Behind the Cute Chaos

When a product like the Labubu Doll goes viral, the headlines are all about the frenzy: sold-out shelves, TikTok trends, and overnight cult status. But behind the scenes of this retail phenomenon lies a far less visible story: the tax complexity that fast-scaling businesses must navigate when success arrives at speed.

At Vertex, we regularly see how quickly tax complexity can escalate when indirect tax isn’t considered early in a company’s growth strategy especially during moments of viral success like Labubu.

When Demand Explodes, So Does Complexity

Imagine you’re a brand like Pop Mart, the company behind Labubu. One day, you’re managing steady growth. The next, you’re shipping thousands of units across borders, onboarding new suppliers, and entering unfamiliar markets. It’s an exciting moment, but one that’s layered with complex compliance considerations.

The reality is that indirect tax is rarely top of mind in these moments. The focus is on revenue and growth, and anything else is just seen as a barrier. But that mindset can be costly. When tax is treated as an afterthought, it can quietly build into a barrier, slowing momentum and introducing risks that are harder to manage at scale.

From Factory Floor to Checkout Cart

The journey of a viral product like Labubu spans multiple tax touchpoints:

Manufacturing: Sourcing raw materials across borders introduces VAT/GST complexity and input tax recovery challenges.

Logistics: Drop shipping, third-party fulfilment, and cross-border movement create exposure to customs duties and import VAT.

Retail Expansion: Entering the US market means navigating over 11,000 sales tax jurisdictions, economic nexus thresholds, and marketplace facilitator rules.

Online Sales: Checkout tax accuracy, exemption certificate management, and platform liability all become high-stakes issues.
Each of these stages introduce risk. And the faster you scale, the harder it is to keep up.

Why Automation Isn’t Optional

In a viral moment, speed is everything. Manual tax processes simply can’t keep pace. That’s why automation isn’t just helpful, it’s essential.

At Vertex, we work with businesses to implement tools that enable agility and compliance at scale. We support fast-scaling businesses with a suite of automation tools designed to simplify indirect tax across regions and channels:

• Vertex O Series (Sales & Use Tax and VAT): Provides real-time tax calculation across ERP, ecommerce, and billing systems, supporting both US and global VAT requirements.
• Vertex Exemption Certificate Manager (Sales Tax): Automates the collection, validation, and management of exemption certificates to reduce audit risk and manual effort.
• Vertex Validator: Enables real-time validation of VAT registration numbers across jurisdictions, helping ensure compliance and reduce fraud exposure.
• Vertex Indirect Tax Returns (VITR) (Sales & Use Tax): Streamlines the preparation and filing of returns across multiple US jurisdictions, improving accuracy and efficiency.
• Vertex VAT Compliance: Streamlines VAT/GST return filings, meets MTD requirements, and enhances reporting and audit performance

While these tools help reduce risk, they also unlock growth and new opportunities by enabling faster, more confident decision making. They allow businesses to scale resiliently, knowing their tax infrastructure can keep up.

Tax as a Growth Enabler

Here’s the truth: tax isn’t just a compliance issue. It’s a growth issue. When managed effectively, it can help unlock new markets, streamline operations, and enhance the customer experience. But if overlooked, it can introduce friction that slows momentum and complicates expansion.

To keep pace with today’s retail landscape, businesses need to view indirect tax as a strategic consideration from the outset. When integrated early, it supports smoother expansion, reduces operational friction, and helps brands turn viral moments into sustainable growth.

Let’s Keep the Conversation Going

If you’re a retailer navigating rapid growth, or just curious about how tax can support your expansion, let’s talk about how we can turn complexity into clarity, and chaos into opportunity. Vertex O Series is an indirect tax software solution designed to support scalability and provide tax content for various industries.