With a rich, 20-year history in skincare manufacturing and deep roots in the dermatology community, DRMTLGY was "born of the belief that evidence-based, dermatological skincare should be available to everyone."
Today, the company provides high-quality science-backed skincare via a full range of more than 40 products, from exfoliants and cleansers to sunscreens, serums, lipcare, and more, for people of all ages and with all skin types, tones, and concerns.
DRMTLGY provides state-of-the-art formulas at a reasonable price — so its products are unsurprisingly very popular. The company sells its line of skincare solutions across the United States, transforming more than four million skincare routines.
Business is booming. But success can, unfortunately, create headaches for the people in charge of finance at DRMTLGY.
That's because of complex sales tax rules that apply to the products that DRMTLGY sells, and because of the company's business model, which involves selling products on Amazon through its own website, on Shopify, and via other channels.
Fortunately, after struggling with a past provider that was less than reliable, DRMTLGY has found Numeral, an expert-backed solution that meets all their sales tax needs.
Consultant errors left DRMTLGY vulnerable to audits and penalties
In designing its skincare line, DRMTLGY's focus is on creating effective formulas and using clinically proven ingredients to create best-in-class skincare solutions.
But the company wasn't handling complex sales tax obligations well, because the compliance solution they’d found wasn’t effective. "We used a consulting firm," explained July Bocabeille, the company’s chief financial officer. Unfortunately, that consulting firm left a lot to be desired.
"There was a lack of transparency and an overall lack of quality." Bocabeille said. "Data was not verified, errors were made, and some filings were incomplete." Bocabeille also explained that, what’s more, the consulting firm neglected to consider Amazon sales when determining whether the business had established nexus in the places where it has customers.
Inaccurate nexus tracking raised a major compliance issue
The issues with accurate nexus tracking were very serious. So Bocabeille knew that a change was necessary as soon as she came on board in December of 2024. The company had lost trust in the sales tax consulting firm, and with good reason: it was putting the business at serious risk.
Accurately tracking nexus is critical because once a company has established nexus within a state, the company must register with that state and begin collecting and remitting sales tax on a periodic basis: quarterly, annually, or monthly, depending on sales volume. (Each state sets its own nexus thresholds. For example, in many states, a company establishes nexus after $100,000 in sales or 200 transactions.)
If nexus is not tracked and calculated correctly, a company could establish nexus and not know it. If the company then keeps doing business and selling products in that state without registering, it will fall out of compliance with the state's tax regulations.
The state could discover this via an audit, and it could require the company to pay back taxes and significant penalties. Because of the consultant's errors, DRMTLGY was at risk of this occurring.
Amazon is a marketplace seller, but Amazon sales matter in determining nexus
Amazon is considered to be a marketplace facilitator, meaning that it operates or controls a market where third parties can sell items. It’s defined as such because it plays a pivotal role in sales, collecting payments for on-site purchases from third parties and featuring items in responses to searches.
Marketplace facilitators also collect sales tax for sellers, so DRMTLGY wasn’t responsible for this when it came to Amazon sales. However, states do typically count Amazon sales when determining whether a company has met the threshold for establishing nexus.
Because DRMTLGY could have unknowingly reached nexus in many states, the consultant's failure to correctly include Amazon revenue left DRMTLGY at high risk of noncompliance, which can lead to costly fines and reputational damage.
DRMTLGY's diverse product and distribution lines necessitated a comprehensive approach
DRMTLGY's diverse distribution channels, including Amazon and Shopify (which is not a marketplace facilitator), were one reason the company needed a more advanced sales tax solution than the consultant could provide.
DRMTLGY also sells a diverse array of products, some of which are exempt from sales tax in specific states. For example, DRMTLGY sells sunscreen, and certain types of sunscreen are exempt from sales tax in some states, such as Florida.
The company must be sure to avoid collecting sales tax on all exempt, or nontaxable, items, while collecting the required tax due on the rest of its sales in every state where it has nexus.
Turning to Numeral for help
DRMTLGY was referred to Numeral through a friend of the company's CEO, a common occurrence as Numeral's reach grows and clients experience Numeral's effortless approach to sales tax compliance.
After DRMTLGY reached out, Numeral was able to step in quickly to help, which was crucial given the company's vulnerability to audits due to the consultant's errors, and given the time-sensitive nature of sales tax filing requirements. Numeral immediately began ensuring that nexus tracking would be done correctly, so DRMTLGY could stay on top of its tax obligations.
"The Numeral teams have been extremely supportive and responsive," Bocabeille said. "We made the switch very late in the month, and we will be able to file for our first month without having to incur any delays or penalties. This is the fastest onboarding I have ever gone through."
Bocabeille explained that the process was not only very quick but also smooth — and that she was immediately impressed with Numeral once she'd come on board. "The platform is very intuitive and easy to use," she said.
Unfortunately, her old provider threw yet another wrench in the process: "What took the most time was to get the credentials from the former provider and update the passwords and emails," said Bocabeille.
Numeral's impact
Once DRMTLGY was onboarded, Numeral was able to take over nexus tracking, filing, and remitting sales tax, and more. Numeral offers white-glove service at an affordable price, and it’s able to ensure that DRMTLGY is in full compliance with all relevant tax requirements where it has customers.
Numeral's goal is to allow companies like DRMTLGY to manage their sales tax compliance in five minutes or less each month, while enjoying transparent and accurate support that instills complete trust.
Bocabeille explained that what she was looking for when making the switch was a "better provider without doubling the cost," as well as a company that offered the transparency and honesty that the consultant lacked. The "impressive" platform and processing, coupled with reasonable pricing, pushed the company to choose Numeral — but she found that Numeral did much more than simply meet her basic expectations.
"I have been doing this for a long time, and I have never seen a platform with such capabilities," Bocabeille said. She summed up her experience with Numeral as "outstanding."
With Numeral's fully-automated technology, 24/7 monitoring and alerts, exemption certificate management, and many other features, it's no surprise that Bocabeille appreciates Numeral's comprehensive offerings — especially after the company's past experience with consultants not fully equipped to handle their needs.
Now, with Numeral’s full support, accurate nexus tracking, and tax engine that integrates with their Shopify platform and their other tools and billing systems, DRMTLGY can focus on doing what it does best — making medical-grade skincare available to anyone and everyone, without worrying about sales tax issues.
As Numeral moves forward with allowing DRMTLGY to spend mere minutes on sales tax compliance each month — with complete confidence that compliance is being done right — Bocabeille has a piece of advice to companies thinking about migrating to Numeral: "Don’t hesitate."
