Marketplace Observatory

The Role of the Merchant of Record in Facilitating International Sales

A Merchant of Record can significantly simplify the process of expanding a brand into the international market.

Published 20 May 2024

In the era of global e-commerce, expanding one’s business beyond national borders offers numerous opportunities but also complexities, particularly in terms of tax and administrative compliance.

A Merchant of Record (MOR) can significantly simplify this process, greatly facilitating entry into the international market.

Merchant of Record: What It Is

A Merchant of Record is a legal entity that acts as the official seller of goods or services to end consumers.

This role involves the responsibility of managing financial transactions, VAT collection, customs, and regulatory compliance in different countries.

Using an MOR eliminates the need for sellers to establish separate legal entities in each country, greatly simplifying international expansion.

The Merchant of Record, also known as MOR, offers a beneficial option for making sales (especially online), freeing sellers from burdensome operational tasks such as administrative and tax duties.

Through the MOR, sellers can use a VAT number provided to them, making the MOR the entity that actually finalizes the transaction with the consumer.

In this role, it assumes legal and tax responsibility for the operation, managing all related obligations, such as VAT record-keeping, regulations on the right of withdrawal and warranty, as well as privacy and data handling aspects, in accordance with applicable legal provisions.

Who Uses the Merchant of Record?

Companies that use the Merchant of Record service fall into two categories:

  • B2B companies, which often lack the infrastructure necessary for online sales, can benefit from the Merchant of Record (MOR) to make operations more efficient and simplify interactions with customers.
  • B2C companies focused on international expansion. These can benefit from a Merchant of Record, which facilitates the simplification of fiscal and legal procedures. Dealing with sales abroad often requires specific fiscal representation for each country and managing related bureaucratic compliance.

Advantages

Using a Merchant of Record offers a series of key benefits, significantly improving the operations of companies that choose to rely on this solution. Here is a structured overview of the main advantages:

Simplification of Processes:

  • Tax and Legal Compliance: The MOR takes responsibility for regulatory compliance in every market, thus minimizing legal risks for the seller.
  • Transaction Management: Includes payment processing, managing local currencies, and dispute resolution, significantly simplifying these complex operations.
  • Operational Efficiency: The MOR reduces the administrative burden on the seller, allowing companies to focus on their core business.

Expansion of Expertise:

  • Access to Specialized Expertise: Companies benefit from the MOR’s deep knowledge and experience in various aspects of international trade and online management.
  • Delegation of Customer Service: The MOR handles all interactions with the end consumer, including customer service and post-sale support, ensuring a high-quality user experience.

Content and Quality Control:

  • Content Supervision: Companies can maintain control over the quality and content of the products offered

Infrastructure for Internationalization:

  • Utilization of Existing Tax Structures: By using an MOR, companies can easily expand internationally, taking advantage of tax structures already established and optimized for global expansion.

Together, these elements provide a solid foundation for companies wishing to expand their presence in the global market while simultaneously reducing risks and administrative burdens.

Yocabè Merchant of Record: Your Strategic Partner for Selling on International Marketplaces

Yocabè offers the Merchant of Record service to assist brands in expanding on global marketplaces. With a complete “turnkey” solution, Yocabè takes charge of managing all administrative and fiscal matters, allowing brands to access new markets without having to navigate complex local regulations.

Services Offered by Yocabè:

Analysis and Compliance Requirements:

  • Yocabè examines the regulatory requirements and specific obligations of each market, ensuring compliance and reducing legal risks.

Consultation and Catalog Selection:

  • Offers strategic support in selecting products and positioning the catalog, maximizing market effectiveness.

Market and Competitiveness Analysis:

  • Conducts in-depth studies on competitors, price positioning, and market dynamics, providing strategic insights for optimal positioning.

Operational Management:

  • Coordinates logistics, billing, customer service, and necessary technologies for effective marketplace operations.

Profitability Analysis and Profit & Loss Model Creation:

  • Develops financial models to forecast profitability and effectively manage costs associated with selling on marketplaces.

Technical Integrations:

  • Implements advanced technological solutions to integrate brand systems with marketplace systems, ensuring smooth and automated operations.

Conclusions

Using a Merchant of Record like Yocabè can radically transform a brand’s approach to international expansion.

With specialized support from Yocabè, brands can fully leverage the opportunities of global marketplaces without being overwhelmed by fiscal and administrative complexity.

"Given the challenges of global e-commerce, relying on an MOR is a strategy that can lead to significant competitive advantage. Book a free consultation now and discover the benefits of relying on a player like Yocabè."

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