Customer experience is the new competitive battlefield. What’s your secret weapon?

With increased inflation, delayed supply chains and a cost-of-living crisis, the e-commerce landscape has got a lot tougher of late. And with over 150 online marketplaces jockeying for position, the competition is fierce.    

So, the customer experience you offer to both consumers and sellers needs to be better than ever, with enhanced journeys from basket to checkout and a simple and effective returns policy. How can you make sure users stay on your site - and keep coming back?

This is why it’s important to audit your customer or seller’s experience from the moment they land on your marketplace, through to checkout. Are there any moments of friction? What could you improve? What could you do differently from your competitors?   

Great expectations

Consumers expect your platform to look good. They also expect speed, convenience, and choice. While sellers expect to be able to sell their products quickly, easily, and profitably, both want a frictionless experience. And that is especially true at checkout. The process needs to be slick, speedy, and effortless. 

So, while they may not have thought about how VAT is calculated, you can be sure if the total bill is more than they were expecting, they will notice. And this can damage the whole experience, even cause them to abandon the basket and go elsewhere.

Standing out     

Given the recent changes in EU VAT legislation, such as the introduction of the One-Stop Shop (OSS) where businesses that trade across the EU can register for VAT in one state and pay VAT to all other member states via a single VAT return, and US Sales Tax like the landmark South Dakota v Wayfair case in 2018 which ruled that states can require out-of-state sellers to collect and remit sales tax, the indirect tax landscape is highly complex. 

You need to be confident as a marketplace that you understand all the VAT liabilities, no matter where the customer or seller is based. For example, the DACH market has differences in the details of tax reporting and compliance. Businesses that trade in Germany and Austria are required to submit monthly or quarterly VAT returns whilst in the broader EU, the reporting period may be less frequent.

Your competitors may be concentrating on the shiny, new interface of their platform. Or drilling down data analytics to increase personalisation. Or improving their review system. Or trying to attract sellers with discounted fees. All of these have their place. 

What happens behind a transaction, however, has just as much impact as the product on the surface. Once the payment process becomes too difficult or lengthy, you’re in danger of losing the customer for good.

In addition, sellers do not want to be selling products at a loss. If you miscalculate the VAT rate, the difference between zero or full rate could be more than the margin on the product, which may prompt them to leave your platform. 

By focusing on the all-important indirect tax calculations behind the scenes, you can make a real difference to the overall customer experience.

How does a tax engine help?  

It’s important to determine whether the buyer, seller or your marketplace is responsible for each line item. If a mistake is made and an incorrect party pays, it doesn’t necessarily mean those liable are cleared of their responsibilities. Imagine how it would negatively impact their experience, if the seller got an unexpected charge further down the line.

This is where an automated tax engine comes in. It can handle hundreds and thousands of transactions in real time. It will:

●    Make sure the correct tax rate is charged
●    Make it clear who is responsible for paying the VAT   
●    Create correct and compliant invoices 
●    Keep accurate records     

As well as producing the invoice, the tax engine also sends a transaction history to each seller with the right amount of VAT identified for the relevant jurisdiction. This makes it easy for the seller to report the sale in their one-stop-shop reports.

And so, a tax engine means doing business on your platform becomes straightforward and frictionless, for consumers and sellers alike. It also saves a great deal of manual work and reduces the risk of human error.   

Want to find out more about how the secret weapon in your customer experience? 
Download our latest guide, Great bodywork but what’s under the bonnet?