Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
Are you just beginning to explore your earning potential on Amazon? The online marketplace is competitive and crowded. It's not easy to climb your way through to the top, especially when you have big brands to compete with. As a new seller, you may encounter certain issues as you navigate your business. But don't let these obstacles pull you down. There are services for small businesses that you can take advantage of.
In this article, we'll dissect some of the common issues new sellers face and give you solutions to overcome them with the help of Amazon seller accounting services. So take note of these tips and pave your business's way to success.
Many sellers think that once they sell an item, it will instantly reflect in their cash flow. Unfortunately, one of the challenges you will face as an Amazon seller is delayed profits. Amazon releases the incomes of third-party sellers every two weeks. So, if you depend on your resources from your earnings to restock your store, sooner or later, your inventory will run out.
You have to be ready for the surge of orders, or else you will miss the opportunity of big income potential. Therefore, it is wise to invest in your inventory and have a secure fund if you need to restock your items, especially if you are selling labeled ones. You can take advantage of Amazon FBA seller accounting services to help you keep track of your inventory and expenses for easy management.
It's astonishing that most sellers think that Amazon automatically fulfills tax collection for the items they sell. Amazon can help you with your taxes, but you have to set it up once you start selling. For example, different states have different sales tax percentages. You have set which state your sales taxes are to be collected in your Amazon Seller Central account, and Amazon will take care of the collection. Note that this service isn’t free.
But you can also collect sales tax on your own. In the end, as a seller, it's your responsibility to file taxes. Instead of Amazon, you can hire a third-party accounting service that will help collect and pay the appropriate sales tax. They will input your data into their accounting software, and from there, you can accurately track your sales and determine the proper tax collection for your products.
If you start at Amazon, you might be shocked that many sellers like you offer the same items for sale. One mistake of new sellers in the marketplace is lowering the prices of their goods too much, thinking it will attract customers. Part of the services of accounting experts is helping you with the proper pricing without compromising your income. Amazon trends are fast-changing, and item prices vary depending on the demand of the people.
Accounting experts can help you strategize your sales, by offering seasonal products. For example, summer is nearing. Selling items that people demand during the season changes and boosts your income. You can plan and strategize this with experts, and they can even give you a forecast of your potential income.
If you can keep up with the online marketplace changes, you'll always be one step ahead of your competitors.
There will be days when your items are fast selling, and you'll often be stocking up your inventory. But there are also days when your hot item seems to go unnoticed. It's normal to experience sales that peak and drop at certain times because Amazon marketplace trends all the time. So one day, this bag style is in demand, and on other days, people look for a different one.
That's why it's important to know when these changes will happen. Overstocking an item, especially those perishable ones, can make your business lose money. If you can't catch up with the fast changes of the online marketplace, accountant experts can help you with that.
From the data for your inventory, sales, and other transactions, they can forecast and help strategize to sell your items. Furthermore, these experts are always up to date with the changes in the online world. May it be laws or seasonal trends, you'll surely always be one step ahead of your competitors with their support in your business.
Most sellers don't have the necessary skills for inventory management, which makes selling difficult. Of course, if you want to generate income, having multiple listings is a must. But it doesn't mean that you need to buy maximum capacity stocks for all your items. As mentioned earlier, Amazon trends change very often, so item demands may vary. Trends will tell you what items you should stock on; you just need to understand them.
In addition, keeping track of your inventory is also a must. Restocking your items in bulk is much more effective than restocking separately. It's also important to keep track of your inventory expenses. Investing too much in items, especially those not in demand, can cause negative profits.
Amazon bookkeeping services will help you manage your inventory and expenses. You will have a clear and organized view of all your transactions, and you can use this to plan and project your next move in the month forward. Furthermore, experts are ready to assist you to manage your inventory more efficiently. And, they have software that directly connects to Amazon Seller Central accounting profile, so you access and record data in real-time.
As a new seller on Amazon, you might be shocked and easily discouraged by the restrictions, especially when you’re just starting out. Many sellers who start on Amazon don't know that your initial seller account doesn't let you list multiple items at once. You have to choose wisely on what items to list or upgrade your Amazon account to a pro account so you can list up to 40 items at once. You can check the Amazon guidelines on how to upgrade your account properly.
Furthermore, Amazon has strict rules on counterfeits, so you are not free to sell any item in all categories. For items and brands with this rule, you have to buy an entire inventory and document it for approval before you sell it. If you're unfortunate and don't get approved, you'll end up in an inventory you can't sell. So think before you invest, or better yet, consult with experts before reaching a final decision.
Unloop is the first and only accounting firm exclusively servicing ecommerce and inventory businesses in the US and Canada. With the power of people and technology, our team dives deep into COGS and inventory accounting. You are paired with a dedicated bookkeeping team that prepares accurate financial statements, financial forecasts, and can also pay bills or run payroll for you. Come tax time, everything is organized and ready to go, so you don't need to worry. Book a call with an ecommerce accountant today to learn more.