How Canadian Amazon Sellers can save up to $1000/month?
Are you selling on amazon.com from Canada? If yes, you need to read this till the end. In this article, I am going to show you how Canadian sellers can get paid in USD from amazon.
When I first started selling on amazon.com I was using my personal TD Bank account for payments from Amazon. After a year of selling, my business started to grow and I was getting bigger deposits from Amazon. I noticed that I was losing up to $800 in conversion rates.
Then I made a rookie mistake, I went to TD bank and opened a chequing account in USD. That month I lost even more money in conversions.
When amazon transferred money to my account, the currency got converted from USD to CAD and then it got converted twice from CAD to USD. I got dinged by Amazon first and then by TD with conversion rates.
This is how I started to save money on conversion rates……..
CROSS BORDER BANKING
Currently, there are three banks in Canada that offer cross-border banking.
You can save money in these three ways
If you are still a small seller then any of the first three options will work for you. A cross-border account acts as a US account. It allows clients to have a US routing number so funds stay in USD. In other cases, transit or routing is Canadian so funds get converted to another currency.
RBC business account is expensive but it is the way to go if you are planning to grow your Amazon online business.
Let’s take an example if amazon pays you out $10,000/biweekly.
3% conversion rate = $300
Amazon usually pays less than the market rate that can add up to $100.
So total you are losing $400/biweekly and it comes to $800/ month.
WHEN DEALING WITH SUPPLIERS IN CHINA
When making payments with Canadian credit cards to Alibaba or any other country. You are suffering there too with conversion rates. Having a USD credit card or visa debit card will help you save thousands of dollars in long term. Even a few cents difference can be huge when you are dealing with a higher quantity.
Cross-border banking has saved me thousands of dollars which allowed me to reinvest in my business.
If you are still using a Canadian chequing account for Amazon payments, now is the time to switch to cross-border banking.
Let’s say now you have some amount deposit in your USD cross-border account. You can always transfer money to a CAD account. This will help you make some extra dollars when the American dollar goes up compared to the Canadian Dollar.