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Avoiding The Pinch Of International Sales Tax

4 weeks ago

Amazon, eBay, and Etsy – they’ve all made it incredibly easy for anyone selling online to sell their products internationally. Almost too easy. As countries across the globe crack down on international sales tax, ecommerce sellers are starting to feel the pinch (and fines) of selling across borders. Join us as we take a look at the fine-ancial implications of international eCommerce and how you can take action now to avoid being caught out later.

What is international sales tax?

Let’s backtrack a little bit first. Sales tax is money collected from someone buying a product, which is then later passed onto the government, for government spending.

When the buyer and seller live in the same country, the process is simple – you collect sales tax at the local rate and submit it to the local government. When the buyer and seller live in different countries, things get a little more complicated, and international sales tax may, or may not, be owed to the buyer’s local government, at its own rate.

What’s the problem with international sales tax?

International sales tax itself isn’t a problem per se – but it can cause significant (and costly) problems for online sellers – especially those who accept international orders without first understanding the consequences. Common problems driven by international sales tax are:

  • Charging customers too much – if you’re not sure of the local country’s tax rates and rules, you could be charging customers too much, limiting your success in that country.
  • Charging customers too little – likewise, if you’re not sure of the local country’s tax rates and rules, you could be charging your customers too little, footing a large tax bill at the end of the year yourself.
  • Breaking the law – if you fail to pay the correct amount of international sales tax, or if you fail to realize that you need to pay international sales tax, you could be subject to hefty fines and restrictive penalties.

But while this can all sound a bit doom and gloom, it’s not all bad. Cross border sales are set to amount for USD$627 billion by 2022 – making up 22% of the ecommerce industry. International ecommerce can be a hugely profitable, rewarding, and scalable business opportunity when done right – you just need to know the top tips for navigating international sales tax first.

Top tips for avoiding the pinch of international sales tax

So let’s jump straight in – what are the best ways to avoid being caught out by international sales tax?

1. Work out whether you’re affected

Before getting yourself into a twizzle about international sales tax, it’s first worth working out if you’re actually affected by international sales tax.

Same country or state

If you’re only selling to customers in the same country or state as you, then you can probably stick to local ecommerce tax laws and not worry about anything international other than your next vacation.

State to state

If you’re selling to customers in different states, then the law is a little murkier. Some states require you to have a significant presence in that state before being required to collect taxes.

However, in June 2018, the US Supreme Court decided that states could require businesses without a physical location to collect sales taxes on purchases made from that state. If you sell state to state, then research the local ecommerce tax laws before proceeding.

Country to country

If you’re selling to customers from a different country, then you may be required to register and collect local taxes if your annual turnover is above a certain threshold. Again, research the local ecommerce tax laws before proceeding.

If you’re still unsure, seek the help of an international ecommerce accountant or bookkeeper pronto.

2. Calculate your tax rates

Once you know which countries or states you’re required to collect local tax in, next you need to work out how much tax you need to collect and when you need to submit it. Tax rates and submission deadlines vary significantly, so take the time to research the appropriate rates and deadlines properly.

3. Ensure your listings are compliant

The impact of international sales tax begins way before your annual (or quarterly) tax bill. In some countries (such as the EU), you’re required to include Value Added Tax (VAT) in the product listing – whereas, in the US, this is rare and will make your product prices seem expensive.

4. Assign orders to the correct country

Once you’ve decided you’re accountable for international sales tax, and you’ve updated your listings accordingly, next you’ll need to assign your sales orders to the correct country. For low-volume, single-channel sellers this will be relatively easy to do within your sales channel admin, or manually in your accounting software.

For high-volume, multi-channel sellers, this is a little more tricky. A useful tip here is to use the tracking categories in Xero to create different countries for sales orders to be assigned to, and use Xero ecommerce integration software to automatically push cross-channel sales orders to the correct country tracking category.

Under the ‘Accounting’ tab, select Advanced > Tracking Categories > Add Tracking category, and then away you go.

 

 

 

 

 

 

 

 

5. Apply and file the correct tax rates

After your orders have been assigned to the correct country, you’ll then need to apply the correct tax rate so that you can collect the appropriate rate of tax for filing.

While this can be done manually or via CSV, a far easier and quicker way is to use Xero’s tracking categories to filter your orders by country and bulk change the tax rate to the correct one.

6. Make someone accountable

The final, and perhaps most important tip of them all, is to make someone responsible for keeping you up-to-date and compliant with local tax laws and regulations. If this is beyond your expertise, capacity, or desire, then enlist the help of a professional ecommerce accountant or bookkeeper.

Not only will their international sales tax knowledge keep you fine and error-free, but with them using the latest ecommerce accounting integration software to send your orders to Xero automatically, they could save you time and money too.

International sales tax – final thoughts

International ecommerce sales tax doesn’t have to be taxing – you just need to be aware of the implications and enlist the right expertise and tools to ensure that you’re compliant now and in the future.

Author bio: Niki Tibble is a content writer for Expandly, a multi-channel management platform empowering online sellers to manage multiple sales channels, shipping carriers and Xero from one platform. She also writes for CartStack, Deliverr and have written for Oberlo, so she knows what’s what when it comes to eCommerce!

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The Benefits Of Outsourcing Fulfillment & Inventory Management

last month

There are many benefits to outsourcing fulfillment, reduce shipping and operation costs, extend your reach, improve customer service, and focus on growing your business.

Order fulfillment providers are usually equipped with facilities all over the country, allowing lower shipping rates that you can take full advantage of. Along with that, operational costs can begin to rise and fulfillment services will normally charge a flat rate for warehousing your products.

By using a fulfillment company you will be able to reap the benefits of inventory management, item tracking, security, shipping and handling, carrier selection, and payment processing. 3PL companies are able to use the latest technology to process and ship your products with ease. Now it is time to grow your business and let the outsourcing experts do their part.

Author bio: This infographic was created by our friends over at Our ServiceWorks, a brand-focused outsourced fulfillment and customer care service.

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Best WooCommerce Themes Of 2019

Creating a website is very common these days. There are a lot of websites and the niches of websites greatly differ from each other. One type is ecommerce websites. These include brand sites and the sites that were initially just for fun. Easily available and easy to use plugins are a major reason for the rise in ecommerce stores and one of those plugins is WooCommerce.

WooCommerce is a WordPress plugin that is popular among small and large businesses. WooCommerce makes the process of selling very easy and its interactive themes make it a breeze to build a great looking online store. There are a lot of WooCommerce themes with different features. Let’s see some of the best themes for 2019!

Shopkeeper

Shopkeeper is the fastest theme available for WooCommerce websites. The installation of Shopkeeper is easy, as everything necessary for installation come in the detailed documentation. If someone needs more assistance then their customer support help in getting the installation done smoothly. The customization of every section is available, and it does not need any coding.

People love the clear images and Shopkeeper provide them. The layout is a full screen that offers quality one-page visuals. The responsive and minimalist design of the Shopkeeper provides an easy shopping experience. So, in conclusion, the visual appeal and the responsive design are the factors that are keeping Shopkeeper favorite of many WooCommerce sites.

Ultra

If you do not have much time to individually design each section of your ecommerce store then Ultra is great for you. A theme that offers great flexibility, Ultra provides an option to install a ready-made website. The installation can be done in one click and, after this, you can replace the sections with your own content. Isn’t that super easy? Obviously, yes.

But it doesn’t mean that Ultra is not for DIY lovers. For them the options are open. They can design by drag and drop feature of Ultra. You can add pricing tables, can play with diverse header styles, can add a photo gallery, and much more. So, Ultra is multi-functional and suits every need.

Hugo

Hugo can be named “customizable,” making it suitable for every kind of online business. The design is little conventional like the header at the top and then the product or headline sections below it.

The color scheme options and the customizability of themes are among the plus points, with Hugo offering great ways to present product displays. You can add customizable social media widgets so that people can easily find out your social media accounts and thus earn you more following. The widgets can also be customized for the contact information and to enhance the visibility of the website content.

It also offers page builders for the site. Thus, if you are not a pro in web development, there is no need to worry. Hugo is for you.

Merchandiser

Merchandiser is a classic theme, one that is simple yet elegant and minimalist in design yet very functional. The simple design reduces the loading time of shop and that’s the feature customers probably love the most. After the shop is loaded in seconds the customers can look for the products simply and find them very easily.

There are 9 layouts for the homepage and a lot of design options to display products.  Whether you want to display images in single format or in slide format, the options are seamless. Another benefit of Merchandiser is the availability of themes for other pages along with the shop page. It means you can also find attractive themes for your blog page (etc) along with the themes for your shop page. All these benefits can easily be used without getting coding classes.

Porto

We can call Porto an enriched theme, as it offers access to a lot of templates and is feature enriched. There are different online shop demos that can help you get inspiration for your store. If you find a template from shop demos that is very relevant to your needs, you can edit it to make it a perfect fit for your shop.

You can easily change the color, font, and other display settings from themes section that is under the control panel. The product listings, filters, and wish list can be established according to the needs.

WooCommerce websites developed by using Porto are accessible from every device and have no compatibility issues. Porto is perfect for the online WordPress shops as well as other WordPress websites, such as blogs.

Mr. Tailor

Mr. Tailor is a sleek and responsive design theme, making it good for any kind of business. The portfolio and catalog options are the next level features to display products, while the Visual Composer Page Builder can be used to build unlimited pages. The shop features and the theme are fully customizable, allowing you to enhance the functionality of your ecommerce store.

There is a lot of content online available on WooCommerce WordPress themes but the choice is yours. Any certified digital marketing professional will agree that it’s you and the needs of your business on which the theme choice is dependent. Furthermore, a good decision will be based on your market analysis. As it differs from business to business. So review the themes I’ve recommended, decide wisely and start building your ecommerce business today!

Lorenzo Gutierrez

Author Bio: Lorenzo Gutierrez is a published author in over 30 industry websites; he writes on marketing and business. Lorenzo graduated from WGU with a Masters in Business and works as a marketing consultant. Connect with Lorenzo on his social media accounts LinkedIn, Twitter and Facebook

 

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Four Technical Decisions To Make Before Launching An Ecommerce Store

a couple of months ago

When you start an ecommerce business, you don’t have to think about renting and decorating a space, and you don’t have to deal with the tangle of regulations that come with a physical storefront. But an online store does have technical prerequisites, platforms, and systems that must be in place before the store goes live.

The decisions a retailer makes before launch affect the store’s performance and the shopping experience, so it’s worth taking the time to get it right before the promotional push come launch day.

In what follows, I’m going to assume that you have chosen and sourced the products you intend to sell, have settled on an ecommerce application like Magento or WooCommerce, and are looking for advice about getting your ecommerce store online.

The technical components that support an ecommerce store are a domain name, DNS hosting, and a hosting platform, which means choosing both a type of hosting and a hosting provider.

Domain Name

A domain name appears in the address bar of a web browser when you visit a website. It looks like this: nexcess.net. A store’s domain name is a large part of its online identity. It is how shoppers navigate to the store and how they recognize it. Choosing a domain name is one of the most important decisions you will make.

What makes a good domain name? Devising a brand is beyond the scope of this article, but there are a few rules that you should keep in mind:

Go with .com if it’s available

The .com generic top-level domain (TLD) is familiar and trusted. You might not be able to get .com domain for your business’s name, but I’d suggest changing your brand before choosing a less-well-known TLD — they are often associated with spammers and shady operators in the minds of shoppers.

Pick a TLD that’s relevant to your business

If you are determined to use one of the newer TLDs (Top-Level Domains) like .shoes or .bike, pick one that is relevant to your business and consider that it may limit your flexibility if you want to introduce new product lines in the future.

Consider whether you need a country-code top-level domain

There is one exception to the .com rule. If your store will sell primarily to a specific geographic market — the UK or Germany, for example — you may want to use a country-code top-level domain (ccTLD) such as .co.uk or .ca. Search engines use ccTLDs as a signal to rank a domain’s pages within the relevant area. You can read more about ccTLDs on Moz.

DNS Hosting

Domain names are good for shoppers, but the internet doesn’t use them to move data around. It uses IP addresses, a unique number that identifies a server on the web. Every time a shopper visits an ecommerce store, their browser converts the domain name into an IP address with a service called the Domain Name System (DNS).

To be part of the Domain Name System, a domain name’s records are hosted on an authoritative DNS server. DNS hosting is often provided by the domain’s registrar or by your web hosting provider, but it can pay to switch to a faster DNS host.

DNS has an impact on the performance and availability of an ecommerce store. If you’ve ever clicked on a link and waited while the browser does nothing at all, you’ve seen what happens when DNS fails. Slow DNS can add seconds to a store’s load time.

To get the best performance, consider paying for a specialist DNS hosting provider or an ecommerce hosting provider that offers a redundant AnyCast DNS hosting platform with a service level agreement.

Web Hosting Provider

A web host provides an ecommerce store’s data storage, processing, and network connection. There are hundreds of web hosting providers of many different types, and it can be difficult to choose a cost-effective provider that offers the customer support and technical resources an ecommerce store relies on.

A few rules of thumb will help you to choose wisely.

Low-cost hosting is usually a false economy.

An ecommerce store needs more resources than a blog or business site. The cheapest shared hosting is cheap because the provider oversells space on their servers and cuts corners with essential services like customer support.

Managed hosting is a good idea

Managed hosting is a good idea if you aren’t a server administrator. Keeping an ecommerce store fast and available is a full-time job, and your time is better spent growing the business.

Specialized managed hosting

Managed hosting specialized for your preferred ecommerce application is the least risky option. A high-quality hosting provider will provide support for the underlying infrastructure and for the application.

For a new store, you needn’t opt for the most expensive enterprise hosting, which can cost thousands of dollars a month, but it is worth investing in a high-quality hosting platform with round-the-clock customer support.

Type Of Web Hosting

High-quality web hosting providers offer a variety of hosting types that can include shared hosting, dedicated servers, virtual private servers, and cloud hosting. Shared hosting from a reputable hosting provider (see above) can work well for smaller stores, but if you expect your store to grow over time, consider cloud hosting.

Unlike other types of hosting, cloud hosting can scale from tiny to gigantic without an expensive platform migration. Resources can be added on-the-fly so that a store doesn’t run into hard resource limits during periods of peak traffic. Stores can be deployed almost instantly. Cloud ecommerce hosting platforms often include multiple redundancy to make them resilient to hardware failure.

In 2019, cloud hosting is the best option for new stores, but some care should be taken when choosing a cloud host. “Cloud” is often used as a marketing term to refer to everything from shared hosting with a lick of paint to old-fashioned virtual private servers. A true cloud platform uses virtualization and orchestration technology to combine many physical servers into a pool of resources that can be allocated dynamically. Be wary if a “cloud” hosting provider’s platform doesn’t fit that description.

It is easier to build a successful online store if the technical fundamentals are in place right from the start. With the right domain name and DNS hosting and a reliable and scalable web hosting platform, you can focus on what really matters: building a customer base and growing your retail business.

Author Bio: Graeme Caldwell is a writer and content marketer at Nexcess, a global provider of hosting services, who has a knack for making tech-heavy topics interesting and engaging to all readers. Graeme’s articles have been featured on top publications across the net, TechCrunch to TemplateMonster. For more content, visit the Nexcess blog and give them a follow at @nexcess.

 

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