While its international e-commerce sales are growing at a steady clip, Spreadshirt also spends more time dealing with the demands of taxing authorities.

Spreadshirt Inc. has built its business since 2002 on selling T-shirts to consumers around the world. And sales are growing steadily for the Germany-based e-retailer as consumers become more comfortable buying from websites in other countries.

“European consumers know that, even if Amazon isn’t in your country, it will deliver to your country,” says Spreadshirt CEO Philip Rooke. “In Europe at least, it’s training consumers to think about cross-border e-commerce.”

That’s helping Spreadshirt—which operates localized e-commerce sites in the United States, Germany and 16 other countries and ships to 150 more nations—steadily increase its online sales. Rooke says the retailer’s web sales grew to 107 million euros ($132 million) in 2017 from 92 million euros ($113 million) in 2016, an increase of 16.8%. Germany is Spreadshirt’s largest market, accounting for 32% of sales, followed by the U.S. at 28%.

Spreadshirt is No. 500 in the Internet Retailer 2017 Top 1000 ranking of North America’s leading online retailers and No. 266 in the Europe 500.

Phil Rooke, CEO, Spreadshirt

Philip Rooke, CEO, Spreadshirt

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But the growth of e-commerce also is prompting governments to seek ways to collect more taxes from online orders shipped across borders, Rooke says. Automation is helping customs officials scan more parcels crossing borders, leading to more demands that e-retailers collect taxes. And in some cases, countries are changing the laws to raise more taxes from cross-border e-commerce. For example, a new law taking effect July 1 will require tax collection on more goods shipped to Australia, Rooke says.

“Increasingly, governments are looking to how they can tax cross-border e-commerce, and that’s making things a little more complicated,” Rooke says. Spreadshirt incorporates customs duties and applicable sales taxes into the prices it charges shoppers so that they don’t have to waste time collecting their orders from customs offices.

On the positive side, the growth in online shopping across borders has led shipping companies to provide faster and more reliable delivery around the world, Rooke says. And the major carriers—Spreadshirt uses DHL, FedEx Corp. and UPS, as well as some regional carriers—now provide better services for consumers wishing to return items purchased from websites abroad.

There also are improved global address-verification services, which reduces costly returns of orders, Rooke says. “If I send a parcel to Tanzania and it’s bounced back to me, and I have to pay shipping to Tanzania twice, that’s not good,” Rooke says. But he said the combination of shipping companies more often making multiple tries to deliver a package and more accurate services that can verify an address is legitimate has reduced Spreadshirt’s bounceback rate from around 3% to under 1%.

And that’s a big deal for an online retailer that ships to nearly 170 countries around the world.

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