting_top”:{},”page_setting”:{“settings”:[“lock-mode-off”]},”post_type_setting”:{“settings”:{“image”:”https://shiphype.com/wp-content/uploads/2022/01/How-to-Sell-More-Products-with-Amazon-Product-Photography_shiphype.png|314|706|999993768″,”excerpt”:”Product photography is a crucial aspect of online marketing of products on Amazon. Businesses have to follow specific technical guidelines.”,”extra_1″:””,”extra_2″:””,”icon”:{“icon”:””,”icon_style”:””,”icon_image”:””}}}}

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How do Amazon FBA Valuations Work?

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\n\nObtaining a business valuation is just the starting point of the sales process for Amazon FBA owners looking to make a profitable exit. Even if you are not ready to list your FBA business for sale anytime soon, you should at least consider getting a valuation done to give you an idea of how far your business currently is from your exit goals. \n\nWe recommend that all Amazon FBA owners determine the value of their business once they have built up a year of profitability, and at regular intervals thereafter. This will help you keep an impartial valuation of where your business is now in relation to similar assets currently on the market.\n\nUnderstanding how valuations are calculated will also help you improve your business. The general valuation formula we use is as follows: \n\nsales price = monthly net profit × multiple + discounted assets (if any) + wholesale inventory (if any). \n\nNet profits are determined by taking the revenue from a period of six to 12 months and subtracting any costs (costs of goods, marketing spend, trademarks, hosting, etc.). If your business is seasonal, we’ll try to use a 12-month average to account for this. If your business is showing signs of recent growth or decline, we will use a shorter pricing period to reflect this more accurately. \n

\nYour Amazon FBA multiple will be dependent on a few different factors. These include your FBA business’s 1) age, 2) social media following, 3) number of email subscribers, and 4) traffic diversity. \n\nYour multiple is what the net profit will be multiplied against to determine the actual price of your business. Some brokers will use yearly multiples, like a 2x or a 3x, with the same multiple in monthly terms being 24x or 36x.\n\nBecause some Amazon FBA businesses have not been around long enough to accurately reflect their average earnings over a year, they will often use a monthly multiple. The longer your FBA business has been around, the better your multiple will be. The reason for this is that older businesses can use averages calculated over a longer period (usually a 12-month average) and have more data to support their stability, which is a huge factor in increasing their multiples. \n\nClearly, the time your business has been around and the amount of net profits you earn are vital to increasing your valuation, but what else can you do to increase your multiple?\n

1. Use a Third Party for Quality Control

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\n\nWhen you are planning to sell your FBA business, the first thing you should be looking at is how to minimize the workload the new owner will have to take over. Many Amazon FBA sellers actually have their products sent to them personally to be packed before they are sent off to their desired fulfillment warehouse. \n\nThis is a huge red flag for someone who wants to get that six-figure exit.\n\nSure, having someone else do quality control for you is an added expense, but someone looking to buy an Amazon FBA business is not interested in sitting in their garage all day packaging products. FBA buyers are looking for an asset they can grow—one that typically requires minimal sweat equity on their part. \n\nAs the workforce continues to become more remote, a potential buyer might not even have a home to work out of, let alone a dedicated garage to store product inventory. These buyers might be digital nomads working from a coworking space in a new country every other month. In this case, packaging all their own products for a newly acquired Amazon FBA business is definitely out of the question. If you are doing this task on your own, consider sourcing help from a 3PL service provider to ease the transition to the new owner. Having a service, like a fulfilment center, setup prior to listing your business for sale not only gives you added quality control over trusting Amazon alone, but it will also help you demand a higher multiple and therefore ensure that systems are in place for a new owner no matter where they might be in the world. \n

2. Diversify your Products

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\n\nIf you’ve been selling on Amazon for some time now and only have one product, SKU, you may want to consider adding more to your product line. Having only one product with one main supplier that only sells in one market is not exactly something investors are going to be gunning for. Instead, try to diversify your product line with multiple SKUs, each of them with multiple suppliers. These suppliers should be used to help manage your growth and allow you to expand into markets outside of the US.\n\nSetting up multiple products and selling in different markets will ensure that the business will be stable and that your asset will remain steady should an issue arise. Amazon FBA buyers are usually looking for a business with multiple products—products that can be diversified with variations in size and color. Having this product diversification will not only keep you from placing all of your eggs in one basket, but it will also be a huge selling point in getting you closer to that six-figure exit when the time comes to list the business.\n

3. Create a Brand

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\n\nWell, yes and no. Building a brand for a group of related SKUs isn’t a bad idea, and many FBA owners have had great success in doing so. The benefit of establishing a brand for your products is that you can create your own website, build an email list that you can then monetize, and so much more. Creating a brand for your products will also help you set yourself apart from other vendors who might be selling a similar product within your niche. \n\nOne thing you should pay close attention to is how much effort will be needed to establish a trademark and brand for your products. For instance, if your products happen to be in the medical field, you may have a much harder time establishing a brand; therefore, your brainpower might be better spent on researching new SKUs to add to your growing list of products. \n\nSure, the extra safety gained through creating an umbrella brand for your products does make your business more valuable, but remember: This will be a more long-term goal for most. When you branch out into other channels away from Amazon’s platform, you should be prepared to take on more marketing, advertising, and general business tasks doing so. For immediate results, focus on researching more products to add to your Amazon listings. When looking to make that six-figure exit down the road, establishing a business brand will set you apart from the competition and give buyers something more than just an easy-to-duplicate list of products.\n

4. Document your SOPs and Train your Team Members

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\n\nThis is one of the biggest factors that can help you reach your business goals and acquire the most from your Amazon FBA asset when you exit. Aside from the obvious figures of revenue and business age, SOPs and trained team members should document every task required to manage your FBA business. You should document these processes to the point that if you were to hire someone with zero experience, they could easily come in and perform the same operations with little supervision. Think of this process as building an engine with a series of cogs and belts that need to be in full working order to make the engine run. \n\nDocumenting all your standard operating procedures is your way of creating the manual for how your engine should run. Once created, anyone can come in and make the engine run smoothly and efficiently.\n\nAnother factor to getting closer to the six-figure exit goal is having one—or a team—of employees or contractors who can work on your business to keep your time spent on the asset to a minimum. Like using a 3PL service to handle packaging and shipping operations, your trained team of VAs or outsourced help is an added bonus to a buyer who knows they will not be the one physically managing and running every aspect of the business. \n\nBuyers will usually want to keep any trained VAs or employees you have to expand the business further. This is much more difficult when you as the seller perform these tasks all on your own. A trained VA or employee is very valuable to a buyer, especially one who wants to offload business operations to focus more on scaling the business. \n

So When is the Selling Season?

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\n\nYou may now be wondering about seasonality, because let’s face it—almost every Amazon FBA business has a large boost in sales during the holiday season. This fact might have you undecided as to whether you should sell your Amazon FBA business now or wait until after the holiday season to gain all that positive revenue data. \n\nWell, the answer you are seeking really depends on your business goals.\n\nFor seasonal businesses, the earnings will need to be documented over a longer period to gain a better perspective on the overall revenue both before and during the holiday season. As a result, you may not impact your multiple much waiting it out and selling after the busy holiday season. On one hand, if your business is still relatively new, you may want to wait until after the holidays to show potential buyers what your income numbers are capable of. On the other hand, selling before the busy season can be used as a negotiation strategy from a sales perspective.\n\nThe new buyers will want to make the deal happen sooner rather than later, knowing that they can benefit from the holiday uptick in revenue right out of the gate without having to wait around during the “normal” months for this season to come around. Listing your Amazon FBA business for sale before the holiday can lead to a deal being made more quickly due to the time pressure on the buyer. \n\nThere are plenty of reasons why someone would want to sell their Amazon FBA business (for example, one couple sold their business on our marketplace to fund their retirement). The reasons detailed in the post are motivating most sellers to find a profitable exit for themselves. \n\nSelling your Amazon FBA business can be a rewarding payday—in fact, for most, it will be the largest capital gain they ever receive in their lifetime. \n\nWhether this is your first digital asset or you happen to be a sequential entrepreneur with a portfolio full of online assets already, you can see what your business is worth today compared to similar businesses in our marketplace. Having an idea where your FBA business stands on the market using our valuation tool will give you the insight you need to improve one aspect of your business or another. Updating your FBA business model using the tips we have covered in this post will not only help you increase your net profits, but it will also give you the upper hand in optimizing your business to reach that six-figure exit goal faster.“}]}],”section_settings”:””},”scripts”:{},”css”:{},”css_page”:””,”template_setting”:{“settings”:{“id”:”settings”}},”template_setting_top”:{},”page_setting”:{“settings”:[“lock-mode-off”]},”post_type_setting”:{“settings”:{“image”:”https://shiphype.com/wp-content/uploads/2020/12/Four-tips-for-preparing-your-Amazon-FBA-business-for-a-six-figure-exit-_shiphype.png|314|706|999993772″,”excerpt”:”In 2019, FBA businesses sold for an average of $279,253. Here are 4 tips to help you maximize your sales premium when it’s time to exit your business.”,”extra_1″:””,”extra_2″:””,”icon”:{“icon”:””,”icon_style”:””,”icon_image”:””}}}}

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When is a Good Time to Hire a Fulfillment Center?

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\n\nWhen it comes to running your business, you’ve got a lot on your plate. Sometimes, minutia can get in the way of more pressing issues, leaving you to juggle too many things at once. Thankfully, there are ways to simplify your business and allow you to put the focus back on things that are truly important. One of those solutions? Hiring a fulfillment center for your business’s fulfillment needs. But how do you know when it’s the right time to hire a fulfillment center, and what are the benefits of making this move? Here are some facts to consider when considering outsourcing your fulfillment operations.\n

Do You Need a Fulfillment Center?

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\n\nThe first question you should ask yourself when considering hiring a fulfillment center is ‘do I need a fulfillment center?’ Fulfillment centers are more than just warehouses. They offer many services that you may not even realize – services that can help take a lot of stress off your shoulders.\n\nJust a few of the services you can elect at a fulfillment center include everything from storage to picking, packing, and shipping your merchandise. These services enable you to free up valuable space at your own physical location and leave the work of shipping your merchandise in capable hands, eliminating the need for extra staff to handle these functions. Furthermore, many fulfillment centers can offer specialized services such as customer service and returns, so someone is always there to assist your customers.\n\nSo, how do you know if you need a fulfillment center? If you find yourself handling fulfillment needs when you should be handling other responsibilities, you may benefit from outsourcing your fulfillment to a fulfillment center rather than performing these tasks in-house.\n

Advantages of a Fulfillment Center

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\n\nThere are many advantages of outsourcing your operations to a fulfillment center. For example, warehousing your merchandise in a fulfillment center can free up valuable space that may be needed for other functions of your business. In addition to storage, fulfillment centers can offer dedicated staff to handle your fulfillment operations, eliminating the need for you to hire and train extra workers.\n\nAnother advantage to using a fulfillment center is the negotiation of lower shipping rates. Because fulfillment centers ship at such a high volume, they are able to acquire lower shipping rates and can pass those savings on to you. They can also handle the details of customs and other shipping fees so you don’t have to.\n\nFulfillment centers also offer picking and packing services, with highly trained staff who will pack your goods and provide your customers with a professional presentation when they receive their merchandise. Because they are shipping professionals, fulfillment center workers can package goods in such a way that reduces damage and keeps shipping material costs low.\n

Costs Associated with Fulfillment Centers

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\n\nAnother factor to consider when choosing a fulfillment center is the cost associated with such services. Here are a few fulfillment fees you should factor into your budget when considering switching to a fulfillment center.\n

Setup Fees

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\n\nWhen you first sign on to a fulfillment center, you can expect to pay a setup fee to begin services. Though the actual fees vary from center to center, estimates range between the hundreds to thousands of dollars, depending on the size of the fulfillment center and of your account. Smaller centers tend to charge lower fees, while larger generally fall on the opposite end of the spectrum. Generally, the highest cost associated with setup fees is the fee to connect your website’s online shopping cart to the fulfillment center. This may require the expertise of an IT professional who may need to be outsourced if your fulfillment center does not have this type of worker on staff.\n

Intake Fees

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\n\nIntake fees are the fees your fulfillment center will charge to accept orders from your supplier. This fee covers everything from receiving your inventory to unloading, organizing, inventorying, and cataloging and storing your merchandise at their facility. Most fulfillment centers charge intake fees either by the hour, per SKU, per order, per pallet, or per box depending on your arrangement with the fulfillment center.\n

Storage Fees

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\n\nAnother fee you will incur at a fulfillment center is a storage fee. This is for the physical space your merchandise takes up in the warehouse. You can store inventory by pallet, cubic foot, or bin, depending on what you are storing, and prices will vary depending on which option you choose. Storage prices are influenced by location, product volume, and any special warehousing requirements that may be needed to store your merchandise, such as refrigeration. Fees are assessed each month so if your inventory changes, your rate may be different from month to month.\n

Pick and Pack Fees

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\n\nPick and pack fees are the fees associated with locating the inventory to be shipped and packing it to be shipped. This may also include packaging materials to ship your merchandise, but some fulfillment centers charge extra for packaging, so be sure to ask when receiving your estimate. \n\nA pick and pack fee may also vary depending on how much merchandise is included in a package, and if you need other materials such as free samples or coupons added to the package.\n

Shipping Fees

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\n\nThe next fees you will incur are shipping charges. These are the charges the fulfillment center passes on to you for actually shipping your merchandise. Here you have the option of providing your own shipper or using the fulfillment center’s shipper. Often you can get lower rates through the fulfillment center, but you give up some of the control you would have when using your own shipper with this option. Be careful here, as you could still incur fees from the warehouse for using your own shipper.\n

Kitting and Return Fees

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\n\nKitting and return fees are the fees charged by your fulfillment center to either assemble shipments or process returns and handle customer service for these returns. Kitting fees are generally charged hourly depending on the complexity of assembly and the fulfillment center itself. Return fees include return shipping, inspection for damage, and returning items to inventory if resaleable.\n

Account Fees

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\n\nAccount management fees are assessed to your account for management and customer service services. They are generally accrued on a monthly basis in the form of a flat rate that will vary from center to center.\n

The Bottom Line

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\n\nOutsourcing your fulfillment can be a great solution for your business, saving you valuable time and money with the right fulfillment partner. “}]}],”section_settings”:””},”scripts”:{},”css”:{},”css_page”:””,”template_setting”:{“settings”:{“id”:”settings”}},”template_setting_top”:{},”page_setting”:{“settings”:[“lock-mode-off”]},”post_type_setting”:{“settings”:{“image”:”https://shiphype.com/wp-content/uploads/2020/11/When-is-a-good-time-to-hire-a-fulfillment-center_shiphype.png|314|706|999993776″,”excerpt”:”As your business grows, the need to hire a fulfillment center becomes apparent. It happens almost organically but there’s some key indicators as well.”,”extra_1″:””,”extra_2″:””,”icon”:{“icon”:””,”icon_style”:””,”icon_image”:””}}}}

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Why is it so hard to find warehouse space?

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\n\nOnce your order volume picks up and you’ve decided that you’re going to be fulfilling your own orders, it’s time to find warehouse space. \n\nSearching for a warehouse can be extremely time consuming and difficult. Almost always, it’s a landlord’s market. Even when the economy is doing poorly, industrial spaces are hard to find. \n\nBig reason is because lease terms are generally 3-5 years plus and spaces aren’t being built as fast as the demand is growing. Even in times like COVID, where retail businesses are hurting, online businesses are still booming. Most online businesses use industrial space. Besides this, industrial spaces are taken up by B2B operations that supply other businesses.\n

How to find the ideal warehouse space?

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\n\nJust because it’s hard doesn’t mean it’s impossible. There’s still a lot of options available on the market. I’ll keep it real with you. It’s very likely that you won’t find space that ticks all your boxes but if you make some adjustments, you will eventually land on something that fits. Keep this in mind as you go through the process so you don’t dismiss good options. There’s a lot of things to look for when finding the right space so let’s get started.\n

Before You Get Started: Credit Consideration

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\n\nOne of the benefits of running an eCommerce business is that your operation is neat and quiet compared to the other businesses out there (e.g. woodwork, auto shops etc). Landlords like this a lot. They also like the fact that there’s minimal foot traffic coming to the business (most eCommerce businesses usually just have their staff or business partners coming to the building). This makes satisfying the landlord easier and puts you ahead of other potential tenants.\n\nBesides being satisfied with the type of business, the landlord also wants to make sure you’re able to afford the space. They want to be protected because they spend a lot of money finding a tenant and finalizing the deal. \n\nIf your rent is $5,000 per month and your lease is for 5 years, you’re expected to pay the landlord ~$300,000 over the course of 60 months. It’s tough to convince the landlord that you can afford this, especially when you’re a new business but it’s not impossible.\n\nIt’s extremely important you ensure you’re in a position to be able to afford this kind of commitment and also to prove your creditworthiness.\n\nIf your business is an existing business, you probably have leasing history, financial statements and bank statements to show you’re in good financial standing. If there is no business history, they will look at your credit score.\n\nIf they’re not happy with your credit either, don’t worry. There’s still ways to combat this:\n

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1. Tell them you’ll provide a personal guarantee and are willing to be a co-signer on the lease.

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2. If your situation allows, offer a higher security deposit.

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3. Get a 2nd person to be a cosigner.

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4. Provide dated checks/cheques upfront.

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5. Show that you have capital ready.

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\nWorst case scenario, you’ll be able to find a landlord that’s charging more than others.\n

Space Size

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\n\nI put this in the beginning because this is where you’ll start. Based on how big your items are, how many unique SKUs you carry, and the quantity you keep in stock of each, you must figure out how much space you need. Once you’ve figured out how much square footage you need, you can begin your search.\n\nI recommend keeping your range close to what you want. Once you’ve exhausted all availability, only then extend your range.\n

Location

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\n\nThe 3 rules of real estate. Location. Location. Location. You need to really consider location for so many reasons but I’ll share my top ones:\n\nYou want to make sure the location is close to where you live. If your warehouse is an hour away (which is normal) vs 15 minutes away (which is ideal), you save 1.5 hours in commute time per day. This adds up. If you’re like me who goes to the warehouse every single day, that’s an easy 500+ hours saved per year. What’s 500 hours worth to you? You decide.\n\nBesides yourself, you also want to make sure the workplace is close to your staff. They are probably commuting from different areas and taking different modes of transportation to get to you. I think places that are close to major highways and close to the transit system are the best. This way people who drive can get there fast and it’s also accessible for those that take the bus/train.\n\nSafety is also a big consideration. It’s important to ensure you’re looking for space in an area with low crime rates. Sometimes you’ll find cheaper prices in areas with high crime rates but is that worth giving up your peace of mind? You decide, but I think it’s worth spending the extra change. This is important for both your safety, your people’s safety and the safety of your products.\n

Layout / Partition / Building Features

\n\n

\n\nEven though you’re on the hunt for warehouse space, you will need a certain amount of office space as well. Most warehouses come with office space(5-20% is standard). Inside the building, there might be other partitions done based on the needs of the previous tenant.\n\nThis part is where business owners dismiss their options which is a big problem. Try not to look at the warehouse in its current state. If the current layout/partition doesn’t fill your needs, you can always get changes done. With any changes, you’ll have to make sure it’s okay with the landlord first whether it’s inside or outside. I agree that it’s not free to make changes but I’m just advising to keep an open mind. \n\nYour shipping, receiving, packing, storage processes all will require assignment of space. The best starting place for this is based on the outer perimeter of the space. Based on where the shipping and receiving doors are located, the placement of the rest of your operations will fit accordingly. The most common shapes are U-shaped, L-shaped or even I-Shaped. If you have the luxury of picking between these, consider which would allow for the most efficient and streamlined operation. \n\nOverall, I think the shape isn’t a make or break for most businesses.\n

Rent Rate

\n\n

\n\nRent rate is obviously important but I’ve noticed that prices are pretty similar across the board. Even when comparing really small spaces and really big places, the difference in price per square foot is insignificant. Generally, you’ll be paying within market rate This is a good thing because it means that even when you’re paying a higher rate, you’re not too far off the median rate.\n\nMost landlords don’t like to lower their rate. Instead of negotiating the rate, you should try and get a couple of free months from them. \n\nTip: It’s pretty common to get 3 months free with 5 years and 7 months free with 10 years.\n

What’s included and what’s extra?

\n\n

\n\nIn your gross rate, there’s also going to be a component called “CAM” fees. This stands for Common Area Maintenance. It covers the overhead costs associated with the maintenance of the common area of the building. \n\nIn certain deals, it also includes some utilities as well. For most industrial leases, only water is included. Each deal is different and it could be that nothing is included and it’s also possible that other utilities such as Heating, Electricity etc are included as well.\n\nIt’s very possible that something like garbage isn’t included. \n\nMajor: You want to make sure that heating or AC is available in the space you’re getting. Heating is pretty standard but AC is a rare luxury.\n\nWhat’s important here is you want to make sure you’re in the know of what’s included and what’s not. This will help determine what additional costs you’ll be incurring each month and help calculate your true cost.\n

Lease Terms

\n\n

\n\nMost lease terms will be 5 years or longer. It’s not uncommon to see 3 year terms but it’s extremely rare to see 1 year. Shorter terms are more common in cases where the space is being subleased (there’s a section for this later).\n\nGenerally, I think a shorter lease term is better (when it’s not a sublease). It’s in your best interest. Who knows what stage your business is going to be in a few years or even a year from now on. With shorter terms, you have the flexibility to upgrade, downgrade or relocate for any other reason.\n\nWith longer lerms, you give up the flexibility. The commitment is also bigger. The landlord will always try to get you locked in for longer terms. If you’re sure you’re going to need the space for a couple of years, agreeing to longer terms than other offers also give you the ability to use that as a negotiating tool. \n

Lease vs Sublease

\n\n

\n\nSome places are for lease and others are for sublease. In subleasing, there is somebody who is already tenating from the landlord. They either no longer have use for the space or have a section which they don’t use.\n\nThe issue here is that you’re not the primary lease holder and you don’t have the same level of control with things. You might also have to share certain spaces inside the building which might not be an option for your business either.\n\nThere are situations where subleases make sense but I recommend staying away if possible. \n

How soon is it available?

\n\n

\n\nMost properties on the market are available immediately or on short notice. This is ideal because once you find something you like, you can make an offer and move forward.\n\nSome landlords start searching for new tenants before their current tenant’s lease expires. They do this so they don’t miss out on rent while the property sits idle. This can be really good if your need isn’t immediate. Asides from the ability to evaluate all options properly, it also gives you additional planning time.\n

Parking

\n\n

\n\nSome landlords will assign parking spaces and others will just have unreserved space where anyone can park. The area the warehouse is in will ultimately determine how many spots you get. It’s not uncommon that there might be situations where there aren’t enough parking spots and staff will have to park nearby. In really heavily populated areas, it’s also possible that parking is paid. \n\nIn all cases, make sure sure you’re fully aware of the parking situation and are in agreement before signing for the warehouse.\n

Proximity to Post Office/Shipping Carriers

\n\n

\n\nWe talked about location already but here’s a bonus one.\n\nThere’s going to be times where you schedule pickups but the carrier doesn’t show up. There’s also going to be times where you create orders after the carrier has already picked up. When this happens, you’re going to need to drop off the orders to the carrier or the post office. \n\nIf the closest carrier is more than 15 minutes from your location, I think it’s a problem. Ideally, you want your warehouse to be located close to the post office or the carriers you use the most.\n

Signage

\n\n

\n\nI think this doesn’t apply to most businesses that are looking for an industrial spot but if it’s important to you, make sure you discuss it upfront. Signage placement is not just up to the landlord but also the condo board of your municipality as well. \n\nYou can expect to have to pay additional for signage abilities.\n

Noise/Neighbors

\n\n

\n\nThis is a tricky one. It could be that there’s no loud noise when you visit the place but it doesn’t mean it’s like that for the whole day. The best way to gauge this is by figuring out who your neighbors are. If they have operations that include automobile repair, wood work, welding or anything else that requires operating machinery, there will be noise. This can be extremely annoying and it’s something you can’t do much about. \n\nIf you’re an eCommerce business, I recommend finding a business plaza where other businesses have operations similar to yours.\n

\n\n

\n\nWhen I first moved to America, I went through hell to find warehouse space. In 30 days, I looked at over 120 spaces all over LA County and Orange County in California. I made reasonable offers for ~40 different spaces.\n\n Imagine this scenario:\n

\n \t
• No Credit History (I had just got a Social Security Number)

\n \t

• Newly Registered Business

\n \t

• I knew 0 people in the entire state of California (nobody could be a cosigner)

\n

\nConsidering this, landlords weren’t willing to entertain my offers. Why should they when they have so many other businesses trying to lease from them with established businesses and credit history?\n\nUltimately, I had to settle for a spot in Wilmington, California, which wasn’t the best:\n

\n \t
• High crime area

\n \t

• Loud Noise (neighbors doing wood work on 1 side and welding on the other)

\n \t

• High rates

\n \t

• Double the security deposit

\n

\nThe odds were against me, but I made it work. I literally got the worst deal possible but I was happy I had space to work from. It wasn’t my first time looking for space so it wasn’t that I lacked experience, I just wasn’t in the best position to get everything I wanted.\n\nIf you’ve found a space that checks all your boxes, consider it a blessing. The truth is that it’s rare to find everything you need in 1 warehouse. Focus on what’s important and make adjustments as required. There’s just not that many options available and the competition is high. Based on your situation and budget, this can become harder or easier. Ultimately, you’ll have to make some sacrifices to make it work. You’re a business owner and you’re already challenging yourself on a daily basis. Consider finding a warehouse a mini challenge. Don’t stress it too much and enjoy the ride. Cheers!“}]}],”section_settings”:””},”scripts”:{},”css”:{},”css_page”:””,”template_setting”:{“settings”:{“id”:”settings”}},”template_setting_top”:{},”page_setting”:{“settings”:[“lock-mode-off”]},”post_type_setting”:{“settings”:{“image”:”https://shiphype.com/wp-content/uploads/2020/08/Finding-Warehouse-Space-for-Lease-eCommerce-Fulfillment-Checklist_shiphype.png|314|706|999993788″,”excerpt”:”Finding warehouse space for yourself can be difficult. It can also be really fun. Either way, it’s a big commitment.”,”extra_1″:””,”extra_2″:””,”icon”:{“icon”:””,”icon_style”:””,”icon_image”:””}}}}

The post Finding Warehouse Space for Lease: eCommerce Fulfillment Checklist appeared first on SHIPHYPE Fullfillment.

Why is it important to have a good supplier for shipping supplies?

\n\n

\n\nThere’s tons of suppliers in the market which is both a good thing and a bad thing. It’s great because you can always find someone else if you’re not satisfied with your current supplier. The bad news is that it becomes hard to navigate through so many suppliers to find the best ones. You may just end up going with the first few you find instead of finding the ones that can save you money.\n\nAt one point, I was purchasing bubble wrap rolls from a supplier at $80/roll. I used this supplier for about a year. I was happy with the price but a year later I found a supplier that could provide me the same rolls at $30/roll. Mind you, $80 was the standard price across most suppliers but I just happened to dig deep enough and secure some good pricing.\n\nIf I had known about the $30/roll supplier a year earlier, I could have potentially saved around $1,300 on bubble wrap alone.\n\nSome of the most common items needed for shipping & packaging include:\n

\n \t
1. Corrugated Boxes

\n \t

2. Tape

\n \t

3. Dunnage (Bubble wrap etc)

\n \t

4. Box Cutter

\n

\nI’ve identified some great sources for shipping supplies. I’m separating sections for businesses and individuals because most bulk suppliers will require a business account. They also have MOQs (minimum order quantity) in place meaning they will only sell large quantities.\n\nP.S. We’re not being paid/compensated by any of these sources in any way. I just want to share the best information for those looking. See our top picks below:\n

Where to buy Shipping Supplies: For Businesses

\n\n

\n\nAs an eCommerce business that ships orders to their customers, you probably go through a lot of shipping supplies. It’s a recurring expense and one that’s probably never going to go away unless you’re outsourcing fulfillment.\n\nBecause it’s a recurring expense, it’s important to have a reliable supplier that can provide items at affordable prices. It’s important to spend time finding a supplier and it’s better if you do this early on. Even small differences in pricing can add up over time and make an impact on the bottom line. Nobody likes to go hunting for suppliers once their business is already established and they have other things to worry about.\n

\nI have to mention Uline first because they are the all in one stop for all businesses. Even if you’re not an eCommerce business, they probably stock all your industrial needs. Uline is extremely popular and rightfully so because they sell high quality products with superior customer service. They are a multinational company with operations across the globe. In Canada alone, they stock over 37,500 unique products.\n\nThey supply all shipping supplies that a business can need.\n\nThis is a banner image taken directly from their website with an overview of all the categories they specialize in. Items range from storage to shipping to cleaning supplies and so many other items that are hard to think of.\n\nI’ve noticed that sometimes their prices are higher than other suppliers but that’s the price you pay for convenience.\n\nOnce you’ve set up a business account with them, they bill you on invoice level. What this means is that you don’t have to pay right away as they extend generous payment terms.\n

\nUline has a section called “Green Products” which consist of “Environmentally-Friendly Products”. This category has many subcategories such as : Retail Bags, Industrial Bags, Janitorial Items, Facilities Maintenance, Cushioning and even Packing List Envelopes.\n\nThe coolest “Green” item I found on their website are these Recycled Hexagon Picnic Tables. Lol.\n\nYes, I know this item doesn’t have anything to do with shipping supplies but everyone needs a break from shipping. (:\n

\nGlobal Industrial is very similar to uline. They are in-fact each other’s largest competitors. They carry similar products but uline definitely has a bigger range of products. I’m keeping this section short because I don’t want to repeat everything I mentioned earlier. They really are very similar.\n\nI’ve noticed that Global Industrial has better prices for most items but prices do change and it’s never a bad idea to compare before actually purchasing. Whenever I’m in the market for a product, I always use Global Industrial as a benchmark to ensure the price I’m paying is within range.\n

\nThis is one of my favourite sources for buying supplies. The website is extremely simple making it easy to browse and find exactly what you’re looking for. One of the best parts about this is they have a category called eCommerce Suppliers where you can literally find everything you’re looking for including:\n

\n \t
1. Boxes

\n \t

2. Tape

\n \t

3. Mailing Tubes

\n \t

4. Bubble Wrap

\n \t

5. Air Pillow

\n \t

6. Shipping Mailers

\n \t

7. Labels & Label Printers

\n

\nOne of the coolest items they have is “Bubble in a Box” which is literally a bubble roll put inside a box. Bubble bag usually takes up a lot of space considering you need to also find something to hold it in place and this does the job. See this picture below:\n\nThis can easily be fitted anywhere at your warehouse. The bubble bag is perforated at 12” making it easy to cut without needing a blade or cutting scissors.\n\nThey offer Free Next Day Delivery for orders over $500 in the GTA and neighbouring cities. They sell custom boxes as well and ball-park pricing is available on the website.\n

\nThis is a great option if you’re looking for custom shipping supplies. You can provide them with a drawing and dimensions of what you want your package to look like and they’ll do the job to perfection. A lot of subscription box businesses use them because they provide great service and a fast turnaround time.\n\nBtw, they also sell non-custom supplies. They have a section called “Best Sellers” and you can find all the supplies you need in that section. I’ve never used them but I know of a lot of business owners that do. I did a quick Google search and noticed they have a 4.6 star rating between 260 ratings. I think that’s pretty solid.\n

\nThis one isn’t an all in on source but is the best option if you’re purchasing Kraft or Bubble mailers. They also sell thermal label printers but the pricing is expensive for those. They have 2 eCommerce websites with different pricing based on where you’re located in Canada. See below:\n

\nhttps://mailersforless.myshopify.com/\n

\nhttps://www.chitchatsatlantic.com/\n\nI do think they’re worth checking out.\n

Where to buy Shipping Supplies: For Individuals

\n\n

\n\nI’m going to keep this short and sweet. If you’re an individual looking to buy packing supplies to send a package, you have a lot of options. Let’s talk about the different places you can get them.\n

\nI think Home Depot is one of the best places to get supplies. They have a great range of boxes as well as heavy duty boxes. The prices are really good. Besides boxes, you can also find packing material here such as tape, bubble wrap etc. Home Depots are located all across Canada and there’s probably one close to you.\n

\nEveryone knows about Staples. They’re great because they’re everywhere but I think Staples is on the more expensive side. One of the upsides is that they have cut-out boxes available specifically designed to ship certain items. Some of these cut-out options include boxes for tablets or cell phones and even packaging for fragile items.\n

\nThis is my top pick for individuals. I’ll tell you why. Canada Post carries a lot of stuff. Whether you want to ship out an envelope or a microwave, you can find a box that fits. Just like Staples, they also have custom fit boxes.\n\nCanada Post is convenient. If you’re going to Home Depot or Staples, you might have to ask around to find things and then go through aisles to locate them. That’s not a problem at Canada Post as you can see everything at the same time. You can even browse as you stand in line.\n\nThe best part is that you can package your items right there and have the post office ship the item for you too.\n

\nJust like Canada Post, UPS/FedEx/Purolator stores all deserve a spot at the top as they share the same benefits. I still put Canada Post above them because Canada Post has more options for Canadians. Most Canadians are also already familiar with Canada Post and as an individual are more likely to go there first for their shipping needs.”}]}],”section_settings”:””},”scripts”:{},”css”:{},”css_page”:””,”template_setting”:{“settings”:{“id”:”settings”}},”template_setting_top”:{},”page_setting”:{“settings”:[“lock-mode-off”]},”post_type_setting”:{“settings”:{“image”:”https://shiphype.com/wp-content/uploads/2020/08/Where-to-Buy-Shipping-Supplies-Canadian-Edition_shiphype.png|314|706|999993794″,”excerpt”:”Whether you’re a business or an individual, there’a lot of options when it comes to buying shipping supplies. “,”extra_1″:””,”extra_2″:””,”icon”:{“icon”:””,”icon_style”:””,”icon_image”:””}}}}

The post Where to Buy Shipping Supplies: Canadian Edition appeared first on SHIPHYPE Fullfillment.

Why is Shipping so Expensive in Canada?

\n\n

\n\n“Shipping is so affordable in Canada” – a sentence I can guarantee you’ve never heard from a Canadian business owner.\n\nYes, it’s costly and annoying but it’s understandable. Canada is the 2nd largest country in the world by total area but has a population of only 38 million people. What this means for the carriers is that they have to cover a very large area to deliver to people. You can argue that the US (3rd largest) is almost as big as Canada so rates should be higher there too. Keep in mind that their population is 8x bigger (330,000,000) compared to Canada meaning higher shipping volumes allowing resources to be well distributed and ultimately resulting in a lower operational and delivery cost for the carriers.\n\nJust like customers want cheaper products, sellers want cheaper shipping. If you are a Canadian business that ships products to customers, you are probably well aware of the high shipping costs we pay compared to the rest of the world. Even compared to our neighbours south of the border, we are paying a lot more. This is especially true for those sellers who are shipping “small items”.\n\nLet’s take an example of somebody who sells Earphones.\n\nMost earphones weigh around 1 oz or 28 grams.\n\nIf you are shipping earphones from Toronto to Toronto, it will cost$11.50 CAD\n\nIf you are shipping the same earphones from New York to New York, it will cost ~$4 CAD\n\nThat’s a difference of $7.50. That’s a lot! This can make the difference between having a business and not having a business.\n\nLuckily, we’re going to explore an option in the next section helping you bring this cost from $11.50 to $2 (regardless of where you are shipping in Canada) saving you a lot of money.\n

How to Ship for Cheap with Canada Post

\n\n

\n\nAs a seller, you can’t ignore the shipping cost and you have to account for it somehow. You can charge your customer for shipping or you can add it into the selling price of the item. Either way, it’s something that needs to be addressed.\n\nWe all know letters and packages can be sent via Canada Post but not everyone knows about Oversize Lettermail.\n\nOversize Lettermail is a lettermail (stamped postage) category that lets you ship items that fit within the following range:\n

\n

\n

\n

\n

\n

\n

\n

\n

\n

\n

\n

\n

\n

\n

\n

\n

\n \n\nNow, isn’t this interesting. Pay attention to the Height/Depth limit (0.8 inches OR 2cm). According to Canada Post, any item that you can fit that’s under 0.8 in or 2cm in depth/height, you can ship as Oversize Lettermail!\n

\nIf you were shipping earphones inside an envelope instead of a box, you would only have to pay ~$2 for shipping compared to $11.50. That’s savings of $9.50 per order. That’s a pretty big deal if you ask me.\n

\nI know what you’re thinking, an envelope doesn’t look that good and I agree. The good news is that it doesn’t have to be an envelope. You can also use other packaging such as a kraft or poly bubble mailer. The only rule is that you CAN NOT exceed 0.8 inches or 2cm in depth.\n\nIf you choose to use a bubble mailer, keep in mind that it will have its own depth which you need to account for when calculating the size. Envelopes on the other hand are very thin and don’t interfere with the size requirement.\n\nThere’s a tradeoff between package appeal and size and ultimately, you have to make the choice between which kind of packaging suits your product/business.\n

\nWith oversize lettermail, there is a weight limit of 500 grams. There are different prices for each of the following weight ranges:\n

\n
1. Up to 100g = $1.94

\n

2. 101-200g = $3.19

\n

3. 201-300g = $4.44

\n

4. 301-400g = $5.09

\n

5. 401-500g = $5.47

\n

\nI think this is pretty fair. Most small items should fit within that weight limit.\n

\nSome examples of items this will work for:\n

\n
1. Phone Accessories

\n

2. Jewelry

\n

3. Makeup Items

\n

4. Flash Drives

\n

5. Plus 1000s of other items (as long as it doesn’t exceed the size)

\n

\n

\nIf you go over the size limit, you can not ship using oversize lettermail. At that point, you will have to use a parcel service.\n\nIf you decide to ship even when you know you’re exceeding the size limit, you could probably get away with a few but Canada Post will return your shipments eventually and that will result in a lot of unhappy customers.\n\nI can’t stress it enough, it’s important to make sure you do not exceed the size limit.\n

\nThere’s a couple of ways to make sure your item fits the guidelines.\n

\n
1. Use a ruler/measuring tape

\n

2. Ask Canada Post

\n

3. Invest in a Size Checker

\n

\n

\nThis one is pretty straight forward. You probably have these lying around your house somewhere. If not, just go to the nearest Dollar Store.\n

\nCanada Post has a size checker for lettermail. When they are unsure if a package is eligible, they pass it through the slot. If it passes, they’ll ship it. If it doesn’t they’ll send it back to the sender. When going to drop off your orders, you can ask them to use the checker to ensure your package fits.\n

\nCanada Post doesn’t sell the tool they use but luckily I found someone who does. Check out this listing on Etsy: https://www.etsy.com/ca/listing/608643075/slot-of-doom-lettermail-sizer-for?ga_order=most_relevant&ga_search_type=all&ga_view_type=gallery&ga_search_query=slot+of+doom&ref=sr_gallery-1-1&organic_search_click=1&bes=1\n\nYou can be sure if the item fits before taking it to the Post Office and even before packaging it.\n\nThis wasn’t around when I used to sell products online but lucky for you, you can invest in something like this if you’re a fan of saving time.\n

The Drawbacks of Oversized Lettermail

\n\n

\n\nThe benefit is huge and obvious – $10 saved per order. Who wouldn’t want that?\n\nWell everyone would want that but oversize may not be the best fit for all items. Let’s start by discussing some of the most common problems:\n

\n
1. Size & Weight Limits

\n

2. Fragile Items

\n

3. No Tracking

\n

\n

\nThis one is pretty obvious and has been discussed earlier. The size limitation will not allow for big items to be shipped with OS lettermail. Items over 500 grams can not be shipped either.\n

\nItems that can easily break shouldn’t be shipped with Oversize Lettermail. They can easily break as Canada Post will have it mixed in with other letters and sometimes they struggle to fit items together.\n\nIf you’re selling items that can easily break if bent, I’d stay away.\n

\nThis is the biggest problem with Oversize Lettermail. You will not be able to track orders because you are using stamped postage instead of a shipping label. Stamps do not come with tracking information lol.\n\nYou will have to let your customers know that tracking information is not available if they place orders with you. Further, if customers say they did not get the package, you have no way to provide it and will likely have to reimburse them or provide a replacement.\n\nWhen I was selling items online, if the order was less than $50, I would ship it without tracking.\n\nIf it was $50 or more, I’d ship it with tracking.\n\nIs it worth paying $10 extra and getting tracking information or is it worth saving $10 and having no tracking? This is a decision you have to make.\n

How I used Oversize Lettermail to Start my Business

\n\n

\n\nI got started with eCommerce in Spring of 2013. At the time, I was selling iPhone cases on eBay. This was before the iPhone 5S came out (so yes, Dinosaur times)\n\nAt the time, I was buying cases for $4 and selling them for $15. Even though I was selling for a gross margin of $11, I was only pocketing about $5 per case sold. The reason is because there’s a lot of hidden costs. Aside from the case, I also had to pay:\n

\n
1. eBay Fees ~$3/case

\n

2. PayPal Fees ~ $1/case

\n

3. Packaging Cost (Bubble Mailers) – ~0.20/package

\n

4. Shipping Cost!!!! ~$1.50 (yes it was a bit cheaper back then)

\n

5. Additional Cost = ~$6

\n

6. Total Cost = $10

\n

7. Net Profit = $15 – $6 – $4 = $5

\n

\nThere were some cases which were making me $1/sale and some that were making me $7/sale as well. Either way, I was happy because I was averaging 50 orders per day and the small profits do add up.\n\nIf oversize lettermail did not exist, I would be paying $10 in shipping cost. Considering this same calculation, if my shipping cost increases from $1.50 to $10, I would suffer a loss of $4 for each item sold. An alternate solution would be increasing the price or charging the customer for the shipping but that also comes with problems.\n\nTo make $5, I would need to increase the sale price by $10. At $15/case, customers were buying but it would be a much harder sale at $25/case. I’m sure I would’ve still got orders but the number of orders would have dropped significantly. I rather be selling more units because that gives me added benefits such as purchasing power with my supplier helping me negotiate better rates.\n\nBecause I was using Oversize Lettermail, I was not able to provide my customers with tracking information.If someone said they didn’t get their package, I would have to take the hit on that. I made the executive decision to continue selling for the cheaper price rather than increasing the cost. If somebody claimed they didn’t get their package, I would provide them a replacement free of charge.\n\nOversize Lettermail is not a good fit for everyone. I was extremely lucky because I was selling a non-expensive, small item that wasn’t fragile. If it wasn’t for me using Canada Post Oversize Lettermail, I would not have been able to sell cases at all.\n

How To Get Started with Oversize Lettermail?

\n\n

\n\nIt’s really easy to get started with oversize lettermail. You don’t need to create an account anywhere and the only thing you need to do is purchase stamps. You can purchase stamps at any Canada Post location. You can either purchase individual stamps or purchase a coil. The advantage of purchasing stamps beforehand is that you don’t need to stand in line every time you visit the post office.\n\nOnce your item is packaged inside an envelope or bubble mailer with the address labels, put the stamp on and drop it off to a Canada Post location.\n

How to Ship Items using Stamps?

\n\n

\n\nI find following this order the most efficient:\n

\n
1. Print address labels

\n

2. Spread address labels on table

\n

3. Put items sold on top of address labels

\n

4. Put promotional Inserts (optional) on top of address label

\n

5. Add item sold and promotional insert into packaging (use envelope or bubble mailer)

\n

6. Use slot checker to make sure you don’t go over the size

\n

7. Weigh package to make sure you don’t go over the weight

\n

8. Close the package

\n

9. Paste address label on package

\n

10. Add stamp on package

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\nOnce your items are all packed and stamped, simply drop off to a Canada Post location or drop-off bin.”}]}],”section_settings”:””},”scripts”:{},”css”:{},”css_page”:””,”template_setting”:{“settings”:{“id”:”settings”}},”template_setting_top”:{},”page_setting”:{“settings”:[“lock-mode-off”]},”post_type_setting”:{“settings”:{“image”:”https://shiphype.com/wp-content/uploads/2020/08/Cheap-Shipping-for-Small-Items-in-Canada_shiphype.png|314|706|999993800″,”excerpt”:”Save up to $10/shipment with this must-know hack. Oversized Lettermail is ideal for Canadian businesses who ship small and inexpensive items.”,”extra_1″:””,”extra_2″:””,”icon”:{“icon”:””,”icon_style”:””,”icon_image”:””}}}}

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What is Sales Tax?

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\n\nSales tax is a tax levied by the government on the sale of most goods and services. When a business or individual purchases an item in person or online, the seller is obligated to collect sales tax. This tax does not add to the profit of that business but instead is simply collected for the government. Sales tax is just one of the many ways the government collects tax from it’s residents and visitors.\n\nSales tax can be charged by the Country, the individual State/Province, Counties, Cities, all of the above or none of the above (it all just depends on where the recipient lives).\n\nKeep in mind that this is completely different from income tax or other kinds of taxes.\n

Sales Tax: How it Works?

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\n\nThe amount is usually a percentage on top of the selling price of the item/service. Let’s say you go to Starbucks and purchase a coffee for 5 dollars in an area where there is a 10% sales tax.\n\nIn this case, Starbucks would charge you $5.50 Total ($5 Gross + $0.50 Tax).\n\nWhether a person is a local resident or a visitor from a different country, the business has to charge tax either way if they are physically coming to the point of sale to do the transaction. There are certain instances where sales tax is exempt or reduced such as for Indigenous People & those who have served in the military.\n\nAt the end of the tax period, the seller who collected this tax will have to remit it to the government(s).They can not keep this amount for themselves and that would be considered illegal.\n

Does Sales Tax apply to eCommerce?

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\n\nYes, sales tax does apply to eCommerce sales as well. It’s a little bit tricky compared to Brick & Mortar where everyone is charged the same tax rate.\n\nSince customers are not actually present at the point of sale and products are being shipped to them, the rate which customers are charged varies. It gets even trickier sometimes because the billing and shipping address can be in different provinces/states and sellers often don’t know which tax rate to charge.\n\nShort Answer = Tax rate to be charged is always based on the address of the recipient.\n\nAnyhow, once you’ve determined that tax applies to your customers, it is your responsibility to collect it and to ensure that you collect the correct amount.\n

Do I need to collect Sales Tax in Canada?

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\n\nThe good news is that for most sellers, you are only required to charge sales tax to buyers within your country. There may be certain regions even within your country where you may not need to charge tax.\n\nBy law, if you have a “sales nexus”, you are required to charge tax in Canada. A “sales nexus” is a status given to a business that has “significant operations” in a different country. Although there is a lot of gray area as to what significant operations means and who falls under that, the rule of thumb is that if you have a physical presence in that country, you have a sales nexus there.\n

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1. Physical Location

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2. Employee

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3. Owns Property There

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\nWhether you need to collect sales tax in Canada or not ultimately comes down to where your business is registered. If you are not a Canadian company and do not have a physical presence in Canada, you do not have to charge sales tax.\n\nIf your business is located in Canada, you would need to collect sales tax.\n\nIf your business is located outside of Canada, you do not need to collect sales tax.\n

\nIf you are a Canadian business, you are required to collect sales tax if your sales exceed $30,000 CAD in a single calendar quarter (3 months). Before this, you are not required to register for a GST/HST number.\n\nOnce you’ve exceeded sales of $30,000 in a quarter, you are obligated to register for a GST/HST number. Once you’ve registered, you are now required to collect tax on all following periods after as well.\n

\nIf your business is registered outside of Canada, you do not have to charge sales tax in Canada.\n\nIn fact, if you are shipping internationally to other countries, you don’t need to worry about collecting tax for any of them. This makes life easy for businesses and in fact makes a lot of sense too. Most online businesses sell to multiple countries and there are way too many cities/districts/regions in the world for an online seller to keep track of whom to charge tax to and how much.\n\nImagine if you had to charge tax to every customer you shipped to, that would just be an accounting nightmare.\n

Why don’t I need to charge tax?

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\n\nThe short answer is because you do not have a Tax ID registered in Canada. The tax you collect from customers. Is this a loophole for buying things from different countries? Yes, and no.\n\nYes, because of what I explained above.\n\nNo, because international customers will still have to pay tax in the form of Duties/Taxes.\n

Duties/Tariffs

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\n\nAlthough you are not required to charge sales taxes to your Canadian customers, they will most likely have to pay some sort of duties/tariffs when purchasing online.\n\nDuties are a type of tax that the importer of an item (receiver) is charged when the goods are coming from a different country. Even if the goods were not manufactured in that country, the government will charge tax. Duties/Tariffs are one of the biggest money makers for governments across the world.\n\nYou might be thinking, well isn’t that a loop-hole for customers to purchase items outside of their home country to avoid paying taxes? Yes, kind of but not really. When consumers purchase items from abroad, they are charged import fees aka duties aka tariffs. The amount is charged to the buyer and is also a percentage of the sales price. Unlike the sales tax, tariff percentages vary based on the category of the item.\n

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1. Cell Phone Cases imported to Canada = 8% Duty

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2. Men’s Clothing imported to Canada = 18% Duty (ouch)

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1. Goods that are worth less than $20

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2. Gifts from family members or friends who live abroad worth less than $60.

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\nBtw, GST (5%) is also charged on top of the tariffs.\n\nCheck out this calculator HERE.\n\nYes, it sucks for buyers but the government needs their cut and they’ll make sure they get it.\n\nNow, check out the next section which is actually a decent loophole that can save your customers some money and make the purchasing process easier.\n

Do I need to charge sales tax if I’m using a Fulfillment Center in Canada?

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\n\nIf you are using a fulfillment center, you don’t need to charge tax. Even though the fulfillment center is shipping your products from Canada to customers in Canada, they are using their warehouse and not yours.\n\nIf you had an employee of your own shipping products from your office or warehouse in Canada, you would then need to collect sales tax.\n\nThis can be extremely beneficial because your customers will get to save on paying duties on delivery. Paying duties can be pretty annoying for customers and that’s why there is now a whole trend around DDP (Delivery Duty Paid) shipping.\n

How much tax do I need to charge?

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\n\nOnce you are sure that your situation creates a sales nexus and requires you to collect tax, it’s important to ensure that you are collecting the correct amount.\n\nKeep in mind that the tax rate differs based on which province your goods are being shipped to:\n

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1. Alberta

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2. British Columbia

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3. Manitoba

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4. Northwest Territories

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5. Nunavut

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6. Quebec

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7. Saskatchewan

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8. Yukon

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1. Ontario

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1. New Brunswick

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2. Newfoundland and Labrador

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3. Nova Scotia

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4. Prince Edward Island

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\nCheck out the following table to see tax rated directly from Revenue Canada’s website:\n\n“}]}],”section_settings”:””},”scripts”:{},”css”:{},”css_page”:””,”template_setting”:{“settings”:{“id”:”settings”}},”template_setting_top”:{},”page_setting”:{“settings”:[“lock-mode-off”]},”post_type_setting”:{“settings”:{“image”:”https://shiphype.com/wp-content/uploads/2020/08/Charging-Sales-Tax-to-Canadian-Customers_shiphype.png|314|706|999993802″,”excerpt”:”Sales tax can be quite confusing. In this article, we discuss whether you need to charge sales tax in Canada as an eCommerce seller.”,”extra_1″:””,”extra_2″:””,”icon”:{“icon”:””,”icon_style”:””,”icon_image”:””}}}}

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