Farmers are increasingly looking to leverage e-commerce platforms to sell directly to consumers, bypassing traditional supply chains and increasing profitability. As the industry faces an increase of 9%, tax experts warn businesses of increased liability if not managed properly.

Companies in the US livestock farming industry have seen a record value of e-commerce sales. Online sales surged to $652 billion, according to the latest annual data, an increase of 9% compared to the previous year.

The findings bring into focus an industry where small to medium producers can capitalize on market connectivity nationwide. E-commerce sales now account for 72% of total sales value in the industry. Trends are predicted to continue as part of sustained transition.

The research, collated by State and Local Tax specialists at Source Advisors, analyzes up to 5 years of manufacturing industry e-commerce sales in the USA using the latest available data** to highlight the sectors which are capitalizing on ecommerce to fuel growth.

Tax experts warn companies to be aware of increased liability from local tax which follows ecommerce expansion. A common pitfall when selling products online across multiple states.

Analyzing state level growth in food manufacturing, Illinois saw the greatest real term increase in revenue from all activity — a $6.9 billion surge. This was an increase of 13% compared to the previous year. Next highest was Iowa with a $6.7 billion increase in revenue, 15% higher than the previous year, followed by Texas with a $5.7 billion increase, which represented a 10% year on year increase.

Chris Vignone, Managing Director at Source Advisors, says:

"The benefits in expanding e-commerce operations is clear, and revenue taken from online operations is only likely to increase further. Companies that are expanding their market presence across the USA must be acutely aware of how each sale affects their tax liabilities."

"Selling products in multiple states means navigating a complex web of local tax regulations, where each state's rules determine tax obligations. This can lead to significant tax burdens if not managed properly. Companies must invest in robust tax management systems to avoid unnecessary overspending on taxes."

Greg Zakowicz, Senior e-commerce Expert at Omnisend:

"Working with food e-commerce businesses across the US, we've seen several factors drive online food sales growth. Convenience is key- customers want flexible shopping and delivery whenever they want. Food brands meeting this demand with e-commerce and delivery options will see major growth. For food companies, e-commerce means reaching customers nationally, gaining valuable data to improve operations, and levelling the playing field for small brands to find a niche. Analyzing buying habits helps tailor marketing, optimizes supply chain, and builds loyalty."

"To expand nationally via e-commerce, focus on user experience. Offer incentives, use data to personalize service and give options like scheduled delivery and curbside pickup. E-commerce success is convenience. With the right strategy, food brands can tap potential customers across the U.S."