Ecommerce platforms and sales tax compliance are core to your omnichannel strategy

Today’s consumers browse, research, and buy across channels. They expect a seamless and personalized experience, whether discovering products while scrolling social feeds, searching in-app, shopping on websites, or strolling through store aisles.

In April 2021, McKinsey & Company bluntly declared a compelling omnichannel experience is “a requirement for survival.” McKinsey authors found that creating a solid omnichannel strategy, focused on customer value, helps retailers reduce risk immediately and in the future.

There’s no arguing that your omnichannel retail strategy is more important than ever. An omnichannel experience increases customer loyalty and the more sellers offer it, the more consumers will come to count on it.

With U.S. ecommerce sales climbing to $1.09 trillion in 2022, now is a great time to make sure you have the tools in place to increase sales and grow your customer base.

Let’s take a look at how retailers are turning to omnichannel ecommerce platforms to get ahead.

Sales tax compliance can be a lofty challenge for an omnichannel strategy

Implementing an omnichannel retail strategy opens the door to challenges, as well as opportunities. As you expand your sales footprint, you’ll need to consider factors like cross-channel communication, inventory management, channel management, and sales and use tax compliance.

The more retail channels you have, the more likely you’ll have customers in new locations. You may trigger economic nexus obligations that require you to register, collect, and remit sales and use tax in new jurisdictions. It can be difficult to know when you’re close to crossing an economic nexus threshold without a system in place to alert you.

Selling internationally can create even more compliance hurdles. Failing to calculate and collect accurate duties and tariffs upfront can leave a sour taste in buyers’ mouths and lead to penalties.

“Many businesses believe they’re doing tax correctly only to find out during an audit or other event that’s not the case,” says Meg Higgins, Senior Vice President of Global Partners at Avalara. “It’s very stressful for the business because it leads to a significant loss they can’t recoup. You can’t go back and tell a customer, ‘I forgot to charge you $7 for that transaction two years ago.’”

Technology can help you better manage tasks that support your omnichannel strategy so you can focus on day-to-day operations and growing your business.

Your ecommerce platform is a tool to power your compliance and omnichannel strategy

The omnichannel retail commerce platform market is growing by 19.2% and is expected to reach $14.3 billion in 2030. These platforms are popular for good reason.

A platform like BigCommerce unifies your ecommerce and marketing channels, allowing you to manage all the places you sell and advertise in one centralized dashboard. Integrating search, social, and marketplace channels like Amazon, eBay, and Walmart reduces complexity and lets you see data patterns.

Connecting online and in-store shopping experiences becomes possible with features designed for buy online, pickup in store (BOPIS). A 2022 report by Bazaarvoice found that 66% of global consumers who responded to a survey prefer a hybrid online and in-store shopping experience.

Plus, many ecommerce platforms seamlessly integrate with tools you use for other daily operations, such as managing shipping and fulfillment, creating customer communications, and gathering online product reviews.

Your ecommerce platform can also be pivotal in helping you meet your tax obligations. Ecommerce platforms that integrate with a tax compliance automation software provider like Avalara can make compliance easier for your business by calculating and collecting tax with greater accuracy.

Sharon Gee, Senior Vice President and General Manager of Omnichannel at BigCommerce and Senior Vice President of Sales and Partnerships at Feedonomics, explained the advantages of the company’s partnership with Avalara in an Omni Talk podcast.

“Merchants want to sell their products, wherever their shoppers are. Whether that means they want to put their product on TikTok Shop, sell it on Instagram, or list it on Amazon, it often means bringing orders in from various different channels and fulfilling them in diverse ways, including, potentially the same way they fulfill their direct-to-consumer orders. The more channels, the more potential complexity. And all of those things trigger tax considerations,” Gee says.

“At BigCommerce and Feedonomics, we’re all tethered around this concept. Whether it’s launching new social commerce channels like TikTok Shop, taking advantage of new programs like Amazon Buy with Prime, or expanding your global footprint for cross-border, or multibrand, multistorefront, or multiregion, there are a lot of considerations. This is where our integrations with best-of-breed technology partners like Avalara can help make the experience more seamless, not only for the shopper but for the merchant who’s managing that experience,” she explains.

Understanding what ecommerce platforms do (and don’t do) can help you get the maximum value from yours.

Include sales tax compliance in the foundation of your ecommerce platform

Ecommerce platforms come in thousands of shapes and sizes, so it’s important to pick the platform that’s right for you and your industry. Whichever platform you decide on to support your omnichannel strategy, make sure it can handle tax compliance.

Avalara AvaTax integrates into websites powered by BigCommerce. AvaTax automates sales tax calculation for all BigCommerce transactions using geolocation instead of ZIP codes to provide more accurate tax rates.

The AvaTax heat map alerts you when you’re approaching an economic nexus threshold and should consider registering in a new state. The solution also helps you determine product taxability for items you sell and manage exemptions for customers who are exempt from sales tax.

For BigCommerce merchants that sell into the U.K. and EU, Avalara AvaTax Cross-Border calculates value-added tax (VAT), goods and services tax (GST), customs duties, and import taxes assessed at the border. Rates are based on the latest tax rules and global trade regulations. Collecting tariffs and processing payments upfront results in fewer delayed shipments, fewer costly returns, and increased customer satisfaction and loyalty.

If you’re already using BigCommerce, you can set up AvaTax with a few clicks. Avalara has an online course to help you configure settings to meet your specific business requirements.

With the right ecommerce platform for your business and a partner like Avalara, optimizing your omnichannel strategy is easier than ever.

Recent posts
How small and midsize businesses are managing property tax
Why W-9 and 1099 services are a natural addition for CAS practices
Is my business a marketplace? What does that mean 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.