Updated: December 7, 2022
In this article, we’ll provide you with insights and practical information for developing a successful U.S. export strategy. Before we dive into discussing critical elements of an effective export strategy, let’s take a closer look at the benefits of expanding into the U.S. market.
With over $370 billion USD exported from Canada to the U.S. in 2021, Canada is the second-largest goods trading partner to the U.S. Additionally, small business goods exporters that sold to the U.S. increased by 9.3% last year—the highest number of goods since 2007. Entering the U.S. market can be a lucrative endeavour for some small businesses.
Why should your business export to the U.S.?
The U.S. market is 10 times the size of Canada’s. That represents a lot of potential customers. It also offers a much larger pool of data that companies can use to deliver better products and services. Exporters to the U.S. can tap into macro-level trends, enabling them to more efficiently understand customer preferences, leading to higher sales.
1. Prevent challenges by taking appropriate steps
Opening a U.S. sales channel may present some challenges. Knowing them from the get-go will help you craft a strong export strategy and help you avoid costly missteps.
- Understand the complexities of tariff systems. Taking the time to understand these systems will save you time and money in the long run. By complying with the duty and tariffs, you’ll avoid penalties and any resulting delays.
- Securing the right U.S. fulfillment partners. When trusting elements of your brand integrity and customer experience to a third party, risks can be high. Be sure you’re offering a seamless delivery with the right partner to maintain your brand’s integrity and enhance your brand loyalty.
- Create a process for customers who don’t pay. Ensure you have a plan in place for customers or distributors who are late on payments. Attempting to recoup those losses through the U.S. legal system can be time consuming and financially draining, so put measures in place to ensure payments are received
within an appropriate time frame.
- Decide where to maintain your inventory. If you have multiple Canadian distribution centres, you may realize that only a few of them are ideal for fulfilling the orders of your U.S. audience. Knowing where your southbound inventory should be maintained leads to faster and more seamless transit timesfor your export customers. As your business continues to grow, you may even consider having a U.S. distribution centre for even faster fulfillment.
Developing a thorough strategy before entering the U.S. market is critical. The more questions you can address now, the more confident and better prepared you’ll be for exporting success.
2. Make sure you’re ready to export
Wanting to sell in the U.S. can be great for business expansion and your bottom line. You’ll know when you’re ready when there is:
- Sufficient interest at the corporate level inside your organization. Growth may happen thanks to the efforts of the staff members, but it starts with a commitment from the executive team. If your entire executive team isn’t on board with expanding into the U.S., you may not get the result you’re expecting.
The various moving pieces involved in the expansion means that everyone has to be on the same page.
- Readiness to invest in U.S. expansion. The majority of your investment will be in building connections with the right people. Be prepared for regular costs to support recruitment and training for travel to the U.S. In addition to investing in new connections, you may also need to invest in fulfillment,
including more boxes and bags, higher last-mile fees and longer hauls.
- A commitment to sustainable growth. You must consider what a prosperous move south will mean, how you’ll manage to sustain and expand it and how you’ll get buy-in from your employees. If you aren’t committed to sustainable growth inside your company as you sell to the U.S., you may need to reconsider
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3. Find the right segment to benefit your business
You’ve done your due diligence and you’re ready to start scaling your business into the U.S. market. Exporting to the U.S. comes with a variety of benefits for your business. You’ll be able to grow your brand awareness in new markets and gain an edge over the local competition. Additionally, access to this larger pool of market data will help you reach new customers and a wider variety of market segments.
But before you commit, you should do a market attractiveness test and a competitive analysis.
A market attractiveness test evaluates a market’s potential. Ask questions that are relevant to your industry and target market:
- Is there enough potential for growth in your industry?
- Are people willing to spend on this product at this time?
- Are there any underserved markets that I should focus on first?
- How does the supply chain in that region work–who does final-mile delivery and where are the distribution centres?
- Which products are you offering your U.S. audience? Are there any potential customs concerns, competitive positioning, pricing or transit time issues with your chosen products?
If you’ve answered these questions with confidence and you’re ready to move forward, continue by doing a competitive analysis. Discover the companies that you would be competing with directly, and ask yourself a few key questions to help determine your market viability:
- Is your selection superior? How similar are your product offerings?
- Can you offer something they don’t?
- Do you excel in customer service or delivery time?
- How do your competitors approach international shipping?
4. Mobilize your domestic network
You’ve selected your market, and you know your product will add value to it. Now it’s time to find the right support network to put your plan in motion.
Give some thought to your domestic network of advisers, customers, suppliers, trade associations, shipping partners and government partners with inroads into the market you want to enter. The most cost-effective way to set yourself up is a few phone calls combined with a solid pitch. People want to help you if they can, and if your pitch is good enough, they will.
As part of that exercise, you may want to also consult the Canadian Trade Commissioner Service, as it’s their job to help you find resources like shipping partners. If you’re already working with Purolator for domestic shipping, our teams can help set you up with a U.S. shipping solution. Together, we can determine which specialized services are needed for your products, as well as shipping solutions, tracking and delivery, customs compliance, key shipping lanes, transit times and an affordable returns strategy.
5. Scale your e-commerce initiatives
When scaling the e-commerce side of your business for the U.S. market, you’ll want to focus on three key areas that will bring you the most value. By following these steps, your business will be in a better position to attract and retain new customers from across the border:
- Invest in automation
Automation covers a number of areas, such as digital fulfillment, software for inventory and marketing. By investing in tools or services that cut down on the hours spent performing these tasks, you’ll be able to export more goods to more customers at a faster rate of fulfillment.
- Enhance customer support
With e-commerce customers having so many purchasing options at their fingertips, bringing personalization and a human touch to your customer support services will help your business stand out from the competition and increase customer retention.
- Adapt your online store
To attract customers from your new market, you’ll need to adapt your current online store or create a U.S. version with updated search engine optimization, preferred U.S. payment methods and USD pricing.
- Understand delivery time expectations
Large e-commerce stores have given customers fast delivery times, but that doesn’t mean you have to compete at their level. Rather you should set expectations for your customers. Having a frequently asked questions (FAQ) page, or clearly communicating delivery times in your online marketing can help customers understand how long their delivery should take, mitigating questions and complaints.
- Invest in automation
Before you scale your e-commerce efforts, be sure to check the United States–Mexico–Canada Agreement (USMCA) for information on how it affects e-commerce exports.
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6. Work with your shipping partner
Ultimately, a quality U.S. export strategy won’t be worth the paper it’s written on if you can’t affordably get your products across the border. This is why working proactively with your shipping partner is vital.
Here’s what you should look for in a southbound shipping partner:
- Experience with U.S. logistics and customs compliance
- Streamlined cross-border shipping services including Express and Ground
- Trained Trade Compliance Specialists
- Door-to-door delivery services
Among other things, your trusted shipper can help you perform a review of your products, control packaging to optimize transit, reduce damage and lower costs, offer logistical solutions and add value to your export strategy.
The opportunities and resources are available to help you develop an effective U.S. export strategy. And with the right tools to support you, shipping cross-border becomes a much easier process.
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Use Purolator in your export strategy
These six steps to developing an effective export strategy will take some time to understand and execute. The benefits will likely outweigh the effort, given the large market and opportunities in the U.S. There are many resources available to help you develop an effective export strategy.
As long as you’ve done your due diligence and completed our recommended research, then exporting to the U.S. can be a viable way for you to expand your business.
With Purolator’s unmatched network reach, unparalleled speed, fully transparent tracking and on-time delivery guarantee, we can accommodate your shipping requirements to the U.S., internationally and within Canada.