7 ways Canadian importers reduce risk when ordering overseas

Canadian importers order overseas and source internationally to access opportunities, expand product availability, and acquire goods not available locally. Leveraging global markets can significantly reduce per-unit costs and create a competitive advantage.

However, international sourcing also comes with risks, including potential financial, logistical, and regulatory issues. Canadian importers can take action to reduce risk before investing in a large order. 

1. Vet your supplier and carrier thoroughly

Before placing any orders, it’s essential to thoroughly vet both your supplier and the carrier handling your shipment. As the importer, you are ultimately responsible for the accuracy and compliance of your goods, including some mistakes that originate from the supplier.

You can confirm the supplier’s legitimacy by reviewing references, examining third-party audits, or arranging meetings that provide insight into how they work. Before making a big order, request detailed product specifications or a sample. 

Working with a reputable freight forwarder can help evaluate routing options and assess the carriers involved. Putting effort into vetting upfront reduces the risk of quality issues, shipping complications, and even fraud.

2. Pay attention to potential differences in business culture and communication

Business practices can differ significantly from one country to the next, and even between two provinces or states within the same country. The basics of business transcend borders, but potential differences arise in the way these basics are conducted in another culture and language.

Offshore suppliers may have cultural norms around negotiation, timelines, and payment expectations that aren’t found in Canada. Some cultures may approach decision-making with greater patience or different forms of commitment during negotiation.

Understanding how your supplier communicates, how they approach deadlines, and how they handle conflict or change can help you set realistic expectations on both sides. This awareness reduces the risk of misunderstandings, strengthens the working relationship, and helps ensure your shipment progresses smoothly from production to departure.

3. Use safe and secure payment methods

Financial mistakes made abroad ultimately fall on the importer, so it’s essential to put strong safeguards in place. Start by using secure payment tools such as letters of credit or escrow services, which add a layer of protection when working with new or unfamiliar suppliers.

Whenever possible, avoid large upfront deposits to reduce your exposure if issues arise. It’s also important to establish clear contract terms that cover product specifications, delivery dates, penalties, and each party’s responsibilities. Overall, developing a consistent payment process that follows international best practices will help you minimize risk and protect your business.

4. Understand export requirements in the source country

Some countries require specific documents before goods can be exported, such as export licenses, inspections, certificates of origin, or special paperwork for certain commodities. If any of these documents are missing, your shipment may be unable to leave the origin country, or could be stopped at the Canadian border upon arrival. To avoid delays or compliance issues, your freight forwarder or supplier should clarify all documentation requirements well in advance.

5. Confirm you comply with all Canadian import requirements

Before your goods leave the country of origin, it’s essential to confirm whether they require any Canadian permits, certifications, or licenses. Depending on the product, you may need approvals from agencies such as the CFIA, plants, and wood products; Health Canada for consumer goods, pharmaceuticals, and cosmetics. Many goods must meet specific marking and labeling rules, including accurate country-of-origin labels, bilingual requirements, and safety markings where applicable.

Certain products must also pass Canadian testing standards. Common examples include electrical goods, toys, textiles, batteries, and other regulated items. If these requirements are overlooked, your shipment may be refused entry into Canada, held with costly storage fees, or forced into expensive rework such as relabeling or retesting. Verifying compliance before the goods depart helps prevent delays, unexpected expenses, and import complications.

6. Prepare for duties and tariffs

Many goods sourced from Asia or non-FTA countries are subject to Most-Favoured-Nation (MFN) duties. To avoid surprises:

• Check the correct HS classification for your goods.
• Verify whether a free trade agreement applies (e.g., CPTPP may reduce duties on many products from participating countries)
• Consider tariff relief strategies such as end-use tariff items or duty drawbacks.

Accurate HS classification and origin documentation are essential for compliance and cost control.

7. Expect the potential of CBSA examination for your initial imports

The Canada Border Services Agency (CBSA) often places extra scrutiny on shipments that are new to the Canadian import system. This includes goods from first-time importers, the first shipment from a new supplier, or the first time products arrive from a particular country. These initial inspections help ensure that all documentation is accurate and that imported goods comply with Canadian regulations. To minimize delays and reduce the risk of penalties, it’s critical to have a complete set of documentation ready in advance. This should include commercial invoices, packing lists, HS codes, and any required permits or certifications. Being fully prepared not only speeds up the inspection process but also demonstrates professionalism and compliance, making future shipments smoother and less likely to attract additional scrutiny.

Take advantage of importing opportunities with an experienced partner

International sourcing can unlock better pricing and a global variety of products in demand, but it also comes with risks that importers must manage and mitigate. An experienced partner in Canadian importing and trade can help to avoid potential issues when sourcing products overseas, ranging from customs and compliance to freight forwarding and trade consulting.

Let an experienced professional handle the details, mitigate risks, and ensure seamless importing compliance for your business. Contact one of our customs brokers to learn more.

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