Zappos Gives Up On Canada Due To Customs Problems
from the abandoned-great-white-north dept
A few years ago, when I was in Toronto, I remember being shocked when a friend there told me how difficult it was to get any sort of serious e-commerce there. Because of problems with customs and other issues, many of the big e-commerce players wouldn't ship to Canada, or made it quite difficult. This particular friend would order stuff to be shipped to a relative in the States, to be "delivered" later. It appears that Zappos has had enough. Rob Hyndman points us to the somewhat surprising news that Zappos has bailed out on Canada, saying it will no longer ship there, due to issues with customs:We have made the difficult decision to shut down the canada.zappos.com site and stop shipping to Canada. One of our core values is to "deliver WOW through service". That means the best selection of brands and products that can meet just about every individual’s needs as well as fast, free shipping and free returns, all at competitive pricing. Our Canadian customers know that we have not lived up to these service levels.While this is just one e-commerce outlet (albeit a subsidiary of Amazon.com), combined with what I'd heard in the past, it really does seem like a pretty major issue for Canada. If people there can't reliably order e-commerce products, then Canadians are missing out on quite a big part of what the internet enables. You would think there would be a more concerted effort to make things right, rather than spending so much time doing things like passing laws that Hollywood wants, which will limit consumers even more.
Product selection on canada.zappos.com is limited due to distribution agreements with the brands we sell in the United States. In addition, we have struggled with general uncertainty and unpredictability of delivering orders to our Canadian customers given customs and other logistics constraints.
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Filed Under: canada, customs, shipping
Companies: amazon, zappos
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APC is another one that comes to mind... while they sell their products in Canada, they will only honor the warranty if you pay full 2-way shipping including custom fees.
Or, they could do like Newegg, TigerDirect, etc... and simply open an office in Canada. They still ship through the US without any delays.
How come others can but they can't? It's because they won't.
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Zappos has a mission statement of providing the highest service level possible. If they cannot abide by their mission statement and also make a profit, then there is no reason for them to do business in Canada.
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So.. seriously, don't blame it on "the laws" or whatever. Someone got lazy and mad that it was "too much work" and decided to stop it. I'm sure they'll end up regretting it.
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That being said, it's completely within the rights of every country to impose whatever rules they feel necessary/desirable on imports. And it's within the rights of every company to license their goods using whatever criteria they feel will best benefit their bottom line. No matter how stupid it seems to the rest of us. :)
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DS, you got it right. it doesn't matter if it's Canada or any other country - when you have to move things across the border, there will be hassles. Trying to return something from Canada to the US is a work of frustration that most people will give up. The US customs paperwork, the declarations, the proof of "not a sale" for tax purposes, that sucks. Further, any money spent at customs to get the piece in originally is not easily recoverable.
Zappos could have easily opened a Canadian distribution center, done the distribution in Canada from there. But then it wouldn't have been just the expense of a website and a few Canadian flag graphics, they would have actually had to build a business. That didn't work out for them.
So Mike, customs is the same for everyone, the real problem was a business model that fails to consider it.
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a problem
My company ships to the US and never has a problem. It seems zappos has a problem with distribution agreements and not customs.
The post on zappos is very vague.
And not fair for Canadians with gift certificates/credit having to redeem them by April 1st.
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Re: a problem
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More paperwork? Damn, I have to sign the customs paper too instead of just the packing slip!
So if Zappo wasn't able to meet their goals, then they should have probably revised their procedures, and the people making those procedures.
I worked for a place that preferred doing the stupidest things with no oversight instead of firing the person(s) doing those stupid things. When sh*t hit the fan, they realized it, fired the idiot(s), and had to backtrack through it all. Cost a lot of money and countless work hours to fix the entire mess.
I hope that's not Zappo's case.
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Shipping across the border
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I had always assumed shoes were "region-free"
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Like how Stevie Nicks blows her nose now.
(Plus, it was more like 15 minutes. So... worse.)
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Re: Re: I had always assumed shoes were "region-free"
I was sad because I had no shoes until I met a man whose feet were still held up in customs.
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I quit too
They don't charge duties for US made items, but they still do for every other non NAFTA nation in the world - it doesn't matter if it's new or used to them.
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Re: I quit too
Most goods are duty-free. I've bought things from Singapore, Europe, Japan, Australia and have yet to pay a duty. There will be GST/HST on the declared value of the good. The biggest difference in cost is in who you use to ship the goods and what service level you choose.
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An example? The domain registrar, named after a pair of ruminants, that sends out fake renewal notices for domain names it does not control to affiliates who moved their clients names away years ago due to that registrar stealing renewal commissions. There is no practical way to bring them to justice, unless they suddenly become dumb enough to sue for libel in a USA court (oh, please, please, please) and subject themselves to US jurisdiction.
Another example? There's that Canadian alleged senior home exchange service that collects fees for vacation home swaps but does not provide service and ignores refund demands because they . . . fill in the rest yourself.
Conclusion? Do business with ANYone in Canada at your own risk.
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Re: Canada at own risk
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Zappos Blaming Everyone But Themselves
I've ordered products online from a multitude of foreign companies and have yet to encounter a customs or logistic issue. Amazon.com, eBay, individuals and so on. No issues.
This is a classic case of an American company thinking that they can transplant their model in America to Canada (think Papa John's and Krispy Kreme). When they don't do their homework and it doesn't quite work out, they blame someone else. Plenty of foreign companies have no "customs and other logistics constraints" in Canada.
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Re: Zappos Blaming Everyone But Themselves
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Yet while this really is a problem, it's not just 'oh, that Canada.' It may be economic protectionism overriding common sense about free trade, but we also have a long history of generally doing whatever the US does, or would like us to do. In this case, perhaps we have to put on a good show to look like good 'anti-terrorism' neighbours.
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in most contexts, when it comes to free trade, common sense would consider things on a city-region level, not a national one, and tell you that free trade is a great way to gut your city-region's ability to actually function and grow over the long term. (hyper-specialisation leads to massive profits followed by stagnation, then colapse. free trade greatly encourages hyper-specialisation.)
(check out Jane Jacobs books on the economy of cities (that's actually the title of one of them) for the logic, and David Orrell's Econo Myths (or possibly economyths. the way it's written on the cover is a bit confusing.) for why common sense and current mainstream economic theory have little or nothing to do with each other.)
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Get serious, this is more of Hollywood's doing....
And for this special offer the Media Mafia are only asking for double the retail price for these approved format songs and movies..... a small price to pay to support your country, eh?
Sure, I'm probably kidding, or my tinfoil hat's a little loose this morning, it's hard to tell sometimes
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Typically it is the courier that is at fault
Duty rates can vary from 0% (duty free) to 20%, depending on the type of goods. So much for any free trade agreement.
As for Brokerage Fees it is the courier company that is charging you for providing customs service: being your agent when "clearing" your parcel across the border. This fee can run $40 or $50 dollars (or more), even when purchasing a $20 item.
There are a few ways to avoid expensive brokerage fees. Purolator Shipping typically includes all applicable taxes, duties, and brokerage fees, and they show you the final price that you will pay. Another method is choosing United States Postal Service (USPS) as a shipping option; Canada Post will only charge a $5 (or $8 if express) brokerage fee (payable when you pay any applicable taxes incurred). Other good options are FedEx Priority or UPS Expedited. These shipping options have brokerage fees included. Avoid UPS/FedEx Standard or Ground. Standard (also known as Ground) shipping plus brokerage fees will cost more than the Priority or Expedited options.
Some times you pay a bit more for a better shipping option buy you save more than that in the Brokerage Fees. A co-worker just bought a $5000 scanner and paid the cheapest possible shipping charges and was shocked when the Courier Company wanted $2800 in in Brokerage Fees, Taxes, Duty, Cross-Border Tax (what ever that is).
It sometimes hard, if not impossible, for the typical Canadian consumer to buy from the US and know the final cost at the time of purchase. It helps to read and know the Canadian Border Services Website (http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2008/01-99/tblmod-1-eng.html). Even then if you are stuck with a courier service that demands money they have the power and you have no product and existing financial investment.
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Other issue is with American Customs, but that's a problem that no one can fix, they are so screwed up since 9-11.
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But but but...
Thomas Friedman told me so!
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Not surprised
The CBSA is doing a good job of killing commerce.
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I seems like every time I go to the UPS Depot I run into a Canadian picking up a hold at center delivery.
The same item that you pay $20 for in the USA is $30 to $40 in Canada.
Customs is a real pain in the ass for your average person trying to do business in Canada.
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That is disappointing. Of course, it would be nice if Americans would stop blaming us for things like terrorism.
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In general, Americans love our Canadian brethren but realistically, the evil headed governments that rule our countries cause a lot of unnecessary grief for us all.
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So many comments ... so little information
First of all In addition, we have struggled with general uncertainty and unpredictability of delivering orders to our Canadian customers given customs and other logistics constraints. The customs transition between the U.S. and Canada is not labourious. The problem comes in the handoff between USPS and Canada Post. I ordered sewing patterns for my wife that took 29 days to get from California to Alberta through USPS and Canada Post. I order a cane, as a prop, from Indonesia and it took 61 hours to get to me via DHL courier. Shipping cheaply is the wrong way to go when trying to ship between countries. This is one of the primary reasons why organizations set up shipping centres in Canada so that this hassle can be avoided.
Second, many American companies have Canadian subsidiaries or have given exclusive Canadian distribution rights to another company. In those cases Zappos is legally bound not to ship to Canada unless it purchases the product through the Canadian subsidiary or distributor. This is due to the manufacturers requirements, not Zappos or the Canadian government. Failure to follow these requirements can result in having the products seized at the border at the request of the company or distributor. There are tens of thousands of items on Amazon.COM that Amazon will not ship to Canada due to these requirements. Does everyone follow these rules? No, but there are risks as my brother found out when trying to buy some electronic gear last year that was in short supply in Canada. It was seized at the border and he lost his money.
Third, TANSTAAFL (There Ain't No Such Thing As A Free Lunch). Free Shipping and Free Returns cost money and that is factored into the cost. It's worse when you are being ripped off. For instance the same parcel that Zappos could ship within the US for $14.95 costs $35.50 to ship to Canada. On the reverse side, that same parcel would cost $23.50 to ship from Canada to the US and $15.35 within Canada. Inter country shipping agreements are costly and, based on some high level research, one country seems to be making an abnormally large profit margin on shipping.
I could go on, but hopefully you see my point: Canada Customs is actually the least of the issues between Canada and the US, USPS is actually much bigger.
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Re: So many comments ... so little information
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Re: So many comments ... so little information
Also, shipping within Canada is actually the most expensive (by quite a bit I believe), more than either shipping to or from the U.S.
USPS also has it's own problems, one of them being they aren't charging enough
http://www.dailyfinance.com/story/losing-money-isnt-the-u-s-postal-services-only-problem/193 79758/
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It took me weeks to get a laptop battery across the border because of all kinds of crazy rules to get it into the US. I could have easily tossed it on my passenger seat, drove an hour to the border, crossed and dropped it in a mailbox instead and saved myself a huge headache caused by imaginary lines.
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fırçasız oto yıkama ürünleri
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As someone who deals with customs...
First, Canadian Customs didn't create problems unless the American side did. Since 9-11, the American side of customs has been a constant problem in all regards, thus, the Canadian side has decided they will be just as big of jerks as the American side. Almost always when the USA does something to negatively impact Canadian shipments into America, the Canadian side retaliates by causing problems for American shipments coming into Canada.
Second problem, who the company uses to ship. If they use UPS, which far too many American companies do to ship to Canada, UPS charges excessive fees for shipments into Canada, often claiming high customs fees or duty when in fact they are actually just ripping people off. I know the amount of work that needs to be done and how hard it is to clear a shipment, and trust me when I say that they are ripping people off big time. Add onto that the UPS is often late with deliveries and destroys packages, if you even get them at all, and you have a shipping nightmare.
These two reasons are the cause of many problems when shipping from America into Canada, and neither are a problem of Canada Customs. American Customs and UPS are the two biggest problems for retail customers in Canada. Good luck fixing either of those problems.
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Re: As someone who deals with customs...
Having said that I think Zappos is not being truthful or has incompetent people running this part of the operation. I see a ton of merchandise purchased online come to Canada from the US everyday. Its not that difficult to figure it out if all these other companies can do it.
Customs often develops MOUs with different courier companies and we have the LVS Courier program which allows Couriers like FedEx and UPS to clear shipments under 1600 really quickly with minimal hassle. Thats how most companies ship to Canada.
Also, many companies have a premium service that includes the brokerage fee...They pay the duties and or taxes on your behalf and then you pay them back.
Seems to me like Zappos probably has an alterior motive or it just wasn't profitable enough to ship to Canada.
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Solution to this madness
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Candian Shipping
Zappos' business model offers free shipping with a US delivery commitment of 4-5 days (i.e., Free Ground shipping)
Ground shipping does not include customs brokerage and clearance. Problems(process) occur once when the package crosses the border to Canada. The Canadian recipient/customer has to designate a broker to clear their shipment through Canadian customs (if a broker has not been previously designated). The broker will assess the brokerage fee, duties (VAT-value added tax, PST-provincial sales tax, etc...). Delays happen when there is not instantaneous electronic communication between broker and carrier. In many cases, the paperwork is physically picked up by the broker (this can be same day or 1-2 days, depends on the broker) after the carrier informs them they need to clear a package...Within this time frame the broker either will bill recipient the duties and taxes or attempt to collect the funds before returning paperwork to carrier for completion of the delivery to recipient/customer.
Before all of this, the shipper/seller has to make sure they complete a Canada specific Canadian government approved commercial invoice for the shipment. The rest of the worlds customs/governments accept the generic Commercial invoice.
I omitted a lot of detail but honestly, shipping to Canada is more difficult than shipping to any other country. The shipper has a more programming for IT integration for Canada to their webcarts and have to anticipate more customer service time to field Canadian calls because of: customs clearance delays (perceived as carrier or shipper delays) and the bill for duties and taxes arrives in mailboxes well after the shipment arrives. Sometimes months after the delivery of the shipment and if the customer refuses to pay the bill or forgets, the collection of duties and taxes revert to the shipper of record. If your customer base in Canada is such that they tend to ignore your calls when attempting to collect the duties and taxes they failed to pay, you make will eventually come to the same conclusion Zappos did.
Remember, express shipping although more expensive, includes clearance and delivery so you will get what you ordered much faster (and maybe the overall cost will be cheaper) but the duties and tax bill will still follow unless the shipper has billed you for them upfront.
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Duty on items coming into Canada
In the last five years of ordering from the US only one item was assessed an import cost which I paid. All other items have come through without a problem.
It’s not just UPS anymore charging ridiculous importation fees anymore. I stopped buying from any US merchants who shipped via UPS.
Now it looks like more US companies are getting in on the game of dipping their hands in our pockets. US corporate greed I suppose.
I’m pretty much to the point where I won’t be buying very much from the US any more. I’d rather give my money to a Canadian company.
Spread the word. We Canadians shouldn’t be ripped off this way by US companies.
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Canadian Market in General
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Zappos and Canada Customs
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