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.
If you told an Amazon seller back in 2012 that ecommerce sales will reach the one-trillion-dollar mark in ten years, they would probably laugh at you. Before the pandemic, it was unthinkable that ecommerce transactions would skyrocket to unbelievable levels. Despite how easy it is to order any product you can think of online, people still prefer to walk around the mall and shop.
Now that we are years into the so-called "New Normal," ecommerce platforms such as Amazon have taken a greater role in the economy and our lifestyles. Initially, it snowballed to unprecedented levels due to the health restrictions imposed on brick-and-mortar shops, which made business as usual nearly impossible.
Thus, entrepreneurs had to find creative ways to move their products. As soon as they closed down their physical stores, small business owners opened up virtual stores on Amazon. The rest, as they say, is history.
If you wish to survive the extremely competitive world of ecommerce in 2023, you should consider bookkeeping services for Amazon sellers. In this article, let us convince you why hiring bookkeepers is not only a mere luxury for those who can afford them but an essential and indispensable key to ecommerce success.
Why the Future Is Bright for Amazon FBA Sellers
There will always be skeptics, and it isn't a bad thing. So before you jump on the bandwagon, you have to ensure that it isn't just a fad that will be gone within a year. When it comes to investing your money to buy initial inventory and hire employees, assurance of long-term growth becomes especially important. Is Amazon selling here to stay? Find out!
Amazon Surpasses Traditional Retailers
Big-box stores like Walmart and Target always come to mind when shopping. Whether you are shopping for grocery items, furniture, or appliances, the go-to place for almost everything you need is a big-box store. As a result, physical retailers enjoy a steady supply of customers keeping their aisles busy and parking lots full.
However, in 2020, the Gross Merchandise Value (GMV) of Amazon exceeded that of Walmart. Amazon achieved a 41% GMV growth, while Walmart grew by 10%. These numbers translate to the volume of sales made within a year. As you may surmise, Amazon continues picking up momentum, and today might be a good time to jump in.
Amazon Continues to Enjoy Market Supremacy
When asked about ecommerce, which company comes to mind? If Amazon isn't the first thing you thought about, you might be living in a cave! Truly, Amazon has taken over the ecommerce market. Moreover, projections for Amazon promise a favorable outlook for the company and ecommerce in general. For instance, analysts predicted that Amazon would take 50% of the ecommerce market share.
How does this translate for Amazon sellers like you? So if you want to increase your products’ visibility, be smart and put them up on display on Amazon. The more people go to Amazon, the higher the chances of translating traffic into actual sales.
Mobile E-commerce Steadily Gains Ground
Are you reading this article on a mobile device like a smartphone, perhaps? There's a high chance that you are! Indeed, smartphones have become inseparable from us. We have been doing most of our daily activities with the help of our smartphones. For instance, you can have a meal delivered right to your home’s doorstep through a mobile app.
Taking advantage of this shift to mobile use, ecommerce platforms like Amazon optimize their websites and apps to work seamlessly with mobile devices. As a result, mobile commerce has been projected to enjoy a 21-percent growth jump in 2021. You can gain from this projected growth by having your products accessible on mobile devices through the Amazon app.
Social Commerce Generates Interest and Traffic
Have you ever found yourself scrolling endlessly on your newsfeed? Who hasn't? Consuming all sorts of content on social media platforms is addicting. Entrepreneurs took advantage of this precious real estate by purchasing ad spaces and building a marketing strategy tailored for social commerce.
With a well-managed and engaging social media page, you can convert traffic on your page to sales on your Amazon store. You can even tap influencers and micro-influencers to generate interest in your products. As long as social media remains popular, you can always use it to promote your products and increase your brand's visibility on the Amazon marketplace.
What Can Amazon Accounting Services for Amazon Sellers Do for Your Small Business?
Thanks to your hard work and a touch of luck, you’ve managed to grow your business, receiving thousands of orders each day. But, can you keep up?
Scaling up your business means adding new members to what used to be a one-person team. Unless you have eight tentacles, you cannot manage your inventory, pack the parcels, ship them out, keep your books in check, and handle customer service via your Amazon account all at the same time.
That's why you have to hire bookkeeping services to keep your finances in order and steer clear of any financial trouble. In fact, hiring professional bookkeepers is as easy as booking a call here!
Read more to get yourself acquainted with what bookkeepers can do for you and your growing business!
Track Your Cash Inflows and Outflows
How much do Amazon sellers make? To answer that question, you need to have a system in place that keeps track of the number of goods sold and how much money is going in and leaving your business. New business owners can get away with collecting receipts and encoding them manually on their self-made spreadsheets. However, manual entry will be time-consuming and prone to costly errors when you need to scale up your operations.
So if you want to keep an eye on your cash inflow and outflow, better hire an Amazon accountant or bookkeeping services to do all the work for you. No matter how busy it gets during your day-to-day business operations, you can always rely on your bookkeeper to take into account every single penny that goes in and out of your business.
Keep Your Taxes in Order
We know how easy it is to lose receipts and skip accounting for your daily income and expenses. While you don't have to worry about the police knocking on your door because of lost receipts and unaccounted money, you still have to do your due diligence concerning money matters. When tax season comes, your negligence might result in penalties from government auditors.
If your schedule has become too tight, leaving you with absolutely no time to spare for tax accounting, you should consider hiring a team of professional bookkeepers to settle and minimize your taxes for you. While you still have to file your taxes yourself, bookkeepers prepare everything to account for every cent you owe the government.
See the Bigger Picture
Are you a hands-on business owner? Nothing beats being in the trenches of your growing business and attending to every transaction yourself. However, being too involved on the ground may prevent you from seeing the bigger picture. Sometimes, you may need to zoom out to check how your small business is doing.
Professional bookkeepers employ the best bookkeeping software for Amazon sellers to generate summary reports about your business' performance. For example, is your business making money? Which quarter saw growth in Amazon sales? You can answer all these questions and more by glancing at your summary report.
Use Data for Projections
Aside from knowing how much money you are making every day, you should also set targets for the future growth of your business. Of course, you have to meet deadlines as you set to achieve your targets. However, crafting a timetable should be based on past performance and cash flow for it to be realistic and achievable.
Thanks to an experienced and professional bookkeeper who specializes in ecommerce accounting, you can skip the complicated math and request a projections report instantly. You can rely on these projections based on the data gathered from your business's past performance. Some accounting software even takes additional data from current trends observed in the market.
Final Thoughts
Despite the challenges brought about by the pandemic, the year 2023 could be the best time to become an Amazon FBA seller. Your budding Amazon business will benefit from the current trends in ecommerce, such as social commerce and mobile commerce. However, you will need some help in such a risky yet rewarding endeavor.
Amazon bookkeeping and ecommerce accounting can be difficult without the help of professional accounting services. So don't let your Amazon business get caught in the tangle of accounting and sales tax liability web! Instead, ditch your clunky Google Sheet spreadsheets and hire a reliable Amazon seller bookkeeping service today!
Explore the website and check out our bookkeeping services for budding entrepreneurs like you!