How Everlane navigated global tax complexity to scale smarter

Expanding into international markets is a high-stakes challenge for e-commerce retailers. Each country, and in some cases, each region, has its own requirements around tax registration, calculation, collection and remittance. The penalties for non-compliance are steep, and so is the internal lift required to get it right. Staffing up with the necessary tax expertise for every market can make expansion expensive and slow.

Everlane, known for its commitment to transparency and ethical production, saw early signs of this strain as demand for its essentials surged globally. The brand needed to navigate a tangle of value-added tax rules and regional sales tax enforcement without pulling focus from product and customer experience.

The hidden cost of going it alone in the EU

According to the European Commission’s 2024 Annual Report on Taxation, small and medium-sized enterprises selling into or within the EU face VAT compliance costs averaging 2.5% of turnover. While enterprise-level companies may offset some of that cost through scale and dedicated tax teams, the expense is still substantial, especially in regions with complex filing, registration and reporting requirements.

For global e-commerce fashion brands, that 2.5% hit can quickly erode margins or make certain markets financially unviable. With evolving tariffs and regulatory shifts always in play, reducing the overhead tied to compliance isn’t just a nice-to-have, it’s critical to scaling profitably and sustainably across borders.

To stay lean while scaling globally, Everlane chose to work with a merchant of record that could manage tax compliance across markets freeing their internal team to focus on growth. After evaluating its options, the brand chose Reach.

“One major area that Reach has helped us with is tax compliance, especially in Europe,” said Augustine Farias, vp of logistics and operations at Everlane. “We don’t necessarily have the expertise or capacity internally to comply with all the regulations in filing taxes in countries in Europe and Australia. Reach handles it all.”

How offloading compliance impacts global growth

Prior to partnering with a merchant of record, Everlane was shipping to around 20 countries and managing operations through a centralized internal structure. That worked in the brand’s earlier stages, but it couldn’t scale without operational risk or a sharp increase in cost.

“Before we launched with Reach we didn’t have a lot of presence outside of the U.S.,” said Farias. “Reach enabled us to open up to international markets. Now we sell our products to customers in over 130 countries, and we offer our pricing in over 80 different currencies.”

For fashion brands, compliance tends to be the hidden cost of international growth. Local filing obligations, threshold tracking and remittance cycles vary widely, and there’s no margin for error. A missed registration or late filing can trigger fines, delays and reputational damage in high-opportunity markets. Even the decision to display tax-inclusive vs. tax-exclusive pricing at checkout can have a meaningful impact on customer trust and retention.

Rather than absorb those risks or try to build out tax expertise in-house, Everlane made the decision to offload regulatory complexity to an external partner that could ensure compliance with local requirements across every market they entered.

Boosting conversions and building trust with checkout localization

The benefits of working with a merchant of record extended beyond tax for Everlane. The brand also localized its checkout experience, offering customers pricing in their local currencies and support for local payment methods. That shift played a meaningful role in increasing conversions when unfamiliar checkout flows often lead to abandoned carts.

“With Reach, we were able to increase the conversion rate by over 30% and also support and enable more payment options that are local to specific markets,” said Farias.

For Everlane, outsourcing tax wasn’t about cost-cutting — it was about protecting focus. Rather than divert resources to build up an internal compliance function, the brand was able to remain lean and customer-centric while still entering new markets confidently.

“Reach provided a one-stop solution for cross-border payments with currency conversion, payment options with local acquiring capabilities and solutions for tax compliance,” Farias added.

For brands with global ambition, growth isn’t just about acquiring new customers; it’s about making every market feel native. Everlane’s success shows that handling taxes behind the scenes isn’t just smart operations. It’s part of delivering a seamless brand experience, wherever shoppers find you.

Sponsored by Reach