Is your business ready for the holiday season?
- Oct 27, 2021 | Avalara
It’s the most wonderful time of the year: Is your business ready for the holiday season?
After the year of all years, many business owners will be keen to make the most of the upcoming holiday season. Traditionally the busiest and most profitable period, the question is: have you considered whether your business is ready to accommodate a spike in demand?
An increased consumer confidence in online shopping has meant that buyer behaviour has driven the need for retailers to deliver a consistent, fast and accurate experience across all sales channels.
The pivot required to navigate this shift towards a more robust ecommerce model has opened multiple opportunities for business growth and diversification. While this is an exciting prospect, with progress also comes the need to ensure your operations and tax requirements are compliant to facilitate the changing regulatory and economic landscape.
With the holiday season fast approaching, an omnichannel indirect tax compliance strategy can support your business goals – and set you up for long-term profitability and success. Here’s why it’s worth considering your options:
Enhance the buyer experience: Thanks to ecommerce shopping, we’ve grown accustomed to viewing tax and shipping in the shopping cart. These costs are key considerations during the purchase decision. According to the Baymard institute, 49% of shoppers abandon their cart because they consider taxes, shipping, and fees to be too high. To avoid shopping cart abandonment, retailers need to provide speedy, accurate, and consistent sales tax calculations across all channels. You can achieve this with automation.
Accommodate growth and change: The surge in ecommerce offers opportunities to enter new channels, sell to new locations, and expand your product catalogue. Holiday shoppers spent $201.32 billion online in November and December 2020, up more than 45% from the prior season. Holiday sales could easily exceed this threshold in 2021. The ability to deliver a seamless experience requires consistent tax determination across multiple systems.
Drive efficiency and cost reduction: As retailers grow and sell across multiple borders, more resources are required to keep up with multiple sales tax jurisdictions, differing tax regulations, and filing requirements. A well-executed compliance strategy can help you do more with less. Moreover, it can be the deciding factor between successfully defending an audit or facing penalties.
Greater compliance and reduced risk: During the holidays, retailers expand product lines, head count, and pop-up locations to meet increased consumer demand. In doing so, their indirect tax obligations can quickly change because of rapid growth across multiple sales channels. In order to recoup revenue spent during the pandemic, governments are swiftly passing diverse and complex indirect tax laws to secure their share. These rules tap sales and fulfilment approaches used by retailers. Staying current on regulations requires continual research on the latest legislation, including economic nexus thresholds.
Whether it’s making sure your website is calculating the correct VAT payments at checkout or if you’re correctly registered to ship to and from EU-states, with the regulatory market ever evolving, it pays to regularly review your compliance requirements.