6 Steps on How to Become a Non-Resident Importer
For American companies, becoming a Non-Resident Importer (NRI) into Canada is a relatively simple process that creates the potential to boost sales by at least 10% of their American sales figure.
Below, we outline the 6 steps to take to become an NRI.
Step 1: Register as a Canadian Business
To become a NRI you need to register for a Canadian business number, which is similar to your US Federal Tax ID.
Your Canadian business number will allow you to:
- Register for Canadian taxes (GST)
- Use it as your Importer Number and Import your product to Canada
- Import your product cheaper than your customers can
- Reduce the final cost of goods for your Canadian customers
- Make it easier for customers to buy from you
Where to register:
Registration is done through the Canada Revenue Agency and can be done online, by mail, fax or phone.
- For information on the requirements of each type of registration, click here.
- For a fillable online-PDF of the RC1 form (request for a business number), click here.
- For a printable version of the RC1 form, click here.
Step 2: Create Landed Cost Pricing
Landed Cost Pricing is a price for customers that includes Canadian duty charges, transportation costs and customs fees.
Why Landed Cost Pricing is so beneficial:
- Allows for increased understanding of real expenditures per product
- Create more competitive pricing relative to rival products
- Costs are accounted for in every purchase
- Profit margin becomes less volatile and easier to calculate
Step 3: Remove Third Party Distributers and Resellers
Instead of selling your products through a reseller, becoming an NRI allows you to receive orders from your customers directly through the sales channels of your choice and ship your goods in a way that works best for you.
Too often, companies deal with a tarnished reputation in the eyes of their customers due to bad experiences customers have had with third party distributers.
Operating as an NRI eliminates the need for third party distributers altogether. As a business, you can deal directly with clients which will give you control over your company’s interactions with them. Becoming an NRI will drastically improve your service levels and allow you to build stronger relationships with clients.
Step 4: Invoice Your Customers in Canadian Funds
Convert your landed cost prices into Canadian dollars and handle the exchange into US funds after the sale.
Pricing in Canadian dollars will make it simpler and more attractive to Canadian customers to purchase your products. Offering a simple domestic transaction should translate into increased sales within Canada.
Step 5: Offer Domestic Returns to Customers
Provide a local “return address” for your Canadian customers. Customers will send returns to this address. Once returns are received, they can be shipped internationally to your company.
- Creating a simplified return process improves customer service by making it easy for customers to return unsatisfactory goods
- As an NRI, this return address allows you to simulate a Canadian location without increasing fixed expenses
Many of Frontier’s clients utilize this service. Customers of Frontier clients send their returns to Frontier’s warehouse. From there, Frontier warehouses the returns and ships them back to clients when they are ready to receive them.
Step 6: Maintain Compliance
To ensure your company is compliant you must:
- Classify your goods appropriately for customs
- Report accurate product values
- Understand related Trade Agreements
- Comply with specific Point of Origin Rules
- Maintain proper documentation
Maintaining trade compliance protects your business from costly penalties and fines.
Trade compliance is a complex process and working with customs brokerage experts can help you reduce your costs and potential for error.