Canada is not only a beautiful country, but it’s also an excellent place to establish a dropshipping business. Especially for those just starting in the world of eCommerce and feeling overwhelmed by the sheer amount of competition in the market, Canada offers new doors and opportunities for both beginners and experienced entrepreneurs.
Join us in this article to explore how to set up a dropshipping business in Canada, key insights into its demand trends, and strategies to benefit your store!
Canada is an excellent location for starting a dropshipping business. Dropshipping is legal in Canada, provided sellers comply with local regulations and avoid prohibited items. Conducting thorough product research is essential to identify winning products. Working with reliable Canadian suppliers ensures timely delivery and quality products for customers. Implementing effective marketing strategies and automating processes can significantly enhance the success of a dropshipping business in Canada.
Key Takeaways
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Before we proceed further, let’s first understand what dropshipping is and how it works in Canada.
Dropshipping is an eCommerce business model that doesn’t require a physical inventory of the product. Instead, dropshipping utilizes an order fulfillment framework that relies on third-party suppliers to store products and ship orders for us. Therefore, dropshipping carries lower risks than standard e-commerce and requires minimal working capital.
The dropshipping process includes these three basic steps:
Let’s use an example where a Canada-based customer buys a water bottle from a dropshipping store to give you a clearer view of how the dropshipping process works.
Upon checking out, the shopper pays for the water bottle at a price presented in our store, say $29. Then, the dropshipper forwards the order information to the supplier.
When the details reach the supplier, we pay the wholesale price of the water bottle, say $25. Then, the supplier prepares and ships the order directly to the buyer in Canada. The difference between what we paid the supplier and what the customer paid us is our profit.
Remember that anyone can dropship in Canada even when we don’t live there. As long as we have the right tools, we can source products from anywhere globally and deliver them to Canada.
This is one of the first questions we should ask ourselves before diving into anything that involves investment and permits. Fortunately, dropshipping is legal in Canada, but we must follow specific local rules to avoid any issues.
In summary, as long as we offer legal products, take the necessary steps to adhere to eCommerce regulations, and stay informed about the taxes we must pay, we won’t face any problems establishing our business. Let’s dive a bit deeper into these points.
To start, certain items cannot be sold through dropshipping in Canada and the rest of the world. You can find more information in this dropshipping guide, but it’s essential to know that you should primarily avoid:
Once we keep this in mind, we can follow the dropshipping policies set by the Canadian government to ensure everything runs smoothly. Regarding taxes, the main ones you shouldn’t overlook are:
While the legal obligations of Canada dropshipping apply to everyone, that is not the case when it comes to registering a business.
One of the main factors to consider when starting a company in Canada is whether we live there or not.
If you reside in Canada and you decide to open your business there, you might need to register it with the government.
Here are the factors that determine the requirement to register your business:
Different regions in Canada have their respective rules for opening and registering a business. For instance, in some provinces, sole proprietorships that operate under the business owner’s name don’t have to register.
Assuming you are required to register your business, you can select from the following types depending on your local regulations and business needs:
However, as a beginner in the dropshipping scene, establishing your business as a sole proprietor is the best option. That’s because such a business arrangement makes it easier to report finances and manage your accounting.
Once your business starts to grow, it will likely require additional employees to manage the added workload. Then, you can expand your business and convert it into a more extensive organizational structure.
On the other hand, dropshippers who live outside Canada must seek professional advice from an accountant regarding the practicality of registering a business in Canada or in the country that you reside in (the latter is most likely the answer). Also, consulting with an accountant will help you understand your tax obligations and other requirements.
Once we follow the steps discussed above and are sure that we won’t encounter any legal issues or risk having our accounts banned, we can roll up our sleeves and work on our dropshipping business in Canada. Let’s go through everything step by step.
Products are the cornerstone of our business. What are we selling? Why are we selling that? How do we sell it? At this point, you may be overwhelmed with a flood of questions, but don’t despair! Everything can be resolved with good product research.
Through product research, we identify products that allow us to stand out from the competition. In other words, items with characteristics that transform them into winning products are more in demand than others for various reasons. Essentially, a winning product usually has some of the following advantages:
Of course, the idea is not to burn the midnight oil searching for a treasure that meets all those qualities at once, but if it fulfills any of them, it will likely be a product that sells better in your store and generates more customer traffic.
So, how do we find a winning product? Initially, we can always turn to free technological tools like Google Trends. This easily accessible software provides valuable information about a specific item and its demand by simply typing its name. Additionally, we can access other types of data, such as related articles, times of the year when demand rises and falls, trending categories, and much more.
On the other hand, professional supplier sites usually have a page of selected items that you can browse to find yours. Amazon, AliExpress, CJDropshipping, and Walmart allow us to access these sections. If we want to fine-tune our search, we can turn to AutoDS’s Hand-Picked Products Hub, a constantly updated and curated list by our product team featuring high-resents items.
Of course, the products we choose will largely depend on the type of business we are targeting and the niche we decide to delve into, but by considering these tips, we will be much closer to our goal.
If products are as important as we discussed above, we can imagine the significance of their origin! This is where choosing the ideal supplier comes into play, one that aligns with our business vision and policies. In its simplest form, dropshipping is the chain that forms between the buyer, the dropshipper, and the supplier, so much of our success depends on finding the right one.
The supplier is ultimately responsible for ensuring that the products purchased from us arrive on time and in good condition at our customers’ doors. When we venture into this business, we can turn to a wide variety of reliable Canadian suppliers.
At AutoDS, we offer you a list of trusted suppliers you can rely on to start your business on the right foot. To find Canadian suppliers using AutoDS, including our private suppliers, follow these steps:
1. Access the AutoDS Marketplace.
2. Use the location filter on the left side of the screen. From the other country options, select “Canada.”
3. To access private suppliers, you can use the “Supplier” filter and select “AutoDS suppliers” to view products from private suppliers offering unique items with faster shipping times.
Having chosen the ideal suppliers and products for our store, it’s time to focus on the selling channel, the platform through which we will connect our store with our target audience. These virtual storefronts, which can be significant marketplaces or customizable e-commerce platforms, have different characteristics depending on how we prefer to set up our store. These are some of the best ones:
eBay Canada is one of the largest eCommerce marketplaces, attracting millions of customers daily. The platform’s free organic traffic can significantly boost our sales as more visitors visit our page daily.
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Shopify Canada is a leading eCommerce platform favored for online dropshipping stores. It allows us to customize our store’s appearance fully and has no selling limits, allowing for greater flexibility.
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Wix Canada is a great choice if we want to build a visually appealing and personalized dropshipping store. It offers numerous benefits for dropshippers, including a wide selection of templates for brand customization. Additionally, Wix provides a business email with our store’s domain name and supports various payment methods, such as PayPal and credit cards.
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The reputation and credibility of Amazon need no introduction. With millions of customers visiting daily, the platform provides an excellent opportunity for dropshippers to tap into a vast market. Amazon’s infrastructure supports sellers with fulfillment centers across major cities, ensuring efficient shipping and delivery.
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Etsy Canada is a unique eCommerce platform focused on handmade, vintage, and craft supply items. It caters to a niche market of consumers looking for distinctive products. Etsy allows us to create a personalized storefront that reflects our brand identity.
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TikTok Shop is an innovative selling channel that allows us to market and sell products directly through the TikTok platform. This feature enables dropshippers to create engaging content and reach a vast audience, leveraging TikTok’s popularity to drive sales.
With AutoDS supporting TikTok Shop, we can effortlessly manage our inventory and fulfill orders, making focusing on creative marketing strategies easier.
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The next step in establishing our dropshipping business is to set up our business policies. If we put ourselves in the customer’s shoes, this is one of the first things they notice before making a purchase. How does the store handle shipping? What are the delivery times? How do I return a product? How can I pay?
Our policies answer all these questions, which is why it’s important to configure them.
The setup of these policies will vary slightly depending on the selling channel we use for our dropshipping business.
Are you still there? Excellent! To start selling, we still need to import products to our dropshipping store in Canada. Like many other tasks involved in dropshipping, importing can be done manually or automatically.
If we choose the manual method, we may risk wasting significant time downloading, copying, and uploading all the necessary information for each item we want to publish. On the other hand, if we opt for automation, we can gain more free time and avoid common human errors.
Regarding this latter method, AutoDS offers a very intuitive and practical way to import products, allowing us to add items individually or in bulk through a series of simple steps: all we need to do is copy the URL of the product(s) we are interested in publishing, then go to the AutoDS marketplace and click on “Add Products” in the upper left corner. A box will appear where we can paste the links to add our products automatically.
Of course, after publishing them, we can edit the information to optimize it and align it with our brand identity.
We’re not writing poetry to become metaphorical; marketing is the thread connecting our brand with our target audience. We could have the best winning products, a suitable supplier, and a beautiful store, but it won’t do us any good if no one knows this is happening.
This is where developing marketing strategies according to our long-term and short-term goals, depending on the type of product we intend to sell, comes into play. First, it’s almost unnecessary to mention it, but we must highlight the importance of understanding social media, the different communities within them, and how we can leverage them.
Today, most of the population spends a significant part of their day consuming content on TikTok, Instagram, or Facebook. Each platform has its specific dynamics, which helps us segment various types of audiences. It’s not the same to create a post for TikTok as it is for Facebook, nor is it the exact audience we will target depending on which platform we publish.
At this point, it’s also a good idea to invest in advertising on social media and Google to achieve greater visibility and generate increased traffic. Another smart initiative is to invest in influencer marketing by partnering with a celebrity in a specific niche we are targeting. This way, people who visit our store will do so more organically.
Finally, collecting data on our customers’ behavior on the page can help us improve our strategies. For example, we can email marketing campaigns announcing promotions and discounts while making our customers feel extraordinary to create a deeper connection with them.
Let’s focus on the fundamentals: to keep your customers content, they must fulfill their orders accurately. Delays, subpar product quality, or errors in shipping information can lead to dissatisfaction, which is why proper order fulfillment is critical.
Naturally, managing numerous orders at once can quickly become overwhelming, making it challenging to track each one from the moment it’s placed until it’s delivered.
This is where automation comes into play, offering a significant advantage with features like the Fulfilled by AutoDS option. This tool streamlines the entire process, allowing us to monitor orders from when customers click “add to cart” until their package arrives at their doorstep.
As mentioned above, order fulfillment is one of the most important tasks for keeping our customers happy. But it doesn’t stop there! We should always strive to provide exceptional customer service.
Whether it’s to resolve a question or address a complaint, good support can significantly affect a person’s decision to continue purchasing from us.
Let’s consider this: How would we feel if a product we bought arrived damaged, and when we reached out to the store for assistance, no one responded, or we received poor service? On the other hand, if we find someone on the other end of the line who is willing to help us and solve the problem, trust and credibility in the brand will likely be strengthened.
This is closely related to the previous point and what we discussed earlier regarding policies. First and foremost, we must be clear about our store’s rules. How long does it take to ship? How long do returns take? Until what date after purchase can a product be exchanged? Being clear and concise with our customers will help us maintain a better relationship with them and prevent the situation from worsening in case of conflict.
After this, if a buyer returns an item, we need to request a refund from our supplier and finally send that refund to the buyer. Selling channels like AliExpress have programs like the Buyer Protection Program, which aim to protect both the customer and the seller reasonably.
Once we have done everything we need, we will scale our Canada dropshipping success to achieve better profits. We can suggest similar items or use customer movements on our page to offer exclusive discounts. However, the ability to automate truly helps us scale any dropshipping business.
The fact that we can run a business with just a computer and internet access from anywhere in the world opens up many opportunities. Since dropshipping is already a low-risk business with minimal initial investment, automating not only makes our processes more efficient but also frees up time that we can use to focus on the priority aspects of our business.
Software like AutoDS serves as a comprehensive tool that handles various parts of a drop shipper’s process, such as:
Do you remember what happened when Mario ate a mushroom and became more assertive and bigger? Well, that’s what will happen to our business if we automate!
Beginner’s Tip: Remember, you can access our features through our 14-day trial for just $1.
Yes, dropshipping is legal in Canada as long as you comply with local laws; it is essential to ensure that the products you offer meet Canadian safety standards and consumer protection laws.
Starting a dropshipping business in Canada in 2025 can be worthwhile due to the growing eCommerce market and relatively low startup costs.
To find reliable dropshipping suppliers in Canada, we can utilize platforms like AutoDS or explore established marketplaces such as AliExpress and Amazon, which provide various supplier options and tools for monitoring product availability and pricing.
We have reached the end! Now we know a bit more about the art of dropshipping in Canada!
Remember that these steps are not much different from those you would take when starting an eCommerce business in another country. Still, it is always necessary to learn more about the regulations and different characteristics of the place where we plan to develop as dropshippers.
To continue researching these topics and others, we suggest checking out the following articles:
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