What to do after the peak sales season

Peak sales seasons are a phenomenal opportunity for any business. As well as offering a chance to massively boost revenue for a short period and advertise your brand to a large audience,they provide a great stress test for your business. By analysing how your infrastructure handles an increased sales volume, you can learn a ton of useful, actionable information.

There are a variety of lessons a business can learn from a peak sales season (successful or otherwise), and those lessons help inform what changes should be made to ensure greater success next year. Below, we’ll look at a few ways your business can grow and develop after a peak season.

Most ecommerce platforms will provide analytics tools to help you understand your market demographic, which you should check after peak season for insights on your customers. Learning more about customer product preferences, the amount they spend, and personal info like age or location can massively help with future planning for your business. 

Additionally, having a successful peak season means you’ve likely had an influx of new customers. By referencing the location data of these customers, you can find out if there are regions where you can ramp up your marketing activity. It may be that the data provided by peak season sales reveals an opportunity to expand your company across borders and into new markets. 

However, while you’re looking into where you can expand into, take a moment to research the tax and customs liabilities created by shipping into new territories. 

For example, if you’re a UK company that’s sold products to U.S. customers during Black Friday, you might have achieved nexus in one or more states. Achieving nexus means that you’ll need to start paying sales tax when trading to customers within that state. It’s vital that you take these consequences into account when you analyse your peak season sales to prevent you from unknowingly becoming liable for taxes, and then being penalised for not remitting payment.

Ecommerce companies should always strive to increase customer satisfaction, and a crucial aspect of this is providing a great post-purchase experience (everything from shipping to follow-up customer service). After peak season, you’ll be able to clearly see where your post-purchase experience needs to be improved.

For example, you may be using a DAP (Delivered At Place) system instead of a DDP (Delivery Duty Paid) one. In DAP, customs duty isn’t paid at the checkout; it’s charged to the customer upon delivery. If the customer isn’t expecting the charge, it can lead to decreased satisfaction. If you notice a significant number of customer comments mentioning the DAP duty charges, you may want to consider using DDP. For more details, check out our dedicated guide.

Another example is HS (Harmonised System) codes. Following peak season, you might notice you’ve been paying more than you expect in customs duties or your products are taking longer than expected to ship. Part of the problem might be incorrect HS codes — after peak sales season, take the time to audit your shipping process to make sure the correct HS codes are being applied to all of your international deliveries.

If you’ve noticed an increase in your tax liabilities following peak season, one change your business should make is to research economic thresholds prior to shipping abroad.

Above, we looked at how you might establish nexus in the U.S. by breaching their sales tax nexus. In the EU, there’s a single threshold of 10,000 euros for goods and digital services sold via ecommerce. Beyond this threshold, sellers will be liable for VAT in the countries where their buyers are based.

These thresholds are important to remember if you’re a smaller retailer having your first big Black Friday or pre-Christmas sale. It might be that you breach these thresholds without even realising until you receive a penalty from the tax authority. Should this happen, reinforcing your team’s awareness of thresholds is a crucial post-peak season change. 

Avalara can help with doing a full tax risk assessment and dealing with historic liabilities with tax authorities. If you’re interested, click here for our US assessment, or here for our EU VAT assessment.

Peak sales season helps you work out what volume of sales can be handled manually and what requires a digital solution. However, if you have a successful peak season, it’s likely that you’ll be able to afford to implement digital solutions for almost all of your business functions. If this is true, then you should definitely consider automating as much as possible.

By using your profits to automate your business following peak season, you can ensure greater success down the line. For instance, by leveraging software that automatically calculates and applies relevant tax rates at checkout, you can ensure a better online experience for your international customers. By improving their experience, you’ll improve your brand reputation and attract more customers for the next peak season.

If you’re planning to offer your products internationally for an upcoming peak season (Black Friday 2022, for instance), it’s vital that you have a solid understanding of your potential tax liabilities. To help ensure you know exactly where you might owe taxes, Avalara offers a range of free tax risk assessments.

If you’re looking to trade in the U.S., try our sales tax risk assessment. It’ll help you understand both physical and economic nexus thresholds and if you’ll trigger them while operating in the U.S. 

For those selling to the EU, our VAT risk assessment helps display any tax liabilities you might create while selling in a European market, whether you’re trading from outside the EU or from within. 

Here at Avalara, we want to make sure you can make the most of peak sales season, wherever you are. By undertaking these assessments, you can ensure peak season success for your business going forward.