Why going global may be the best response to COVID-19

Why going global may be the best response to COVID-19

Overcome new challenges and gain global clients.

Mere months after the emergence of the new coronavirus (COVID-19), nearly 90% of the world economy was under some sort of lockdown to help slow its spread. Global interconnectedness makes it challenging to contain COVID-19, but as we move forward, that same interconnectedness could help businesses thrive.

Ecommerce sales worldwide reached approximately $3.5 trillion in 2019. By 2023, global ecommerce is expected to surpass $6.5 trillion. Businesses that tap into the global marketplace have a lot of room to grow.

With consumers largely unable to shop in stores, some retailers saw online sales surge in recent months. Others experienced a drop in demand. For the latter, expanding to international markets could provide a much-needed boost in sales. Ultimately, it could even increase revenue.

Yet selling across borders has some inherent challenges, notably customs duties, import taxes, and transaction taxes (e.g., sales tax, value-added tax).

In addition to getting sales or value-added tax (VAT) rates right, international sellers must take tariffs into consideration. Every item that crosses a border must be classified with a Harmonized System (HS) code, a “universal economic language and code for goods.” Customs agents use the codes to quickly identify the products passing under their noses.

HS codes also correspond to country-specific duty rates. Get the code wrong, and tariffs could be too low or too high. Unexpected tariffs can cause customers to reject shipments, especially if they’re asked to pay what they owe in order to release shipments held at customs.

On the other hand, rewards can be great for retailers that successfully negotiate the hurdles of international compliance. There’s a world of customers out there.

Gain insight into the challenges and opportunities of cross-border ecommerce and learn how one retailer overcame obstacles and found new customers selling abroad in an upcoming webinar hosted by Digital Commerce 360 and sponsored by Avalara: Overcoming the New Challenges to Gain Global Clients. Watch the webinar on demand.

Recent posts
February 2024 Roundup: Tax laws you need to know 
E-invoicing is coming, and it could be great for your accounting practice
What’s the difference between registering your business and registering for sales tax?
2023 Tax Changes blue report with orange background

Avalara Tax Changes 2024: Get your copy now

Stay ahead of 2024’s biggest tax changes with this comprehensive, compelling report covering seven industries.

Read the report

Stay up to date

Sign up for our free newsletter and stay up to date with the latest tax news.