{"id":9541,"date":"2024-03-25T09:11:52","date_gmt":"2024-03-25T08:11:52","guid":{"rendered":"https:\/\/eurotext.de\/en\/?p=9541"},"modified":"2025-01-30T11:56:24","modified_gmt":"2025-01-30T10:56:24","slug":"fashion-e-commerce-in-the-us-pros-and-cons-of-a-growing-market","status":"publish","type":"post","link":"https:\/\/eurotext.de\/en\/blog\/fashion-e-commerce-in-the-us-pros-and-cons-of-a-growing-market\/","title":{"rendered":"Fashion e-commerce in the US: Pros and cons of a growing market"},"content":{"rendered":"

The political and economic system of the US has created an incredibly large wealth gap between the upper 2% of the super-rich, and the remaining 98%, with a rapidly declining middle class and ever-increasing numbers of low-wage earners. Fashion e-commerce entrepreneurs will have to stand out from the crowd in more ways than one. <\/p>\n

Making ends meet in the US is becoming increasingly difficult, leading to people working two or more jobs, just to be able to survive paycheck to paycheck. Online shopping, and specifically fashion e-commerce is therefore \u2013 understandably \u2013 low on the list of necessities. The market segment is governed by the cheap and fast fashion segment, which is why the Chinese online giant Shein is earning the lion’s share (reportedly more than $30 billion during the fiscal year 2023) of the fashion e-commerce segment in the US.<\/p>\n

Americans spend an average of just $50 – $100 per month online, not even 50% of that on fashion. Despite these low individual sales, anyone interested in entering the US fashion e-commerce market must consider the enormous number of possible end customers at a population of over 341 million. Internet saturation in the US has now reached 97%, however, the rural (and significantly less populated) states along the so-called Bible Belt are stagnant at just 60% saturation. Nevertheless, the possible turnover could be staggering. However:<\/p>\n

Better, more dynamic online shops for fashion e-commerce<\/h2>\n

Americans are constantly inundated with adverts on television, radio, and the Internet. Much more so than consumers must endure in Europe. A successful fashion e-commerce online shop<\/a> will address its clientele specifically, with easy-to-read, concise, informative product information, and favorable payment, delivery, and returns options. Online offerings should be updated frequently<\/a>, and special offers, discounts, campaigns, and giveaways will further drive traffic. The availability of AI chatbots<\/a> for frequently asked questions poses another distinct advantage and is worth serious consideration. Another important factor is language. Any online shop in the US must be available in English and Latin American Spanish<\/a>. Spanish may not be recognized as an official language of the US, but the numbers don’t lie: over 42 million people in the US speak Spanish at home, and it is the most taught foreign language in all 50 states.<\/p>\n

Fashion e-commerce in the US of A could therefore be a very interesting proposition indeed. The right kinds of products, keen pricing, and excellent marketing \u2013 why you\u2019ve got a winner right there \u2026 if the tax laws in the 50 states weren\u2019t the most confusing on the planet, turning selling online into a possible tax nightmare.<\/p>\n

US sales tax is governed at the state level. Each state can decide whether to have a sales tax, and forty-five states plus Washington, D.C., all do. Only four states \u2013 Delaware, Montana, New Hampshire, and Oregon \u2013 do not have a sales tax. Most states that do require sales tax also allow local areas (like cities and counties) to charge their own sales tax. When purchasing at a brick-and-mortar store in the U.S., you might see that you paid an odd number, like 6.75% in sales tax.<\/p>\n

This is because you are paying a statewide tax, city and\/or county taxes, and maybe a \u201cspecial taxing district\u201d tax rate. Sufficiently confused yet? No? Hold my beer.<\/p>\n

In the U.S., e-commerce sellers (offline or online) are only required to collect sales tax in states where they have \u201csales tax nexus\u201d.\u00a0 However, you must have a permit before you collect sales tax from customers.<\/p>\n

What is the US sales tax nexus?<\/h2>\n

Sales tax nexus is just a fancy, legalese way of saying that you have \u201croots\u201d in a state.<\/p>\n

Here are just a few ways that you might create nexus:<\/p>\n