Where your inventory physically sits is one of the quietest but most consequential decisions in cross-border e-commerce. It determines how fast you can deliver, how much you pay to ship, and whether every order gets taxed at the border. Here’s how to think it through.

The core principle: inventory close to customers wins

Two numbers decide most of your customer experience — delivery speed and shipping cost — and both are driven by the distance between your stock and your buyer. Hold inventory far away and you pay in slow transit and high per-order freight. Hold it close and you get domestic-speed delivery at domestic-shipping cost.

Since the end of US de minimis (see The End of De Minimis), there’s a third reason: shipping each order across the border now triggers duties and formal customs entry every time, while holding inventory inside the destination market means customs is handled once, on your bulk import.

So the real question isn’t "US or Canada?" — it’s "which markets do I serve, and where does inventory need to sit to serve them well?"

Serving US customers

If most of your customers are in the US, you want inventory in the US. That gives you:

• 1–3 day domestic delivery instead of international transit
• Lower per-order shipping cost
• No per-order customs event — duty was handled on the bulk import
• Eligibility to feed Amazon FBA cleanly (see FBA vs FBM vs 3PL)

A US facility positioned near your demand — or centrally, for balanced national coverage — is the backbone of serving the US market competitively.

Serving Canadian customers

Canada is not served well from a US warehouse if you’re shipping order-by-order across the border — you pay border friction on every parcel and lose delivery speed. Holding inventory in Canada gives you:

• Fast domestic Canadian delivery
• No per-order border crossing
• A local base for Canadian returns (see Cross-Border Returns)
• The setup to handle Canadian compliance and labeling locally (see Selling in Canada)

Serving both: the case for a warehouse on each side

Brands with meaningful demand in both countries usually benefit from inventory on both sides of the border. The logic is simple: you stop paying to cross the border on every single order. US orders ship from US stock; Canadian orders ship from Canadian stock; the border is crossed once, in bulk, when you replenish — not thousands of times, one parcel at a time.

This is why TXG operates in both countries — Oakville and Etobicoke in Ontario, and Buffalo in New York — so brands serving North America can keep inventory close to customers on each side and avoid per-order border cost entirely.

How much to hold where

Positioning isn’t just which warehouses — it’s how much stock in each. A few practical guidelines:

• Follow your demand split. If 70% of orders are US, weight inventory accordingly.
• Account for replenishment lead time so a fast-selling SKU doesn’t stock out in one country while sitting in another.
• Watch storage cost vs. speed. More locations mean faster delivery but more places to hold (and pay for) safety stock — there’s a balance, and it shifts as you grow.
• Start focused, expand deliberately. Many brands begin with a single warehouse in their strongest market and add the second once volume justifies it.

The role of one inventory view

Splitting inventory across countries only works if you can see it in one place. Fragmented stock across warehouses with no unified view leads to stockouts in one market and overstock in another. A fulfillment setup with a single dashboard across all locations and channels is what makes distributed inventory an advantage rather than a headache.

FAQ

Should I store inventory in the US, Canada, or both?
It depends on where your customers are. Serve mostly US customers from US inventory; serve Canadian customers from Canadian inventory. Brands with real demand in both usually benefit from a warehouse on each side of the border to avoid per-order border cost.

Why not just ship all Canadian orders from a US warehouse?
Because shipping order-by-order across the border means border friction, duties, and slower delivery on every parcel. Holding inventory in Canada lets you cross the border once, in bulk, and deliver domestically.

How did the end of de minimis affect warehousing decisions?
It made local inventory more valuable. Per-order cross-border shipping now triggers duties and formal customs entry each time, while bulk-importing into a local warehouse handles customs once and enables domestic-speed fulfillment.

How much inventory should I keep in each country?
Weight it to your demand split and account for replenishment lead times so fast movers don’t stock out in one market. Many brands start with one warehouse in their strongest market and add a second as volume grows.

Do I need one system to manage inventory across warehouses?
Yes. Distributed inventory only works with a unified view across all locations and channels — otherwise you get stockouts in one market and overstock in another. A single dashboard is what makes multi-warehouse fulfillment an advantage.

Serving the US, Canada, or both and deciding where inventory should sit? TXG warehouses on both sides of the border with one view across all your stock. Get a fulfillment quote →