It’s no secret that the end of the calendar year can be a hectic time for small business owners. But in the age of ecommerce and omnichannel selling, retailers preparing for the coming year must consider far more than just stocking shelves and staffing up. Here are a few things small business owners should consider as they prepare themselves and their systems for 2020.
Payments trends impacting small businesses
As the retail landscape continues to evolve, so will the payments ecosystem that customers use to purchase products and services. Services like PayPal, Apple Pay, and “one-click” buying indicate a larger shift in consumer preferences: convenience is king, especially when completing a transaction. Businesses of all sizes must be prepared to adapt to this trend by accepting these alternative payment methods, which may mean deploying new hardware in a brick-and-mortar store or integrating third-party software on your business’s website.
More specifically, the growing trend of mobile payments stands to affect small business owners as they move to 2020. A Pew Research Center study revealed that one in five American adults are already “smartphone-only” internet users, and in 2018 63.5 percent of worldwide ecommerce sales occurred from mobile phones.
These trends will only accelerate in the coming year, which means business owners need to create a seamless and enjoyable mobile shopping experience for your customers as soon as possible, which includes:
Simple, mobile-optimized navigation
Easy-to-read product descriptions and clear pricing
An efficient and secure login and payment experience
No unexpected fees at checkout (which can lead to instant cart abandonment)
Sales tax compliance challenges
When you offer products online, your customers can come from any state, so you need to be able to determine where you owe sales tax based on where your customers live, not just where you operate. This is because many states have created economic nexus laws for online sellers based on revenue or transaction thresholds in the state.
These thresholds vary significantly from state to state. In Pennsylvania, for example, the revenue threshold is only $10,000, while in Alabama the sales threshold is $250,000. States also treat the period for meeting the threshold differently. In some states, it’s based on the previous or current calendar year. In other states, it’s a rolling 12-month period, which could span two calendar years. You’ll also need to register for a permit before you can begin collecting sales tax, and then remit the taxes and file a sales tax return based on the schedule for each state.
For most small retailers, this sales tax complexity introduces an extraordinary burden on the accounting team, and liability for the business which will only become more overwhelming toward the end of the year. Hire a full-time tax expert to manage the process or consider an outside firm that can help you automate the process.
Omnichannel and global selling opportunities for SMBs continue to grow
Today’s modern retail landscape also allows businesses of all sizes to offer their products and services to the global market via multiple online channels and global prevalence of marketplaces like Amazon and eBay. In 2020, this expanded customer base may translate to higher sales and global growth in markets that were previously unavailable to SMBs and online retailers.
With that said, there are still challenges that small business owners must consider when offering their wares to an international market. Cross-border selling laws and fees can create headaches for retailers and customers alike as noncompliance can mean late or cancelled deliveries and an ultimate loss of revenue for SMBs.
As any small business owner knows, customer attrition can be the difference between the success and failure of a company. SMBs must be cautious when rolling out their products and services to a global market to ensure that a consistent, positive customer experience isn’t sacrificed for a jump in sales.
Admittedly, the road to small business success is paved with complexity and logistical and regulatory headaches. But by optimizing your ecommerce backend with automation, preparing your business for all types of payment services, and capitalizing on global selling opportunities, you can position your company for success in 2020.