5 Things Canadians Should Know About Dropshipping
You must be really fortunate to be a Canadian. Not just because to Canada's ninth-place ranking in the most recent Happiness Report, but also due to the prospects this nation presents for internet enterprises. In fact, 35 million of Canada's 35.5 million residents utilize the Internet. Canada now ranks among the Americas' biggest internet marketplaces. As a result, a lot of individuals are eager to get started with e-commerce.
Because of this, we made the decision to list the most important aspects of dropshipping in Canada that will be useful for people who are ready to give it a try. So, let's go to them now!
Canadian online retail market
Dropshipping in Canada is something that first-time internet business owners should be aware of since it mirrors a global trend. The e-commerce sector is continually expanding. A Statista analysis claims that retail ecommerce sales nearly hit $40 billion in 2018, up more than $3 billion from the previous year.
Additionally, it is anticipated to reach $55 billion in 2023. There is no better moment than the present if you're thinking when to launch your internet company in Canada.
You should register your company if you're a Canadian citizen who wishes to avoid any needless issues while dropshipping there.
In Canada, there are three primary company structures:
• Solo Entrepreneurship
The best business structure for people just starting out in e-commerce is a sole proprietorship. By selecting this option, you may run your company under your own name without obtaining a license. As a result, you avoid having to file for a Business Number with the CRA (Canadian Revenue Agency), which makes it much simpler to begin your dropshipping business.
But you may be asking yourself, "How can I get a supplier for my internet store?" To work with them, a lot of wholesaler’s demand that you have your company number and follow certain legal processes, don't they?
Right! However, you won't need anything of the kind if you want to discover suppliers for your dropshipping company on AliExpress. There, you may quickly identify trustworthy business partners, incorporate their goods into your shop, and seal the deal!
Canada has income tax laws
One of the greatest living standards in the world is found in Canada. And the tax system is what supports its success. You should be prepared to pay income tax if you want to launch your internet company and are a Canadian citizen.
A progressive tax system exists in Canada. There are really five tax rates, which vary based on how much money you make. You pay more taxes for your increased income when you move up to a higher tax band.
Let's examine it more closely. Your tax rate is 15% if your yearly income is up to $47,630. The following $47,629, however, will need a 20,5% payment. In other words, you must pay 5,5% more in taxes on every dollar you make beyond $47,630 than you did before.
For instance, if your dropshipping business generates $84,000 in revenue annually, you would pay taxes on the first $47,630 for $7,145 (15%) and the last $36,370 for $7,456 (20%).
When dropshipping in Canada, sales taxes apply
Canadian business owners also have to pay sales taxes in addition to income taxes. They should either collect these taxes or provide them to the government, which is more correct. The fact is that paying them really falls mostly on Canadian consumers. Simply add these taxes to the cost of your goods.
The Canadian sales tax system first seems to be quite complex and intimidating, which could deter dropshipping business owners. But if you examine more closely, you can see that's not the case.
Dropshipping to foreign nations
As you can see, the Canadian tax situation is not as difficult as it would seem. But wouldn't it be fantastic to stay away from it, at least for a while?
Actually, that is feasible.
Entrepreneurs in Canada are exempt from paying GST or HST until they earn $30,000 in yearly income. Additionally, if your income is below a particular threshold in several provinces, you are free from paying sales taxes (PST). You may thus postpone dealing with sales taxes until your online shop gains significant traction.
It's not the only method, either!
The good news is that you won't have to worry about paying sales taxes if you're a Canadian business owner and dropship items to another nation.
To sum it all together
Dropshipping is therefore undoubtedly a means of achieving financial independence and living a full life if you are a Canadian. Look into #1 dropshipper for Canadians today
. Everything you need to start an internet company is in Canada.