Avalara’s Evan Wright on the Explosion of Cross-Border Ecommerce and How to Get it Right

As cross border commerce continues its skyrocketing growth, governments around the globe are focusing intently on getting their share of the pie in the form of taxes and tariffs—even for low-value transactions. That’s why brands must make tax compliance a key part of their cross-border strategy, says Evan Wright, director of growth, cross border at Avalara.

In this podcast, Wright digs into key tax considerations with Jason Nyhus, SVP of sales and partnerships at Digital River.

Tax is critical to good cross border ecommerce customer experience No one wants to order and pay for something online only to be told upon delivery that they owe an extra $100 in tariff duties. That’s why many brands are shifting to a Delivered Duty Paid (DDP) strategy which presents the customer with all the true costs of getting their product to them, including any taxes or tariffs, at the point of checkout.

“It allows them to trust the brand and believe that they’re able to purchase this without any additional fees,” says Wright in his discussion on tariffs at 13:08. “What we’ve seen from that is it increases long-term conversion.”

Choosing a cross border ecommerce market As brands are weighing whether to enter a certain market, understanding the tax implications of that jurisdiction can help them determine if it’s a viable move. Brands should understand whether there’s enough ROI in a country to make it worth entering.

“If there’s an export license that’s going to cost me money every single time I ship this product out, is it really worth it for me to turn to that country as a potential option for consumers?” Wright notes at 25:06 that this is a question brands should answer for themselves.

Cross border ecommerce challenges Every country has unique tax and tariff regimes for brands seeking to do business there. Brands should understand whether they must register to collect tax in each individual country. In addition, brands need to understand how to deal with customs and whether there are additional tariffs on importing goods into the different jurisdictions. It’s simply too much for most brands to do on their own, which is where a global compliance platform like Avalara steps in.

Avalara “really lets the business focus on what they want to do, which is growing their business,” Wright says in his discussion on Avalara at 1:26.