4 Questions to Ask Your Sales Tax Technology Partner before Black Friday

by Sarah Craig September 21, 2020

We’ve talked before about how site performance impacts your e-commerce site’s conversion rates – and therefore your bottom line. This is especially important during high traffic times such as the Black Friday / Cyber Monday (BCFM) period. Despite concerns about the economy and unemployment due to COVID-19, industry organizations including the ICSC predict an increase in spending this holiday season. How much of an increase is hotly debated. However, there’s one thing seemingly everyone can agree on: unprecedented e-commerce growth. Most consumers are still hesitant to shop in-store due to the pandemic and plan to do a majority of their shopping online this holiday season.

Hopefully you’ve already done your due diligence and are ready for an increase of traffic on your site.  However, have you considered if your third-party technology partners, particularly your sales tax technology partner, have prepared their systems to manage unprecedented levels of e-commerce traffic? If your sales tax partner is connected to your shopping cart and provides calculations on each sale, your store has to call their API every time a transaction takes place. If your partner’s API isn’t prepared for a massive increase in traffic over the BFCM period, their response times could be delayed which can slow down your e-commerce store. 

Outages and performance issues can have massive impacts on your revenue, especially during peak shopping periods like BFCM. Did you know a reduction in performance as small as 100 milliseconds is enough to reduce your conversions by one percent?

Best case scenario, you catch these API delays as they happen and cut off your connection to the sales tax technology partner to protect your conversion rates and revenue. But then you’re not charging sales tax to your buyers and you’ll have to cover those costs on your own which eats into your profits. Not a great solution. 

Here’s a few questions you should ask to ensure your sales tax technology partner is ready for  the Black Friday / Cyber Monday shopping period:

1. When is the last time you’ve had an API outage? If your sales tax technology partner’s API has had outage issues in the past, this is definitely something you’ll want to keep an eye on. Your sales tax technology partner should have real-time and historical outage information readily available for review, including why outages occurred and how they were resolved. At TaxJar, we guarantee 99.99% uptime, while our competitors only commit to a minimum service uptime of 99.5%. Those tenths of percentage points may seem small, but the reality is that’s an entire day of downtime!

2. What type of testing are you conducting to ensure your API is ready for BFCM traffic spikes?  At TaxJar, we’ve recently gone through a thorough and exhaustive exercise to ensure our API endpoints are ready for our customers to do major business over the BFCM period. First, we looked at our normal transaction volume on a given day and multiplied that by 10x. Our internal testing tool takes historical transaction data, anonymizes it and then replays it through our system. The use of historical transaction data versus simulated data is an important distinction because we want to ensure we’re creating a realistic load for our systems instead of randomized/simulated traffic that may not reflect actual shopping trends. We use that historical data to conduct several system tests including:

  1. Load tests – how does the system behave under an expected load – in our case 10x the normal transaction volume we see on a given day
  2. Stress tests – what are the limits of our system’s capacity
  3. Soak tests – can the app hold the increased traffic load for long periods of time
  4. Spike tests – can the system handle abrupt spikes in traffic, like the start of a Black Friday sale right at midnight!

If your sales tax technology partner isn’t conducting all of these tests prior to BFCM, their API may not be prepared for an increase in online shopping traffic.

3. What is the average response time of your API during BFCM testing? In the fast-paced world of e-commerce, milliseconds matter. Shoppers can have very short attention spans, especially during shopping events like Black Friday / Cyber Monday. If your sales tax technology provider’s API is slowing down your shopping cart, it could have big impacts on your bottom line. We’re proud to report our API maintained production levels of performance during our recent testing with an average 21ms response time. 

4. What are your contingency plans over the Black Friday / Cyber Monday period? At TaxJar, we have engineers on-call 24 hours/day. If error rates or latency increases, our engineers are alerted and can quickly identify and resolve issues. Our API also runs in multiple availability zones. If there’s an outage that impacts a data center, our API will automatically move to a different data center without service interruptions. TaxJar also offers  regional tax rates, instead of our normal “Rooftop-level” calculations,  as a backup if our API is down. This ensures you’re still collecting some sales tax from your customers and reducing out of pocket expenses.

Needless to say, TaxJar is buttoned up and ready to support your e-commerce business during the holiday season!

Ready to get started with TaxJar’s API? Sign up for a trial of TaxJar Professional today!

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