International Trade Corner: September 2021
Succeeding at Exporting through E-commerce
Technology has been changing the ways that sellers of goods and services reach potential international buyers for some years now. COVID-19 has accelerated many of the trends that were well underway before the pandemic hit hard and disrupted trade flows during first few months of 2020. As a result, entrepreneurs as well as small and medium size enterprises (SMEs) trading across borders have been witnesses to the increasing utilization of digital platforms and E-commerce for marketing, selling, shipping, and getting paid.
In my view, there are two high-levels aspects that entrepreneurs and SMEs need to pay careful attention to when looking to begin exporting or to expand their sales into new markets through E-commerce: technological solutions, and the evolving Customs and Other Government Agency (OGA) regulatory environment.
In my experience, more emphasis tends to be placed on how to leverage technology through E-commerce and online platforms to match sellers and buyers than on compliance with Customs, Tax and other government agencies that are involved with enforcement of trade related laws and regulations. The global regulatory environment around E-commerce is a rapidly evolving topic. To be successful as an exporter in these dynamic times, entrepreneurs and SMEs must utilize technology in an optimal fashion, while at the same time understand and comply with the laws and regulations of both the country of export as well as the country where the importer is located.
Unbeknownst to many exporters but become increasingly common is the requirement that a foreign based E-commerce exporter vendor be responsible for compliance with the destination country’s Customs, OGA, and tax laws. That can take the form of requiring that the exporter properly register with government authorities and collect and pay VAT/GST taxes to the country they are selling to, including to Australia and Canada respectively.
For further information and assistance with succeeding in international trade through E-commerce or traditional channels, contact MSBDC Manager of International Trade Anthony Cambas at firstname.lastname@example.org or 662-832-3771.