Three tips for selling internationally
There are new rules of how to win in retail - tax needs to be at the top of every ecommerce retailer’s agenda. We’ve put together three top tips for retail businesses looking to keep cross-border sales switched on and continue to drive growth.
This list is from Avalara’s Ecommerce Tax Trends 2022 guide. Read now for more information on how to win in new markets and find international sales success.
Automate Tax Compliance
First, make sure your business is using an automated tax platform, and be aware of the tools that can help you, such as the EU One-Stop Shop schemes. There’s no way to avoid costs and complications entirely, but solutions are available to minimise their impact.
It’s smart to keep potential customs difficulties in mind with every decision you make related to cross-border trade - for instance, look to see if your logistics company of choice is applying a Brexit or COVID-related surcharge.
Prepare for Change
In the same vein, the second point on your checklist should be constant awareness. You can only stay ahead of changing regulations by staying informed — businesses were generally unprepared for Brexit, and the current problems with customs duties and taxes have resulted from that.
It may be that you need to modify your entire logistics and warehouse operations (as businesses have had to do in response to COVID-19 and Brexit) but it’s far better to do this proactively instead of as a response to difficulties.
The same goes for spending time and money reviewing the new VAT setup to ensure you’re registered correctly. If this process is rushed or ignored, customers may be charged extra for VAT or customs, which results in a bad customer experience and negative publicity.
Consider New Markets Carefully
Finally, non-EU businesses in particular need to keep in mind that it may be smarter to limit their geographic range to avoid too many regulations and taxes instead of selling to EU customers. While cross-border trade is a huge part of growing your business, the EU estimates that it will cost businesses nearly £7,000 per year to register and comply with IOSS regulations. If you are uncertain if the profits of EU trade can offset this cost, it may be best to hold off until your business develops further.
That said, be sure to investigate the potential profits of selling internationally, as the up-side may offset the registration costs. While there is a price attached to the One Stop Shop schemes, they are a fantastic way to reduce your financial reporting requirements and free up time for selling.
Make Tax Compliance Easy with Avalara
At Avalara, we know that trading only gets more complex as you expand into new markets. With our software, you can make the nightmare of international tax compliance a much simpler task. Keeping up with trade regulations, understanding customs duties, and keeping your customers happy — all of this easier with Avalara’s digital solutions.
Contact us today to learn how we can help your business.
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