Missoma makes Black Friday sparkle with Avalara

Missoma is a contemporary British jewellery label known for its bold designs that use colourful semi-precious stones. The brand was set up in 2008 and initially sold through boutique retailers before launching an ecommerce site three years later to expand its reach. 

After a period of steady growth in both domestic and international markets, 2016 saw the start of a sustained increase in demand from foreign buyers. In 2018 Missoma’s export business grew by over 300% and the following year, the brand was listed as one of Britain’s fastest-growing private companies in the Sunday Times’ Fast Track 100. Today, 95% of Missoma’s sales are online and the business is continuing to grow apace.

Metka Koskas joined Missoma as financial controller in 2017 and she was the first person the business employed in a finance function. That year, growth in the EU meant the business was going to breach the distance-selling thresholds in a number of countries, which meant VAT registration was required. Metka knew that filing VAT returns with foreign tax offices would be a headache, and so she looked for a compliance partner to help. She says, “Filing VAT returns in multiple jurisdictions would be quite time consuming. Each country has its own filing calendar, systems and processes – not to mention language needs. My time is much better spent doing more strategic work than on keeping track of our VAT submissions.”

Metka approached a number of companies to enquire about compliance services but opted to go with Avalara. She found that Avalara ticked all the boxes and was also more competitive on price. She says, “Some providers wanted to charge me thousands of pounds to apply for registrations. With many thresholds being breached, I was keen not to pay more for compliance than necessary.”

Today, Metka has a small team to support her and they use Avalara’s online portal to manage Missoma’s filing activity. The business uploads a single file of transaction data into the system every month and Avalara’s VAT engine processes the data to create a VAT return for each jurisdiction. The team can review the returns before they are filed automatically.

Metka looked to Avalara again in 2019 when Black Friday and Cyber Monday came around in the U.S. and sales went through the roof. Due to the unprecedented surge in demand, sales tax thresholds were breached in several states, which meant Missoma was required to register for sales tax. Metka says, “Our sales in the U.S. had been growing but we didn’t have economic nexus anywhere until Black Friday, when holiday season sales exceeded all expectations and pushed us over the threshold in a number of states.”

Collecting sales tax requires accurate real-time calculation but the U.S. has thousands of rates and rules that make it very difficult to do this manually. Metka decided that Avalara’s cloud-based software, AvaTax and Avalara Returns, would be the perfect solution. 

AvaTax has a pre-built integration with Missoma’s ecommerce platform, Shopify Plus, and this ensures the correct rate of sales tax is applied at checkout. Avalara Returns has direct access to AvaTax, plus transaction data from other sources, and uses this to file returns in 25 U.S. states on Missoma’s behalf.

Happy that VAT and sales tax compliance is fully under control, Metka has recommended Avalara to a number of colleagues and peers. She says, “Now whenever Black Friday comes around, it doesn’t cause any compliance headaches – I know we are compliant and in good shape for when the next sales boom occurs.”