Selling on Amazon is a great way to build your online business, and if you’re just starting out you might be looking for financial tips for Amazon sellers. Building your Amazon business on a solid financial base will ensure that you don’t run into trouble with the ATO further down the track.
That’s why we’ve put together these financial tips for Amazon Sellers. Follow them to save yourself some money and future headaches at tax time.
Invest in a good accountant
If your business is still new, you may be hesitant to invest in professional accounting services right away. But honestly, this is one of the best financial tips for Amazon Sellers. A good accountant can help you structure your business properly from day one, and help you save money when it comes time to do your taxes.
Doing your own accounting can take a lot of time too, especially if you don’t know what you need to be recording. Investing in an accountant that specialise in ecommerce businesses (like the team at Infinity 22) can help to free up your time so that you can focus on building your business. Plus accounting services are a tax write off too!
Take Amazon selling fees into account
Another financial tip for Amazon Sellers is to make sure that you take seller fees into account when calculating your profit and loss. If you run an Amazon FBA business (Fulfilled by Amazon) you will be charged fees for every sale you make. Amazon FBA fees are what Amazon charges each seller for their fulfillment and storage services. Fees are determined by the size and weight of your products and are deducted from your earnings.
From a financial perspective, it’s important to record your gross sales (sales minus merchant fee and other expenses) and separately record your merchant fees as part of your operating expenses.
Be sure to record all your expenses
Just like any other online business, Amazon Sellers can also claim deductions for business expenses. So another financial tip for Amazon Sellers is to make sure you keep your receipts!
Here are some examples of potential deductible expenses:
- Amazon Fees
- Inventory and stock
- Home office expenses
- Marketing and branding fees
- Sponsored ads on social media
- Accounting fees
Account for refunds
Nobody likes a refund request but occasionally you are bound to get some. These refunds might occur because of returned or damaged goods, or when a buyer decides to cancel an order before it is dispatched.
Therefore another financial tip for Amazon Sellers is to record your sales as soon as you fulfill a customer order, regardless of whether a refund request comes through later. Record any refunds or returns separately. This will make reconciliation of your Amazon profit and loss sheet easier, as refunds will ultimately decrease your gross revenue.
Talk to the team at Infinity22
We specialise in ecommerce accounting for businesses of all sizes. Whether you’re new to selling on Amazon, or an FBA veteran, we’ll be able to provide you with the right advice to ensure your business runs smoothly and is in good financial health.
Talk to our team today by calling (61) 452 184 241 to find out more about how we can help with your Amazon business financials.