Dropshipping from US supplier to Canada from the UK

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I'm thinking of building an ecommerce store using US drop shippers to supply products for buyers in Canada and I'm based in the UK. I need to know where do I pay taxes to and do I need to register a business abroad?

Thanks.
#canada #dropshipping #supplier
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  • Profile picture of the author dave_hermansen
    You may or may not need to form a U.S. LLC. Some U.S. suppliers will deal with dropshipping sites based in other countries but most will not. Also, many U.S. suppliers do not ship to Canada.

    For the most part, unless the sales volume is really large to certain states, sales tax is only paid to states where your business is located, which in this case would be none (plus, you are shipping to Canada, not the U.S.). Income tax usually is paid only to your own country but that could be different, depending on the type of business entity you set up.

    You really need to talk to a tax professional in your own country about the best setup to avoid the tax hassle.
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  • Profile picture of the author sgalla414
    Not sure logistically how this would all workout but just keep in mind there are 3 different currencies you are exchanging between, CAD-USD-EUR ! Exchange and exchange fees might eat up alot of your profit?
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  • Profile picture of the author alexshawn1216
    Do you think dropshipping from USA to Canada profitable especially when the USA has trade war with China? It might be not a goods idea to keep your goods competitive while get enough profit margin.

    Instead, dropshipping from China to Canada would be much more easier to get profits.
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    • Profile picture of the author dave_hermansen
      Originally Posted by alexshawn1216 View Post

      Do you think dropshipping from USA to Canada profitable especially when the USA has trade war with China? It might be not a goods idea to keep your goods competitive while get enough profit margin.

      Instead, dropshipping from China to Canada would be much more easier to get profits.
      Believe it or not, a whole lot of of people actually want to purchase well made products from real brands that they know and trust. Dropshipping from China isn't ever going to be able to accomplish that!
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  • Profile picture of the author markmiller24x7
    I think the bigger concern will be Exchanges & trade war which is going on right now.

    I don't know how you gonna manage these things & end up making a profit after all of this.
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    • Profile picture of the author dave_hermansen
      Originally Posted by markmiller24x7 View Post

      I think the bigger concern will be Exchanges & trade war which is going on right now.

      I don't know how you gonna manage these things & end up making a profit after all of this.
      Utterly ridiculous! The people you are competing with online are in the exact same boat as you as far as the mythical "trade war" goes. If the costs to purchase from China or Mexico (or wherever) go up for you, they went up for everyone else, too. It's not like the U.S. businesses are suddenly going to change their ways and make the same cheap, Chinese junk. Minimum wage laws (as well as child labor laws) make that impossible.

      Honestly ... people are really worried about having to pay an extra 25% for a piece of junk they are buying for $4 and selling for $20? Wow, that 25% hike now means you lose a whole dollar (or pass it onto the consumer if everyone else does that).
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