Complexity is on the rise for e-commerce brands as customers increasingly demand highly personalized, omnichannel experiences.
Managing everyday operations in such settings can be an onerous and incredibly slow process. It's enough to leave merchants constantly scrambling to respond to market changes and customer needs rather than anticipating and proactively acting on new opportunities. Automation can change this situation by helping e-commerce businesses keep up with staggering demands.
Why e-commerce automation is crucial today
In the simplest terms, e-commerce businesses increasingly need to automate repetitive tasks to reduce their day-to-day management burden.
For online retailers trying to keep up with today's market, matters like data integration across channels; customer payment card data management; shipping and inventory management; as well as internal issues like payroll processes all present considerable complexities. But like sales tax management, they also all feature many repeatable tasks that can be automated through solutions that gather data from diverse sources within your business and use that information to enact processes on your behalf.
Using automation in this way can enable e-commerce businesses to:
Eliminate overhead by reducing the number of manual processes employees must complete.
Streamline compliance-related processes by automatically gathering data in ways that align with regulatory requirements, simplifying audits through reporting tools that gather relevant information with minimal user input.
Empower employees to spend more time on their primary areas of expertise, perpetuating engagement in tasks that create key value opportunities, while software automates clerical work that would otherwise occupy their time.
Automation can be transformative for e-commerce brands, allowing them to handle the complexity of large-scale, omnichannel operations without putting an excessive burden on employees.
In many cases, e-commerce growth hinges on reaching customers in new ways, often via new channels. Whether you are working to increase transaction volume through social shopping strategies or create smoother customer journeys across in-store and online channels, automation can be instrumental in driving growth.
Automatically moving data between in-house systems, such as a web platform and enterprise resource planning system, for example, can eliminate manual labor, reduce errors and position your business to handle growth without being overwhelmed.
How to automate for e-commerce
In many ways, automation is fairly straightforward; software that simply does a lot of the work for you, designed to be intuitive and responsive. While it can be easy to implement, there are also plenty of potential headaches businesses can run into if they aren't careful.
As e-commerce brands work to automate, there are two core philosophies to keep in mind:
Automation is most successful when businesses work to identify vendors with core competencies that are closely aligned with how they operate. For example, if your e-commerce brand is built around Shopify, it's going to be cumbersome to try to work with a solution built primarily for Magento. Identify the underlying philosophies and tactics of the vendors you are considering and ensure they align with your goals.
Businesses can often lay the groundwork for successful long-term automation goals by initially focusing on solutions that solve straightforward pain points. Identifying those pain points and simplifying automation can ensure brands get value from the immediate move and don't end up bogged down in unwieldy projects.
There are plenty of other issues to consider when automating: how to manage diverse solutions, avoiding billing surprises, and training staff – so focusing on these two fundamental matters can give you a guidepost to work from.
Using these two strategies to get started with automation provides a jumping-off point to long-term success. As you realize the value automation creates through initial projects, you can sustain progress by creating a cohesive roadmap of what you want to automate next and when, positioning you to build on initial progress and become proactive in how you use digital tools to grow your business.
How sales tax automation drives progress
Outsourcing sales tax through software solutions is a critical way for eCommerce brands to automate and simplify otherwise complex operations. As a result, sales tax automation solves one of the biggest pain points that online retailers encounter regularly and becomes one of the easiest ways to free up time to focus on other business processes.
When it comes to handling sales tax, e-commerce companies must:
Track when and where they have nexus - as transaction volume, economic and/or physical activity above thresholds will mandates tax filing in states.
Gather sales data, identify transactions that must be taxed, collect tax from customers and file with states.
Handle diverse filing processes for various states and even local jurisdictions.
Manually staying on top of laws, creating reports and remitting sales tax can take days of labor for e-commerce businesses and distract workers from their core competencies. Automating this process with tax management software eliminates this burden.
Sales tax software can integrate with your e-commerce platform or ERP system to gather transaction data for you. It can compare and check the data next to state nexus laws and automatically formulate the information into reports that match with what you need to file with the states.
In essence, sales tax management solutions can automate the basic data collection and filing processes. This kind of value opportunity represents how automation software aimed at specific pain points creates value for e-commerce brands. Handling your operations manually often takes multiple days of work to perform the sales tax calculations and file with each jurisdiction where you have nexus.
Not to mention, as you have nexus in new states, it takes time to register every where you plan to file. When this is automated, a worker who would have spent days or weeks managing sales tax can often get the job done in just a couple of hours, depending on how deeply you want to use automation. As a result, employees can focus on more valuable tasks and drive revenue.
How automation fuels e-commerce growth
High-growth e-commerce brands face a mounting challenge of growth and figuring out how to best scale. Today's market demands that businesses expand the breadth and depth of their services as they work to support more channels and meet nuanced customer demands. Tools that automate cumbersome, time-consuming tasks can reduce operational complexity and make it easier to focus on overall growth strategies.
Find the motivation to implement automation
Automation and outsourcing eliminate the manual work that holds back growing e-commerce brands and gives them the tools they need to be competitive. Getting started with automation and understanding sales tax begins with identifying manageable pain points - such as sales tax management - and finding the right tools to automate.
Jennifer Clark, TaxJar's Content Marketing Manager, aims to simplify sales tax for everyone through enjoyable, engaging content. A long-time writer, Jennifer enjoys tackling complex subjects, researching sales tax and SaaS industry news, and interacting with the digital TaxJar community through social media.