How much are consumers spending online, and what do merchants pay for shipping in relation to the overall revenue from those e-commerce orders?
These are just two questions answered in the recent 2021 E-Commerce Shipping and Fulfillment Benchmarks Report.
Sourced from Shippo customers of all sizes and across industries, results cover average orders for different products, shipping expense and overall growth of e-commerce over the past two years.
Among the findings:
The average e-commerce order was $78.09, including taxes and shipping. Electronics lead the way for products with an average order of $129.72, followed closely by sports+outdoor at $111.44. Also close together were jewelry at an average order of $95.47, apparel at $88.74 and health+wellness at $85.16. Purchases for beauty+skincare came in at an average order of $63.78.
Electronics also lead for what merchants spent on shipping as a percentage of overall revenue, followed in order of most to least by sports+outdoor, beauty+skincare, (these next three were close) health+wellness, jewelry and apparel.
Big yearly bumps
The survey found that between April 2019 and March 2021, total e-commerce order value increased exponentially. Year over year from 2019 to 2020, e-commerce increased 111% in the spring, 84% in the summer and 94% over the fall and holidays. In the winter, e-commerce jumped 91% year-to-year 2020 to 2021.
Package deliveries year-over-year also skyrocketed, fueled no doubt the lockdowns of 2020. Year over year from 2019 to 2020, package deliveries jumped 147% in the spring, 130% in the summer and 101% over the fall and holidays. In the winter, e-commerce jumped 96% year-to-year from 2020 to 2021.
The takeaway, says Shippo? With both order values and package deliveries trending upwards, even as we move beyond the pandemic-era boom, it’s important to measure how your bottom line is influenced by both customer spending and shipping costs.
Sales Tax Obligations Comes Into Play
All great information, but keep in mind that growth in sales and revenue has a big impact on your sales tax obligations. Especially as your sales via e-commerce can happen anywhere in the country, or world. As you’re growing in online sales, so could your sales tax obligation based on meeting new economic nexus thresholds in additional states.
And when it comes to understanding your e-commerce related requirements, you have to discuss drop shipment scenarios too. It can be tricky to determine who owns the sales tax responsibility. And if not managed properly you can easily lose 8% - 10% or more of your profit margin.
If you’re looking for help in navigating sales tax and understanding where you have an obligation, contact TaxConnex. We act as your outsourced sales tax department, completely removing the burden of sales tax from you and your business.