Avalara AVLR

Shopify small merchants use Avalara TrustFile while Shopify Plus use Avalara AvaTax.

https://www.avalara.com/us/en/products/integrations/shopify…

https://www.avalara.com/us/en/products/integrations/shopify-…

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I’m in the web development business by trade, and I’ve set up a few Shopify storefronts before. I’ve never utilized Avelara in that context, but did some quick research into it for a customer that was looking for options to help them remit sales tax appropriately.

Based on my experience (US mostly, a teensy bit of experience with Canada), Shopify and other similar ecommerce platforms (Volusion, Amazon, ) all do a decent job of collecting sales tax on each order based on the customer’s location relative to where the seller has nexus. It’s up to the seller to define where they have nexus, and the ecommerce platform collects state and local taxes accordingly.

Where it seems to me these platforms fall flat is on the remittance side. So this line quoted a few posts above jives with Shopify’s biggest tax related shortcoming from what I’ve seen:

Shopify doesn’t file or remit your sales taxes for you.

That’s where Avalara can help, because with it’s plugin it taps into Shopify order data and allows sophisticated remittance reporting to make sure you know exactly how much to remit to whom when the time comes to forward all the collected taxes.

While I think Avalara is probably very helpful software, there are competitors. TaxJar and TaxCloud come to mind. Here’s a comparison of these three:

https://www.capterra.com/sales-tax-software/compare/75673-11…

Avalara does appear to have the edge on use tax and VAT. It’s also more pricey.

If you want a high level bear case for Avalara from an obviously biased source, here’s a page on the TaxJar site that meets that scratches that itch:

https://www.taxjar.com/comparisons/taxjar-vs-avalara/

FWIW, TaxJar is the option I recommended in addition to Avalara for the customer I had that was weighing these options.

Cheers,

Eric
no AVLR position

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Great info squidboy. As for the comparison you linked to, I actually reported that to Avalara management about two months ago because it is so misleading (didn’t hear back :). Almost none of the information in that comparison is fact. Full disclosure - I have a 6% position in AVLR but I am considering reducing or selling it because I need them to achieve 30+% revenue growth for the next couple of years to feel comfortable with today’s price, unless they achieve remarkable growth in profitability and/or FCF in the style of PAYC or VEEV, which seems like a possibility but too speculative. I think it’s more likely they follow the path of something like WIX (who also had a nice move toward positive free cash flow a while back but has since been struggling with low and slowing revenue growth). I originally bought it in Q2 when there was good visibility into their near-term acceleration during a period when many other SaaS businesses were guiding to deceleration against tough comps. Now that we’re moving toward the end of that period, I will probably rotate out of AVLR. If they continue their impressive customer growth they will probably do great, but I think I’ll move into something I am more confident in.

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