Customer insight

From cross-stitch to cross-border: Ehrman Tapestry poised for growth with Avalara

This family-run needlepoint specialist benefitted from the pandemic lockdown boom in creative hobbies, and was prepared for it in part, by automating sales tax compliance in its largest overseas market.

Summary

This family-run needlepoint specialist benefitted from the pandemic lockdown boom in creative hobbies, and was prepared for it in part, by automating sales tax compliance in its largest overseas market.


Tax challenges

  • Minimise the cost of filling and returns
  • Automation of sales tax compliance 
  • Preparation for international growth


Products used


Customer
Ehrman Tapestry

Industry
Hobbycraft retailer

Company overview


Ehrman Tapestry sells needlepoint kits to hobbyists around the world, and works with leading contemporary textile designers to create stylish products that wouldn’t look out of place in an art gallery. With shops in the UK and US, the family-owned business primarily sells kits online, shipping orders from its UK-based headquarters.

Demand for home-craft hobby kits soared


The COVID-19 lockdown sparked an arts and crafts renaissance as people rediscovered the joy of making things. Needlepoint is a very accessible hobby so the pandemic saw sales of Ehrman kits rise sharply. The shops were closed due to COVID-19 restrictions but online sales boomed. In the second half of 2020 alone, sales revenue exceeded the total value of sales in the previous year. Much of this growth was in the US market. 

Luckily, Ehrman was prepared for international growth. In the wake of the 2018 Wayfair ruling, which affected remote sellers operating in the US, Ehrman’s US accountant, Nora Marsh, worked with owner, Hugh Ehrman, to coordinate the automation of sales tax compliance. She recommended Avalara as a compliance partner. 

Nora says, “The Wayfair decision had wide-ranging implications for remote sellers. Ehrman only has physical presence in one state but it sells to many others. We needed to consider the nexus requirements and start collecting tax and filing returns in several states. I’d heard good things about AvaTax and so I arranged a demo for the owner, Hugh Ehrman and myself. It was clear Avalara’s compliance suite was going to be the right fit for Ehrman.”

Ecommerce site primed for international growth


In 2020, Ehrman launched a new ecommerce website using the Woocommerce platform, which has a pre-built integration with AvaTax and Avalara Returns. This allowed sales tax to be accurately and automatically calculated at the point of sale and Ehrman was freed from the burden of managing state and local sales tax rates and filing returns. 

Before AvaTax was switched on, Avalara conducted a nexus study to determine Ehrman’s US sales tax obligations. The business was initially registered for sales tax in seven US states and soon added a two more. 

Nora continues, “Ehrman is a small business and so I can’t imagine having to manage tax compliance without using software – it would practically be impossible. AvaTax does all the work. Being a cloud-based solution makes it easy for me to access Ehrman’s data, review transaction history, and generate reports. Ehrman doesn’t sell their products on Amazon or any other marketplaces so it’s essential that their ecommerce business delivers a good customer experience. Applying the correct sales tax rates allows orders to be created quickly and accurately.”

Looking to the future


Every business wants to minimise the cost of compliance, and Ehrman is no different. Nora is looking into whether Ehrman could benefit from joining the Streamlined Sales Tax (SST) programme to access free sales tax calculation and filings. 

SST is a state-run initiative designed to make sales tax compliance easier and more affordable by offsetting the cost of using a tax technology provider. Avalara was the first tax software company to be certified as a service provider for the SST programme. 

Nora says, “I’m an accountant, so the desire to save my client money is in my DNA. Avalara is one of the few software firms that can provide access to the SST programme. This is further evidence of their expertise in this area.”

Erhman logo

Customer
Ehrman Tapestry

Industry
Hobbycraft retailer

Tax challenges

  • Minimise filling and returns costs
  • Automation of sales tax compliance
  • Preparation for international growth

Integration
Woocommerce

Products used

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