Is going international on the agenda for your business in 2025? It can be an imminently advantageous strategy for producers and retailers who’ve achieved peak market penetration here at home.
While our population may be growing fast, Australia remains a small nation. The local market for many products and services is limited and fiercely competitive, and businesses in expansion mode may find themselves all too quickly hitting a ceiling.
Setting your sights on larger markets
Entering offshore markets can be a great way to continue the growth journey; one that’s worked extremely well for a slew of homegrown brands, including fashion labels Cotton On, Showpo and Zimmerman.
Export businesses are larger and better performing than their domestic-only counterparts across a wide range of countries and industries, according to Austrade research. They’re more innovative, they pay higher wages and they’re more resilient to economic shocks such as the Covid pandemic, the agency’s Australian State of Exporters Report 2022 noted.
But while digital platforms and online advertising make it simple to put your offering in front of millions of offshore eyeballs, selling to those customers successfully and at scale can be considerably trickier.
Sorting your shipping
For starters, there are logistics to consider – how you’ll ship your goods overseas and how much you’ll charge to do so. That means selecting carriers that service the countries where you plan to start selling, determining the shipping options you’ll offer and establishing a pricing structure that’s understandable and palatable to potential customers.
Ensuring these details are sorted from the outset is critical, given today’s customers are habituated to receiving Amazon-level service. Smaller suppliers that don’t offering lightning- fast deliveries and a seamless customer experience are unlikely to get a second chance, particularly if they’re an unknown from Down Under that’s yet to earn a reputation for quality and reliability.
Tackling the compliance question
Equally important is ensuring you’re correctly registered for tax purposes and are applying the appropriate charges in each and every country where your offering will be available.
Given the US alone has more than 13,000 sales and use tax jurisdictions, along with different laws for marketplace facilitators – third parties that provide an infrastructure to facilitate retail sales – and remote sellers, that’s no easy ask.
Throw in the fact that some US states require sellers to apply a fee to orders containing items of personal property that are delivered by vehicle, while others impose similar charges on deliveries over a certain value, and you have significant complexity to navigate, before you send a single unit across the Pacific.
Thinking of tackling the UK, Europe or Asia too? Rinse and repeat for all the countries where you plan to start selling – or risk running afoul of regulators before your brand has the chance to take off.
Choose a tech partner that can streamline the process
Businesses in growth mode can’t afford to be waylaid by compliance complexity. Get your figures wrong – and it’s all too easy to do – and the cost and time associated with rectifying errors can scupper your overseas expansion strategy and damage your bottom line here at home too.
This is where automated tax compliance technology has a vital role to play. It’s designed to help international sellers do business in a digital world by simplifying and streamlining all the tasks associated with the tax compliance process – think registration, licensing, calculation, document management, reporting and e-invoicing, in addition to cross-border compliance (terminology you’ll soon learn that’s associated with shipping products from country to country).
Once implemented, you’ll be able to automatically calculate a wide range of indirect taxes in real time, including US sales and use tax and the value added tax (VAT) applied to purchases in the UK.
Choose a vendor whose software integrates with your ecommerce platform, billing program and accounting or ERP solutions and you’ll be able to proceed secure in the knowledge that you’re complying with all the rules and regulations associated with selling offshore.
Taking on the world with confidence
Expanding offshore can be a game changer for Australian businesses with a quality offering and an ambitious growth agenda. Putting the right back-office infrastructure in place will allow your organisation to commence this adventure on a sound footing.
An automated tax compliance platform makes selling your wares to customers far and wide a considerably simpler proposition.
If profitable growth is a priority for your business in 2025, it’s enabling technology that should sit at the heart of your ICT stack.
Chris Calverley is head of sales & partnerships for ANZ at Avalara.