Borderfree to help Canadian online retailers in U.S. market

Canadian e-tailers are often frustrated watching shoppers here take advantage of the prices and selection offered by U.S. online stores.

But a Toronto startup that specializes in helping Americans sell north of the border is getting ready to help our companies sell south.

Within the next 12 months, Borderfree Inc. executives say they hope to start signing up Canadian e-tailers who want to sell to Americans. The idea would be a reverse of Borderfree’s traditional focus, which sells technology to U.S. sites to calculate Canadian duties, taxes, shipping, handling and currency conversion.

“There’s definitely demand,” says Borderfree president Tom Reeves. Not only is the company working on helping Americans buy in this country, its also working on adapting its technology to help British and American consumers buy from each other’s e-tailers.

Borderfree, backed by venture capital from Mosaic Venture Partners, Brightspark Ventures, the Ontario Teachers’ Pension Plan Board, and Torstar Corp., is still developing the software. West wouldn’t say when it would be deployed.

It’s an example of a trend spotted by Forrester Research in a recent study of online retailing in this country. After gaining experience on this side of the border, it predicts, some Canadian e-tailers will leverage their Web investments to sell south.

But companies that aren’t equipped to handle cross-border tax and currency problems could turn to Borderfree for such services, it predicts.

However, a retail expert cautions that only a select number of Canadian stores will be able to sell south. David West, a senior analyst with the J.C. Williams Group said mass merchandisers like The Bay, Canadian Tire and Future Shop won’t be among them. The American market is too competitive for them, he said in an interview. All three have already had their noses bloodied in attempting to build bricks and mortar stores in the U.S.

More likely clients for companies who want to help Canadian e-tailers with currency or fulfillment are firms that specialize in product niches, such as clothes or outdoor gear, said West.

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Howard Solomon
Howard Solomon
Currently a freelance writer. Former editor of and Computing Canada. An IT journalist since 1997, Howard has written for several of ITWC's sister publications, including Before arriving at ITWC he served as a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times.

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