philraymond — 2013-12-28T22:09:39-05:00 — #1
I'm a Canadian wanting to sell American products to American citizens through my website. I can hire a fulfillment company in the U.S. to store and ship the products, so I don't need to be in the U.S. myself (I'm in Canada), but still, I'm thinking the U.S. government probably doesn't want a Canadian getting paid to sell U.S. products to U.S. people.
Do you think I have to register a U.S. corporation in this case? Thanks for any thoughts you may have.
mikl — 2013-12-29T08:28:20-05:00 — #2
Please don't take offence at this, but if that is what you believe, you clearly don't know much about international trade. The USA and Canada are both global trading nations whose economies depend on international commerce. There's no question of the US government not wanting you to sell your products to people in the US. It's not in their interest to stop you, nor would they have the power to do so if they wanted to.
You certainly don't need to register a US company in order to sell to Americans, nor do you necessarily need to use a US-based fulfilment house (although there might be advantages in doing so).
What you should be focusing on is creating a website where people in the USA (or any other country that you wish to target) can find out about your products, get the information they need to make a decision, and place their orders. Whether you despatch the products yourself from your base in Canada, or whether you use a third-party to do that, depends largely on the scale of the operation. If you are just starting out, I would advise you to keep the whole operation in house. As you grow, by all means consider using agents or fulfilment houses in the USA, but only when the size of your market justifies it.
philraymond — 2013-12-29T11:51:16-05:00 — #3
Thanks for your reply Mike. You're right, I know nothing about international trade. But this is a bit different - I know the US government would be happy to have me sell Canadian products to the US, but my issue is that I'm not so sure about me as a Canadian citizen selling US products in the US (so the products are never coming into Canada - I'm just buying them from US manufacturers and then selling them retail in the US). I know my dad was in a similar situation to me and he was told he couldn't do it because he would be effectively taking an American job.
Hopefully that is more clear. Thanks again, I appreciate your input.
mikl — 2013-12-29T13:20:04-05:00 — #4
Phil, thanks for the clarification. However, I really don't think you need worry. I don't know why your dad was told that he would in effect be taking an American job (but admittedly I don't know all the circumstances). But, if you are physically in Canada, I can't see how that could apply. You are not taking anyone's job; your are running a business - a Canadian business which happens to have customers in the US.
In that respect, your circumstances are the same as mine. I am based in the UK. I run a software development business. I have clients in the US, who pay me to help them with their software. I am free to visit my clients, and to take their money. The US government does not object to that. The only thing I cannot do is to actually locate myself in the US and work exclusively for a client there. In that case, I would indeed be taking an American job. But that's a world away from running a cross-border business from a base outside the US.
If you are not happy with this advice, by all means consult someone with specialist legal knowledge in this area. But I honestly don't think you will have a problem. What you are proposing is in no way unusual - and is perfectly acceptable to governments in both the US and Canada.
jaagare — 2013-12-30T01:25:16-05:00 — #5
@philraymond - I think what your dad meant was that you cannot go to US and then sell products in US. But you can definitely own an online store and then sell the products from US to US Customers. I think its partly some kind of drop ship business model where in you own an online store and have tie-up with drop ship retailers. Lets take for example you want to sell T-Shirts from Retailer A who is based in US to customers only in US. So you have an agreement with the Drop Ship retailer that when an order is placed, they will supply the product to your customer at a mutually agreed rate. Like in this case you decide with the Drop Ship supplier that the T-Shirt will be supplied to the customer at $10 per T-Shirt. Now on your online store you can set a price of $15. As soon as a customer orders a product you get $15 out of which $10 will go to the Drop Ship suppler who on receipt of payment will deliver the T-Shirt at the agreed price. Hence, I do not even see a reason why you would be taking an American Job but on the contrary I see it beneficial to the US economy as the purchase + sale + sale to customer are all happening in the US so the Drop Ship Supplier and Shipping company based in US benefit from the sale you make.
I am no legal expert so you can definitely consult a legal expert in this regard, but based on what you have presented, as a layman that's what I feel and I might be completely wrong with my suggestions.
force — 2013-12-30T02:17:04-05:00 — #6
I've bought and sold digital products from Canada, Australia, and Great Britain. I've bought tangible products from all three countries. As a resident of the US, the only obstacle is the time it takes for a physical package to pass through US customs. For the most part, this typically adds 2-5 days to the shipping process. US customs makes sure that the product entering the US isn't on the list of illegal items.
US Customs: http://www.cbp.gov/xp/cgov/travel/id_visa/kbyg/prohibited_restricted.xml
US Postal Service: http://about.usps.com/publications/pub141/standard-prohibited-and-restricted-items.htm
You don't necessarily need a warehouse in the US to sell products to US citizens.
If you want speedy shipping, then you will need to have a warehouse in the US.
An amazon storefront with fulfillment by amazon might be an easy way to go. I'm not quite sure how the international aspect would work, but I suspect you might be able to store a supply of your product(s) at a US warehouse for a small fee:
http://www.amazon.com/gp/help/customer/display.html/?nodeId=200240440 or http://www.amazon.ca/gp/help/customer/display.html/?nodeId=200240440
http://www.amazon.com/gp/help/customer/display.html?nodeId=201411290 or http://www.amazon.ca/gp/help/customer/display.html/ref=hp_left_sib?ie=UTF8&nodeId=200240450
The main thing you would need to figure out if there are any taxes due upon a sale.
philraymond — 2013-12-30T19:16:21-05:00 — #7
Thanks everyone for your thorough answers. Very helpful and very much appreciated!