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Product Pricing for Canadian E-commerce

  • Legal restrictions: Some products are not allowed in cross-border shipments (applies only to those retailers fulfilling from the U.S. and shipping product into Canada). Consult with your legal team for details on items that are restricted. Also note that if you operate stores in Quebéc, all product shipped into Canada is required to have French language labels, hang tags, packaging, and invoices/packing lists (see Chapter 7 for more details).

  • Operational implications: If you are building an e-commerce website specifically for Canada (as opposed to simply allowing Canadian shoppers to request Canadian shipping from your U.S. site), it will be cost effective to leverage assets such as product photography and copy from the U.S. website where possible. If you are planning to carry product that is unique to Canada, be sure to budget for the neces- sary asset creation and management.

  • Product testing opportunities: While likely not high on the priority list for Canadian e-commerce newcomers, some retailers find that a Canadian e-commerce pres- ence allows them the opportunity to test new products and styles on a smaller audi- ence in a less visible forum.

Regardless of the assortment decisions that your make, it is important to forecast sales conservatively in order to avoid costly inventory liabilities. Start gathering historical sales data to guide decisions in future seasons/years.

When pricing product for the Canadian e-commerce shopper, it is important to estab- lish a methodology that is compatible with critical retail back-end systems. The most common approach to Canadian e-commerce pricing is to price product comparably to the U.S., factoring in exchange rates. For example, an item priced at $50 U.S. would be priced at $54.62 based on today’s exchange rate. When determining your approach to pricing, the following should be considered:

  • Brick-and Mortar-synergy: If you have stores in Canada, pricing should be consis- tent or Web pricing clearly stated as “online only.”

  • Seasonal/holiday considerations: Seasonal markdowns and holiday themed sales and promotions should be timed to the Canadian holiday calendar (this will be dis- cussed further in the promotions section later in this chapter).

  • Third-party fulfillment providers: If you are using a solutions provider that offers shipping services (e.g., Borderlinx) or is fully integrated (e.g., E4X) to handle cross- border transactions and fulfillment, the conversion from U.S. to cross-border pricing will be determined by their systems.

Regardless of approach, display Canadian pricing throughout the shopping experience, or as high in the purchase path as possible.

Visa e-commerce cross-border handbook for U.S. retailers

Copyright 2010 Visa. All rights reserved.

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