Worldwide, consumers want Canadian products and services. Demand isn’t really the problem; the challenge is in the details. Tariffs, complex regulations, logistics costs, and knowledge gaps keep many Canadian companies from expanding into international markets.

International trade accounts for around two-thirds of Canada’s Gross Domestic Product (GDP).

Small and mid-sized companies often assume they are “not ready” for international trade, because their managers don’t know how to manage these barriers.

But the right information can help you overcome many trade barriers.

Use this overview to get started. If you want a framework to help you apply this information to your own business, access FITT’s Export Vision Board tool.

4 of the top market barriers to exporting for small businesses

1. Complying with customs rules & regulations

One of the biggest barriers is learning the rules and regulations. Not only do you need to learn Canada’s rules, but you also need to learn the specifics for each country you want to export your products to.

Managing trade compliance certainly adds to your administrative burden, but it’s well worth it for many, even when keeping up with two or more sets of laws and regulations. You must learn and comply with rules covering product safety standards, labelling, and customs procedures.

Surveys by the Canadian Federation of Independent Business (CFIB) show that small firms see “complex regulatory frameworks, compliance requirements and the costs associated with shipping” as major obstacles to trading internationally.

Some businesses respond by leaning heavily on customs brokers and intermediaries (about 80% of trading SMEs do so) because they don’t have the in‑house expertise to manage customs and regulatory requirements on their own.​

The easiest way to break into international trade is through one of Canada’s 15 Free Trade Agreements (FTAs). These FTAs cover 51 countries and could reach a market of more than 1.5 billion consumers. Since treaties are in place, the risk is lower, and it is easier to find information on doing business with these consumers. You will be able to find much of this information through Canada’s Trade Commissioner Service and by networking within the Canadian small business community.

2. Building a smooth-running supply chain

Once you have a basic understanding of some of the rules and regulations for imports and exports in your industry, you need to apply that knowledge to building your supply chain. This basically covers everything from manufacturing your product to getting it into your customers’ homes.

Building a “smooth” supply chain today is less about chasing the absolute lowest cost and more about building a resilient foundation.

If your business masters a few fundamentals, it is easier to adapt if you need to change vendors, partners, or just about anything else.

There are many specific things to consider. For example, shipping costs were identified as the single biggest challenge for SME exporters, now affecting 66% of firms, with currency fluctuations and duties and taxes close behind, according to the Canadian Federation of Independent Business (CFIB)

Canadian businesses that are able to front-load inventory and diversify suppliers are better able to stay ahead of supply chain disruption. For exporters, the message is clear: take time to invest in relationships and the tools you need to manufacture your product and reliably move to your customers.

If this seems daunting, consider that other Canadian businesses have gone through this before, and Canada’s network of economic development organizations can help.

For example, Nova Craft Canoe was a thriving domestic small business, bringing high-quality boats to the Canadian recreational market. They were able to expand, reaching new markets in Denmark, Finland, and Germany. They formed strategic partnerships and worked closely with advisors at Export Development Canada (EDC). Credit insurance reduces the risks of doing business with suppliers and buyers in other countries, freeing Nova Craft Canoe up to find the best partners.

3. Developing language and culture competency

In theory, international markets have never been more open. In practice, exporters and importers have a steep learning curve navigating tariffs, technical rules, and shipping bottlenecks. Yet, language and cultural barriers are among the toughest challenges to overcome.

Often, we focus on more objective and tangible barriers like complying with regulations, pricing that includes tariffs, and supply chain management. Yet, one of the toughest challenges is understanding the culture of your new markets and finding trustworthy translation support (beyond AI) if these consumers speak another language. Packaging, marketing, and documentation all need to appeal to your audience.

Storkcraft is one of the fastest-growing baby and children’s furniture companies in North America, including Mexico. Their marketing team includes staff from Mexico, Colombia, and Peru who offer crucial cultural insights. As your business grows, you will likely need additional staff with specialized expertise.

4. Keep up with taxes and tariffs

Tariffs, duties, and border taxes can change quickly, and that uncertainty hits exporters right in the margins. Historically, the United States has been Canada’s biggest trading partner. Sudden increases or new retroactive charges can make a previously profitable contract unviable practically overnight, especially for smaller businesses.

Uncertainty over the changing tariffs and environment may discourage smaller Canadian businesses from exporting their products.

Despite the changing environment, there are still opportunities for growth in reaching consumers in the U.S. or the many other nations with which Canada has trade relationships with.

Companies like Nova Craft Canoe and Storkcraft work closely with the Canadian Trade Commissioner Service and use resources like the Tariff Finder to ensure they operate with the most up-to-date information.

If you are used to only doing business in your local community or domestically, you will have a steep learning curve when you expand into international markets. Keeping up on taxes, tariffs, laws, and regulations for two or more countries is another ongoing challenge. You can start from a position of strength by completing practical, execution-focused international trade training that builds real-world trade competence beyond high-level theory. If you are already exporting or importing products, the right training will help you fine-tune your approach.

You can also connect with knowledgeable and experienced advisors, such as CITPs, who can support your expansion plans and help you navigate a complex trade environment.

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Brand loyalty is high since IKEA delivers what its customers expect. Despite IKEA’s track record, its team occasionally makes mistakes. In the late 1990s, a failed foray into inflatable furnishing exposed how sometimes an innovative idea isn’t enough.

An exciting idea and promising beginning

Swedish teen entrepreneur Ingvar Kamprad founded IKEA in the 1940s, originally as a small mail-order business selling pens and wallets. By 1948, he started selling furniture, but packing and shipping furniture mail-order was a major pain point. This led to IKEA becoming an innovator and disruptor. It developed quality flat-pack furnishing like shelves and tables. Fast forward to the mid-1990s, Kamprad and his team found it challenging to create a durable, comfortable upholstered sofa that could be shipped flat-pack.

Meanwhile, Swedish designer Jan Dranger had an interest in inflatable furniture dating back to the 1970s when he and his design partner created a range of inflatable easy chairs and mattresses that were briefly sold by the Swedish Cooperative Union (KF). Unfortunately, these furnishings deflated quickly, but Dranger persisted in developing inflatables using better materials and new techniques.

In the early 1990s, he approached IKEA and met privately with Kamprad. He had prototypes for inflatable furniture, including a sofa. The idea seemed promising since this sofa was lightweight, could be shipped flat-pack, and consumers could easily assemble it at home using an ordinary hair dryer. The idea addressed one of Kamprad’s biggest pain points.

Several IKEA managers were invited to an unveiling of these prototypes. When they arrived,  they saw inflatable sofas draped in loose covers. The covers made the sofa more attractive and also helped maintain its shape.

As former IKEA business area manager Tomas Paulsson told the IKEA Museum, “No one was allowed to look underneath the furniture, but we were allowed to sit on it. It felt a bit like an inflatable mattress or water bed.”

Dranger didn’t want to share technical details before signing a contract with IKEA. In theory, the inflatable sofa required 85% less material than a standard sofa, and the plastic material used was 100% recyclable. Especially notable for the team at IKEA, the inflatable sofa reduced transport volume by 90% compared to their existing products. IKEA formed a spin-off company, SoftAir, in anticipation of the line’s success.

In 1998, the Toronto Star reported that a consumer could bicycle home with an unassembled sofa in their backpack, then walk upstairs to their apartment and quickly assemble it.

Laurence Martocq, an IKEA spokesperson at that time, said: “We expect the line to appeal to university students, young people living in apartments and condos and first-time home buyers… We’re also targeting people who look to us for innovations and new trends.”

IKEA launched the A.I.R line in 1998, including an inflatable sofa, easy chair, and an ottoman. The furnishings came with a ten-year warranty, washable slipcovers, and a patch kit. The design featured a series of small air pockets or compartments, so damage to one pouch wouldn’t cause the whole thing to quickly deflate.

How the A.I.R. line….deflated

First, according to Paulsson, it cost more to manufacture the A.I.R. products than originally anticipated. And when they launched the line in IKEA stores, shoppers reacted in unexpected ways.

One selling point was that it was very lightweight. A promotional illustration portrayed someone lifting the sofa with one hand to vacuum underneath. In the stores, this selling point also proved to be a downside. The sofas would easily slide around if someone bumped against them.

Shoppers reportedly picked them up and moved them or even tossed them around the showrooms. According to the IKEA museum, an IKEA team member said they looked like “a group of swollen hippos” compared to the other sleek designs in the stores.

IKEA project manager Lena Brandt Persson said, “Customers found it so much fun that even adults would jump up and down on the sofas.”

It didn’t get better once the inflatables made it to the shopper’s home. The instructions didn’t clearly warn the buyer to use the cold setting on their hair dryer, so some inflated their new sofa with hot air. Not only did this pose a risk of melting the plastic, but it also resulted in the sofas deflating as the inflated hot air cooled down.

It turned out many people didn’t love inflatable furnishings as much as they hoped. When sitting on the chair or sofa, a sudden movement could cause an embarrassing squeaking sound.

Too many of the A.I.R. products were returned. In September 1999, IKEA announced it was ending its involvement in the SoftAir spin-off company but continued to sell the designs. In 2013, they stopped selling the A.I.R line.

Key takeaways and lessons learned

The story of IKEA’s inflatable furniture launch flop can serve as a cautionary tale for other inventors, designers, and entrepreneurs. Sometimes, enthusiasm for an exciting concept can fall short if you don’t back it up with testing and market research.

Deviation from core principles?

Consumers trust IKEA in part because its design honors five core principles: form, function, quality, sustainability, and low prices. The A.I.R. line was an interesting concept. In reality it didn’t hold true to these core principle according to Ikea’s global design head, Marcus Engman, who admits he was partially responsible for it.

He told Sidney News, “This is one of the biggest mistakes in Ikea’s history. An amazing fiasco.”

They missed many of the product’s flaws. So many of the problems would have been obvious if people tested the prototypes for longer, facing real-world challenges.

For example, the team saw the very light weight as a benefit, but a few days of watching the sofa slide around an office or living room may have proved otherwise. They would have also noticed how the furnishings would gradually deflate despite the innovative design.

Engman also commented that they were excited about a product, but didn’t really know how the general public would respond. The designs may not have fit many people’s homes.

“If you want to do new engineering maybe put it into something people can relate to from the beginning instead of something that is such a new form because it’s hard to relate to,” he said.

The missing link: Where product testing failed

The collapse of IKEA’s A.I.R. inflatable furniture line demonstrates the importance of product and testing, even if you have an innovative idea.

Despite promising sustainability benefits—85% less material and 90% lighter shipping weight versus traditional sofas—the series ignored critical market realities. According to the IKEA Museum, prototypes were tested in controlled labs but never subjected to real-world user scenarios.

For example:

• Engineers used ideal conditions (e.g., precise inflation methods) but overlooked how customers might misuse the product. Many users inflated their products using the hot air setting from hair dryers, causing warping and accelerated wear.
• IKEA assumed users would value eco-friendliness over convenience. They failed to anticipate that daily re-inflation and valve leaks would frustrate customers. The “pffft” sounds when sitting became a notorious pain point.
• The 1990s saw IKEA expanding into markets like the U.S. and Asia, yet no adjustments were made for regional preferences.

How to do thorough product testing

This case study illustrates why product testing in real-world settings is so important for anyone interested in international trade. This includes cross-cultural validation and iterative testing.

Products must be tested in the actual environments of target markets with diverse user groups. IKEA’s oversight of these steps turned even an industry pioneer into a cautionary tale.

Rigorous processes would have flagged:

1. Frequency – How often users would need to re-inflate (daily vs. weekly).
2. Intensity – How real-world stressors like pets, children, or humidity affect material integrity.
3. Technical – How well did the valve perform in varied home environments

[This content is an excerpt reproduced from the FITTskills Products & Services for a Global Market course]

Prototype and test marketing offer opportunities to test the product and its performance, and to put the product into a limited, but real-life field situation to collect data for product and marketing plan modifications or improvements. Refinements to initial prototypes, concepts and ideas resulting from customer feedback can also allow engineers, procurement managers and production  designers to better quantify the projected unit costs for the product when it finally reaches production.  

Some techniques that can be used to evaluate consumer response to new or adapted products are: 

• The use of select groups of product users to test prototypes (often referred to as beta testing)  
• Tasting panels (for food products) 
• Product demonstrations at select venues  
• Follow-up with consumers after purchase 

As part of product development and adaptation, product testing is carried out throughout the product life cycle to ensure compliance with specifications and regulations. There is a wide range of product tests.  

Learn more about how and why to test products thoroughly BEFORE bringing them to market.

Get Test Marketing and the 15 Point Market/Concept Assessment Questions templates, the full Product Testing Process and much more – explore Products & Services for a Global Market

FITTskills content adapted from: FITTskills Products and Services for a Global Market. Forum for International Trade Training (FITT), © 2023.

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Leah Sanford has a long-time passion for marketing. She enjoyed her corporate marketing role before taking the leap into entrepreneurship. She now helps other entrepreneurs take their brands global.

Her husband, Joel Kelly, shared Leah’s passion for marketing. He dreamed of starting his own business, and together, they built Kelford, Inc.

Through their company, Leah and Joel work with entrepreneurs to help define and articulate their unique value, and then demonstrate it to their very best customers. She finds joy in helping entrepreneurs from Canada and beyond change the world by helping them communicate in a way the world understands.

“An entrepreneur just has this creative mindset of seeing past the obstacles and wanting to try new things. There’s this creative, innovative space that just clicks a little different for an entrepreneur, and it’s so fun to work with.”

Leah strives to infuse fun and creativity into the process of helping entrepreneurs uncover their goals, define their value, and demonstrate it at a distance. So they can keep going, keep growing, and keep building a business they love.

If a business is online, it’s potentially international

Based in Canada, Kelford Inc. is both a local and an international business, thanks to the ease of connecting online.

“We often work with folks who are located here in Canada but sell around the world,” Leah explained.

“We’ve had many clients around the world trying to enter Canadian markets or other global markets. For us, it’s all about demonstrating your value, globally.”

Whether a business owner offers professional services, or artisan-made products via e-commerce, or deep-tech solutions, they may benefit from global trade training.

“Shopify changed the game, and Amazon before that. And Etsy has been this beautiful creator space on a smaller, more personal, artistic scale of what’s possible. It doesn’t have to be down the street anymore. The pandemic really opened that up from on a global corporate scale.”

Leah developed a more global approach from the Certified International Trade Professional (CITP) designation and international business training through the FITTskills program.

A resource that helps open doors

“I would absolutely recommend the FITTskills program to people who love long-term learning. The program is comprehensive – so in the long term, everything stacks really nicely.”

When the world slowed down during the COVID-19 pandemic, Leah decided to invest time into professional development. Invest Nova Scotia offers training and other resources for entrepreneurs including FITTskills training as a FITT educational partner. Leah took advantage of the opportunity and enrolled in the FITTskills International Sales & Marketing course.

“It felt like this little serendipitous moment that kicked me off on the right journey.”

That moment led Leah toward earning the CITP certification. She found the designation and the FITTskills program incredibly practical and easy to apply to real-world situations. In addition to knowledge, it also helped hone her mindset.

“It’s been a confidence boost. It obliterates that imposter syndrome feeling! It’s a great anchoring ground of knowing what I’m doing. I have the FITTskills textbooks to go back to. I have the knowledge base to go back to. I have the resources to draw on, and the connections that it’s opened up have been brilliant.

The program also offers moments of connection and the chance to network with other professionals and expand valuable international connections. Leah even found a new client who was a classmate in the same FITTskills course. She indicated that when looking for partners, the CITP designation acts as a green flag.

“I know that there’s been a vetting process in that credential. It’s a credential that has a governing body and there’s something really beneficial to that. When you’re evaluating apples to apples, this one suddenly is a little more nutritious.”

Paying it forward and building up other entrepreneurs

Leah jumped at the opportunity to help other aspiring entrepreneurs through the Lab2Market program. This federally backed, multi-agency partnership encourages master’s, doctoral, and postdoctoral-level researchers to gain tools that may help them take their expertise and innovations to the marketplace. Leah is a facilitator in the Lab2Market Oceans programs, through Memorial University.

“We’re focused on ocean innovation and technology. Students are bringing forward ideas and products such as oil spill clean up breakthroughs, improved safe navigation through icy waters tools, new marine coatings, etc. The program is comprised of brilliant students, many international, exploring how they might enter a global market—seeing if there’s a market for their idea. And we educate, and hopefully inspire, them to build businesses and take their innovations forward, while supporting them as they go through the roller coaster of emotions in customer discovery!”

Leah credits both completing the FITTskills training and earning the CITP designation for preparing her to help these scientists develop business skills and entrepreneurial mindsets.

Whether local or global, it’s all about relationships

Leah found that her relationships with clients don’t end with the initial project developing a marketing position and strategy. She likes to keep in touch with clients as they implement their strategy. Kelford also offers a daily inspirational positioning newsletter.

“For us, it’s natural to stay in touch and celebrate their wins. And on the flip side ask, are you struggling with anything? Just let them know we’re here.”

Over the years, Leah and Joel worked with dream clients including Big Cove Foods of Nova Scotia. They came to Kelford with a goal of bringing their spice blends from a local product to stores across the country. After exploring their goals and aspirations, Kelford helped them create an actionable marketing strategy.

As they implemented the plan, they found their voice and fun in their marketing, and were able to focus on demonstrating their value to their best customers. And with that focus, they saw pick up from stores across the country as well as growth in their online sales. As they’ve grown, their social impact has grown too—participating in ‘1% for the Planet’ where they donate to charities, and  prepare fresh meals and munchies to Viola’s Place, a homeless shelter in their community.

She sums up her ideal client as, “the entrepreneur who has an ambition that speaks to their soul, has a product or service that can do good out in the world. And then is really crafty, creative, and wants to do something more than for the hustle, more than for the dollars, but something they want to stick with for a really long time because it makes them happy. And that happiness makes their customers happy. That’s the dream.”

“When you go out somewhere to sell your product, it’s not over when you make the sale. Now we have to prove that we’re going to stick around, that we backup our product and our commitments, that we are here with the customer service.”

Looking toward the future in a changing world

Adaptability is crucial for entrepreneurs in an ever-changing market. Leah appreciates having the course text, case studies, and videos available as reference resources whenever new challenges and opportunities arise.

“So, what you knew and what you did two years ago is different now. What I would have recommended two years ago is different now. A marketing strategy I write this year is going to be different from the one I write in a year from now because of how the market changes.”

Leah envisions a future where Kelford, Inc. further expands its portfolio of client collaborations from all over the world. The choices when selling globally can be overwhelming. The knowledge and resources gained through the FITTskills program and validated through earning the CITP designation provide building blocks for success.

“My experience working toward and earning the CITP has been wonderful in terms of knowing “how can we leverage our skills, the tools that we know are out there?” It’ll always be just the two of us, but how do we grow that impact that we’re able to have? And we are really looking at that on an international scale now.”

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