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 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.

Product selection on 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.

While this is just one e-commerce outlet (albeit a subsidiary of, 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.

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Companies: amazon, zappos

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Comments on “Zappos Gives Up On Canada Due To Customs Problems”

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Anonymous Coward says:

Re: Re: Re:

If it really was, they’d go the extra mile. Plenty of much smaller companies offer full service in Canada without any problems. They just don’t want to deal with it.

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.

Qritiqal (profile) says:

Re: Re: Re: Re:

There is really only one reason a corporation would choose NOT to do business in a country and that is if they cannot do so profitably.

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.

Anonymous Coward says:

Re: Re: Re:2 Re:

As stated previously, it’s because they won’t, not because they can’t. Other companies strive to offer the best service possible (like newegg) and offer excellent service. They are a US-based company. They offer next-day shipping, and it works, even from LA to the opposite end of Canada.

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.

DS says:

Re: Re: Re:

Why? Easy. It’s not an easy game (or cost effective game) to send individual packages through customs for every single order. It’s cheaper and easier to set up shop, buy from Canadian suppliers, and ship from a Canadian location. It has nothing to do with any sort of ‘protectionist’ policy, but is the reality of shipping product over any international border.

Punmaster (profile) says:

Re: Re: Re:

Love the irony – in fact, it’s far easier for Canadian companies to open branches in the US than it is to deliver over the border, too. Customs and licensing is a pain for goods going both ways.

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. 🙂

Anonymous Coward says:

Re: Re:

Sounds like instead of opening a branch in Canada, they just decided to ship to Canada.

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.

SUNWARD (profile) says:

a problem

I order from and many other sites and have no problem with ordering from the US.

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.

Anonymous Coward says:

Re: Re: a problem

Then you’re doing it wrong. We ship daily to the US and get shipments daily from the US. Not much extra costs (we still save over Canadian distributors) and we get our parts the next day. Even locally it wouldn’t have been that fast.

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.

Bashful says:

I live in Canada but spend a lot of time in the US. Last month I was in the US and bought an allersac from a Canadian website, it arrived in 5 days no problem. This month I’m in Canada, just received a camera I ordered 8 days ago from a US site no problem. Zappos obviuosly didn’t do it’s homework. beong a successful ecommerce site in the US is fairly easy, huge customer base, cheap shipping, no licensing problems. But going international is another story.

Rick says:

I quit too

I used to sell to Canadians on eBay, but I pulled out too. Reselling a used item has incurred customs charges as high as $180 for me before – just because the item originated in the UK or Germany.

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.

Vincent Clement (profile) says:

Re: I quit too

Why would you incur customs charges reselling an item? I sell things through eBay and other venues and have never incurred any customs charges.

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.

Anonymous Coward says:

Oh Canada, the next door neighbor who speaks the same language, but laughs at us to our face, is a haven for petty and not-so-petty rip-offs because they are close enough to collect money but a border too far for recovery from crooks.

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.

Anonymous Coward says:

Re: Re:

Wow, two examples to paint 33 million people as untrustworthy. I guess if I watch a couple videos on U tube about rednecks, firecrackers and too many beers, I can paint the USA with a similar brush stroke? Ignorance is a disease – cure it, come to Canada meet some people at least before you throw a whole nation under the bus!

harryr3636 says:

Re: Canada at own risk

Wow. 2 examples of con-jobs in Canada, and we should do business at our own risk. Don’t you sit back for a second and look at whatever country you’re from and think you might be able to find 2 examples of a con-job with a Google News search? Welcome to planet Earth. It’s not unique to Canada.

Vincent Clement (profile) says:

Zappos Blaming Everyone But Themselves

Mike, you are dead wrong about not being to reliably order e-commerce products. I had no problems ordering and receiving cables from a few months ago.

I’ve ordered products online from a multitude of foreign companies and have yet to encounter a customs or logistic issue., 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.

Mike Markovich (profile) says:

There are a number of things which I have wanted to purchase, found on, only to discover that they don’t ship it to Canada. Moreover, if I can find it on, it’s almost always substantially more expensive.

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.

Chargone (profile) says:

Re: Re:

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.)

Anonymous Coward says:

Get serious, this is more of Hollywood's doing....

If they let those pesky Canadian’s order anything they want off the internet, they won’t have any money left to give to the Media Mafia when they come asking people to repurchase the songs and movies that they in the ‘NEW Government Approved Canadian Format’ (Canadian format means that songs and movies have been edited to add ‘eh’ with the appropriate accent, at the appropriate places to make them seem more Canadian….)
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

Jimr (profile) says:

Typically it is the courier that is at fault

The Canadian Custom rules are strange but the most interest is the brokerage fee. The Brokerage fee is a random number pulled out of the air. A friend who owns a business order well over 100 times from the US to Canada the exact same item from the exact same place – the brokerage fee ranged from zero dollars to well over $200. Some courier are more consistent in the fees but sometimes you are just out of luck.

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 ( 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.

Michael Masella (profile) says:

Re: Typically it is the courier that is at fault

You can actually setup an account with a broker with a standard flat fee. If the value is 100$ or 100 000$ you can pay the exact same price. Like I said before, a little homework is all that’s needed to be done to ease the process. We ship to and from the US and around the world every day. If you have the docs in order customs is not an issue.

ScytheNoire (profile) says:

Re: Typically it is the courier that is at fault

Exactly what I said (down at #54), it’s the carrier and their brokerage fees that are the problem. Don’t do business with companies that use UPS or FedEx. In Canada, use Puralator or Canada Post (USPS).

Other issue is with American Customs, but that’s a problem that no one can fix, they are so screwed up since 9-11.

Anonymous Coward says:

I live right along a major border crossing point with Canada.
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.

James says:

More than likely, their “distribution agreements” contains some sort of non-compete clause from their suppliers. If I’m Nike for instance, I may want to cut out the middle-man (Zappos) and sell the latest and greatest running shoes direct to Canadian customers via Then when the latest and greatest are no longer selling so well, dump them off on Zappos.

Zangetsu (profile) says:

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.

crade (profile) says:

Re: So many comments ... so little information

The customs check takes about 3 weeks, and doesn’t happen on ever parcel. I have ordered lots of stuff through Canada Post and 90% comes within 2 weeks, and 10% or so of the packages take up to 3 weeks extra time (the ones searched by customs). The couriers I think seem to get hung up in customs less often (or not at all? not sure) but they charge you a really high “handling” fee upon receipt of the package for taking it through customs for you. (You also always have to play stupid tag games with them to get your stuff but thats another story)

crade (profile) says:

Re: So many comments ... so little information

Also, on the cost side, Canada simply has more area to cover with significantly less people paying for mail in it.

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

crade (profile) says:

This seems a bit strange to me.. I guess if you are comparing shipping through customs to shipping only within the U.S. then yeah it would be more difficult but I really don’t see how this would be news to anyone.. Now if Zappos was shipping to Mexico, Cuba, Asia, Africa, etc and Canada was the only one shut down because our customs was slow or something that would be news.

Grimby says:

I work for a Canadian company and US Customs in a much larger pain in the arse than Canada Customs are.

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.

ScytheNoire (profile) says:

As someone who deals with customs...

I’ve worked for ten years as a customs broker and shipping specialist and can tell you the main problems with shipping from the USA to Canada.

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.

Customs Info (user link) says:

As someone who deals with customs...

I work for Customs and I couldn’t agree more. I hear horror stories about people getting blindsided by the fees for brokerage services they never signed up for. Many complain about UPS. They make self clearance difficult.
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.

Alex says:

Candian Shipping

There are a few reasons for Zappos’ issues with Canada and it is not unique to Zappos. There are 2 common denominators for the majority of these issues when using FedEx and UPS : 1) Using a GROUND service shipping to Canada; 2)Canadian customs/brokerage when using the ground service.

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.

Daryl MacKay says:

Duty on items coming into Canada

I don’t know if anyone has notice but there seems to be a conspiracy toward Canadians now. Both ebay and Amazon are charging us import charges at checkout. I’ve never seen these charges before so it looks new to me.

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.

business owner says:

Canadian Market in General

The Canadian market itself it not worth much, Canadian online businesses startups are either having hard time or closing permanently due to several factors : major local shipping company Canada post is far from really seizing the opportunity here, their customer service to online businesses is one of the worst and overpriced in the online business world. Canadian consumers are not as early technology adopters as their american counterparts, we run several marketing campaigns where we had zero responses from Canadian consumers but good response from American consumers, let’s just say starting an online business in Canada for Canadians exclusively isn’t worth a shot either, imagine a giant like zappos bailed out, what about small business ? may be some government incentives should be put in place.

Barbara says:

Zappos and Canada Customs

Canada Customs is a pain in the A$$. I recently ordered a $30 item from the US and after custom duties and shipping it cost me $100. Whatever happened to that Free Trade agreement we signed with the US and Mexico? I disagree about not having a problem ordering things from There are lots of items I’ve tried to get only to get a message that “this item cannot be shipped to Canada”. I have used but they don’t have all the items that has. It’s annoying and it’s expensive and it’s one thing about Canada I dislike.

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