How to Start Dropshipping in Canada: Everything You Need to Know

Dropshipping has become one of the most talked-about business models in Canada, and for good reason. It’s one of the easiest ways to get into ecommerce (no warehouse, no inventory, and way less upfront risk).

With a simple model, low startup costs, and the flexibility to operate from anywhere, it’s an appealing choice for aspiring entrepreneurs. However, the execution (especially in Canada) involves major decisions regarding suppliers, tax rules, shipping expectations, and compliance.

In this article, we’ll walk you through every aspect of dropshipping in Canada, from legality and registration to taxes and practical setup so that you can start with confidence.

Let’s get right in. However, first, let’s discuss what dropshipping is.

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What Is Dropshipping (And How Does It Work)?

Dropshipping involves selling products on your online store without stocking them yourself. When a customer places an order through your store:

You’re the middleman, but you control the storefront, branding, pricing, and customer experience. It’s simple on the surface, but success requires careful niche selection, reliable suppliers, and a brand-focused approach.

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Is Dropshipping Legal in Canada?

Yes, dropshipping is legal in Canada.

No laws are stopping you from selling products online through a dropshipping model. But just like any other business, you still need to follow specific rules:

• You need to register your business (we’ll talk more about that below).
• You must follow Canadian consumer protection laws (no misleading ads, no questionable return policies).
• You’ll need to collect and remit taxes if you’re earning over a certain amount.

The most important thing is to operate like any other e-commerce business, being transparent and professional.

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Does Dropshipping Work in Canada?

Yes, it does.

Revenue in the Canadian ecommerce market is projected to reach US$72.15 billion by the end of 2025. This indicates that the Canadian ecommerce market is growing rapidly, and although we don’t have the population size of the U.S., our buying power is substantial.

Here’s what works in Canada’s favour:

• Less competition from global sellers (especially if you tailor to Canadian needs)
• High trust in online shopping
• Loyal local shoppers, if you offer fast shipping and transparent pricing

But there are also challenges:

• Longer shipping times if you use overseas suppliers
• Import duties if you’re not clear about shipping terms
• Customers expect clear communication in CAD, with Canadian-friendly return policies

So yes, dropshipping in Canada works, but localizing your brand (even if you’re not physically in Canada) gives you an edge.

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How to Start a Dropshipping Business in Canada: Step-by-Step

Let’s walk you through the whole process of starting a dropshipping business in Canada (from idea to launch).

Step 1: Choose a Profitable Niche (Not Just a Trendy One)

Begin by exploring gaps and opportunities in Canadian demand. Many first-time dropshippers pursue the latest “trending product” they've seen on TikTok. However, that usually leads to short-term hype rather than a genuine business. 

Instead, focus on:

• Products that solve a real problem (Example: posture correctors, travel gear, eco-friendly alternatives)
• Items that are lightweight and low-risk (Avoid breakables, electronics with complex specs, or anything oversized)
• Niche-specific categories where you can build a loyal audience (like skincare for sensitive skin, dog gear for big breeds, or sustainable kitchen swaps)

Do your research. Use tools like:

• Google Trends (set to Canada)
• Amazon.ca’s Best Sellers
• Facebook or Reddit groups in your niche

And remember, Canadians shop differently. Local culture, seasons, and expectations matter. 

Step 2: Pick a Dropshipping-Friendly E-Commerce Platform

Now that you know what you’re selling, you need a place to sell it. Your best bet would be to start with a reliable ecommerce platform. 

For Canadian dropshippers, these are the top platforms to use:

• Shopify: It’s Canadian, beginner-friendly, and filled with integrations for dropshipping tools like DSers, AutoDS, and Zendrop.
• WooCommerce: Ideal if you already have a WordPress site. It’s flexible, but it requires more setup.
• BigCommerce: These are decent options, although they’re not as widely used in dropshipping.

What to look for:

• CAD currency support
• Province-based tax settings
• Easy supplier and shipping integration
• Mobile-optimized themes

Platform recommendation: Shopify’s probably the best place to start unless you’re already comfortable with WordPress.

Find out more on how to develop your Shopify store here.

Step 3: Find Reliable Suppliers (This Can Make or Break Your Store)

Your supplier will handle everything from inventory to shipping. If you choose wrong, your business will be stuck dealing with complaints, delays, and refunds.

Here are your options:

Canadian Suppliers

Pros: Faster shipping, local credibility, fewer customs headaches

Cons: Smaller product variety, higher costs

Examples: Spocket (Canadian filter), Syncee, local wholesale directories

International Suppliers

Pros: Lower prices, wider product range

Cons: Slower delivery, potential import duties, less control over packaging

Example: AliExpress ‍

Tips for finding reliable suppliers:

• Always test out orders before you commit
• Ask about shipping times to different provinces
• Prioritize suppliers with responsive support

Customers in Canada expect transparency. If your shipping takes 20 days or more, disclose it upfront, or better yet, find a faster option.

Step 4: Register Your Business in Canada

One of the most common questions is, "Do I need to register my dropshipping business in Canada?" The answer is yes, if you plan to turn it into a legitimate business. It also unlocks benefits like tax setup, wholesale supplier access, and business banking.

Here’s what you need to know:

Choose a Business Structure

Most dropshippers start as either:

• Sole Proprietorship: This is easy to set up, has low costs, and income is reported on your tax return. It's great for beginners.
• Corporation: This involves more paperwork, but it offers limited liability and better tax advantages as your business grows. It’s ideal if you're planning to scale.

Register Your Business Name

If your store name differs from your legal name, you’ll need to register it.

• Register provincially if you’re only operating within one province.
• Register federally with Corporations Canada to obtain Canada-wide rights and increased flexibility for expansion.

This can usually be done online in under 30 minutes. Fees vary by province but range from $200 to $400.

Get a Business Number (BN)

Once registered, you’ll get a BN (Business Number) from the CRA (Canada Revenue Agency).

This is essential if you plan to:

• Collect and remit Goods and Services Tax (GST) and the Harmonized Sales Tax (HST)  (required once you earn over $30,000/year in sales)
• Open a business bank account
• Work with legit Canadian suppliers

This may seem like extra paperwork, but it sets you up to run your business legally and handle taxes properly. Plus, it builds trust with customers.

Step 5: Understand Taxes for Dropshipping in Canada

You need to consider two types of taxes:

1. Sales Tax (GST/HST)

If you earn over $30,000 in gross revenue, you’re required to collect GST/HST based on your province and your customers’ provinces.

Your platform (like Shopify) lets you set up tax rules by location. You’ll remit what you collect to the CRA, either monthly, quarterly, or annually.

2. Income Tax

You’ll report business income on your tax return, whether as personal income (sole proprietorship) or corporate income (if incorporated).

It’s important to keep good records of your expenses (like platform fees, advertising, product costs), as this can reduce your taxable income.

If you’re unsure, consult a Canadian accountant with experience in ecommerce. 

Step 6: Build Your Store and Brand

You don’t need to be a designer to create a professional-looking store. Focus on clarity and trust:

• Use a .ca domain if your target audience is Canadian (great for SEO and trust)
• Create strong product pages: clear photos, honest descriptions, shipping details, FAQs
• Include policies: returns, privacy, terms of service
• Make sure your pricing is in CAD

Use Canadian spelling. Add trust badges. Show reviews. Make it feel like a store built for Canada, not something copied and pasted from overseas.

Step 7: Set Up Payment Processing

You’ll want to accept major cards, Interac (if possible), and even PayPal.

Here are some of the top payment processors in Canada:

• Shopify Payments (seamless if using Shopify)
• Stripe
• PayPal

All three can handle CAD and are widely trusted. Ensure your checkout process feels smooth and secure; this directly impacts your conversion rates.

Step 8: Launch, Market, and Learn Fast

So, you’ve got your niche, store, supplier, and systems. Now it’s time to bring in traffic.

Start with:

• Social media marketing (especially Instagram and TikTok)
• Influencer campaigns (look for Canadian micro-influencers)
• Facebook & Google ads (target by region or language)
• Email marketing (welcome flows, post-purchase series)

Track your data, tweak what’s not working, and double down on what is. Use tools like Google Analytics and Shopify’s dashboard to understand what’s converting.

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Common Mistakes to Avoid

Every dropshipping business comes with a learning curve, but some mistakes can cost you time, money, or your reputation. The good news? Most of them are avoidable if you know what to look out for early.

Here are some of the most common pitfalls we see (and how to sidestep them):

Skipping Business Registration and Tax Setup

Many beginners believe they can "test the waters" without officially registering their business or dealing with taxes. It might seem harmless at first, but it’s hazardous, especially once you start scaling or working with legit Canadian suppliers.

Avoid it by:

Registering your business early and understanding your tax obligations, especially GST/HST collection once you cross $30,000 in revenue. 

Relying on Unvetted Suppliers

Your supplier controls inventory, shipping times, and product quality. This means that if something goes wrong, you have to deal with angry customers and refund requests.

Avoid it by:

Place test orders before going live. Check delivery time, packaging, tracking, and the actual product quality. Look for reviews and supplier ratings, and avoid anyone with inconsistent communication.

Using Generic Product Pages

Copying and pasting product descriptions from AliExpress doesn’t work anymore. Canadian customers expect precise, trustworthy, and accurate info, especially when buying from a new brand.

Avoid it by:

Writing original, benefit-driven descriptions. Highlight how the product solves a problem. Use CAD pricing. Add FAQs, reviews, and clear shipping info. Make it easy for your visitor to say “yes.”

Overlooking Shipping Expectations in Canada

Long shipping times, surprise customs fees, or unclear tracking are major deal-breakers, especially in provinces where Amazon Prime has set the standard.

Avoid it by:

Being upfront about delivery times. If you're shipping internationally, make that clear. Bonus points if you can work with Canadian suppliers to reduce wait times and improve trust.

Not Thinking Like a Real Brand

Dropshipping isn’t just about listing random products and running Facebook ads. If you don’t build a brand, it’s easy for customers to forget you, or worse, distrust you.

Avoid it by:

Creating a store that feels intentional. Use a niche, design your site to reflect your target audience, and create a genuine experience. Good branding builds trust, and trust drives sales.

Ignoring Customer Support

Customers will have questions. If your support is slow, unhelpful, or nonexistent, they’ll never come back, and they’ll probably leave a bad review.

Avoid it by:

Set up basic customer service tools: a support email, a clear FAQ page, and an auto-reply to let people know you’ll get back to them soon. It doesn’t have to be fancy, it just has to be responsive.

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Wrapping Up: Build It the Right Way

Starting a dropshipping business in Canada is one of the most accessible ways to launch an online brand, without needing to hold inventory, rent a warehouse, or quit your day job on day one. But “easy to start” doesn’t mean “easy to succeed.”

To do it right, you’ll need more than just a trending product and a Shopify trial. You need structure, strategy, and a long-game mindset.

If you need help launching your store, creating a strategy, or scaling your marketing, simply book a free strategy call with Pro Marketer.

We’ll help you scale your ecommerce business and improve your sales.

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Frequently Asked Questions

Do I Need To Register My Dropshipping Business In Canada?

If you're running your dropshipping store to generate a steady income, yes, you should register it. You can start as a sole proprietorship (the easiest option) or incorporate (for added liability protection and tax flexibility). Registering gives your store legal credibility and allows you to open a business bank account, work with suppliers more easily, and manage taxes properly.

Can I Dropship From Outside Canada?

Yes, you can run a Canadian-targeted dropshipping store from anywhere in the world. However, you'll need to offer CAD pricing, consider tax implications, and work with suppliers that can ship to Canada efficiently. The key is to make your store feel local, use .ca domains, cater to Canadian needs, and communicate delivery expectations.

What Are The Dropshipping Regulations In Canada?

There are no specific regulations for dropshipping, but you must still adhere to general business laws. This includes truth-in-advertising rules, return/refund policies that comply with consumer protection laws, proper business registration, and tax compliance. Selling safe, compliant products is also your responsibility, especially for items such as supplements, electronics, or any products used on the body.