A lot of traditional businesses aspire to tap the power of ecommerce. Most of them are established businesses that have been selling well offline. But just like everyone else, they're trying to cover some ground they lost during the pandemic.
To most traditional businesses, ecommerce is a new world. They think the barriers to entry are tall and thick, especially regarding technology. Fortunately, Unloop knows how to overcome these barriers and shorten a small business's transition time.
Read on and find out what you'll need to bring your physical business online as efficiently as possible.
Fulfillment by Amazon (FBA) is a service that both incoming and existing business owners can take advantage of.
All sellers in the Amazon marketplace are responsible for their order fulfillment. But if they want to save some time, they can take advantage of Amazon's infrastructure to fulfill their orders.
When you outsource order fulfillment to Amazon, your products will be handled by them quickly. But before an order comes in from your Amazon Seller Central account (which we'll discuss in a bit), you'll have to do the following.
Ship Your Products to Amazon
After ordering your products from a supplier or manufacturing them yourself, you’ll have to pack and ship them. Amazon will provide the address where you can send your items for sale.
Your Products Get Stored at Amazon's Fulfillment Center
Your inbound shipment will land at one of Amazon's Fulfillment Centers, where it will be warehoused. Amazon's fulfillment personnel are always on standby for an order to come through.
Amazon Sends out Your Product to Your Customer
Once you get a sale, the fulfillment center will pack and ship your order to the buyer. Once the goods are out, Amazon will update you on the shipping status.
The main benefit of getting Amazon FBA is the outsourcing of order fulfillment. This can add value if you're a seller with a high-volume inventory but a low staff count. When you take advantage of Amazon's fulfillment services, you can leverage their efficient workforce.
Apart from that, you will get the following benefits too.
Warehouse Space
You don't have to source and lease a warehouse or hire personnel. Amazon can cover that for you. So whether you're selling a garage-load of items or just a handful, your products will have a space in Amazon's facilities.
Inbound Shipping Discounts
When you sign up for a professional FBA account, you are entitled to shipping discounts and freebies. You can have your items sent to Amazon's fulfillment center and pay less or nothing at all. This can greatly impact your profit, especially if you're shipping a large volume of products.
Access to Inventory Reports
Amazon's professional FBA account lets you get access to inventory files and feeds. This helps you manage your supply chain and ensure you're well-stocked for better marketplace responsiveness.
Customer Support
Any Amazon seller who takes care of their fulfillment must also handle customer support. They'll be in charge of updating their customers on where their parcel is, and for a seller handling many transactions, this can be a challenge.
Luckily, FBA also lets Amazon sellers tap into their customer support. They can also update your customers on the status of their orders.
Inventory Management will be a huge benefit for aspiring Amazon sellers, but it is also the main challenge. That's because the ecommerce marketplace platform has standards that merchants must comply with.
For one thing, Amazon can return your products if you don't follow their packaging guidelines. This can be an issue if you're running low on stock and are ordering from a supplier who will send it directly to Amazon.
It can also be difficult to transfer your inventory data to your books. That's because most of the reports come in spreadsheets. You'll have to do manual data entry if you don't have any automation features.
Sellers can enjoy the benefits of FBA and manage the challenges by integrating their Amazon business account into QuickBooks Online.
When a QuickBooks Amazon integration is implemented, your inventory data syncs from your Amazon account to your QuickBooks account. That means you get identical data on both Amazon and your accounting software's end. This is possible even if the data is coming from multiple sales channels.
Currently, QuickBooks Online cannot be synced directly to your Amazon account. But you can do this through a third-party technology or through an accounting and bookkeeping agency.
Warehousing and order fulfillment is necessary for any ecommerce seller. But to move products, you'll need a store. This is where Amazon Seller Central comes in. It provides a platform (and a system) where you can tap into millions of potential buyers in a virtual marketplace.
Signing up for an Amazon Seller Central account is like owning a virtual store. It's the seller's avenue for doing actual business. As such, the online small business powered by Seller Central will have these functions.
Create Listings
Amazon sellers will be able to create product listings on their Amazon accounts. They can upload product images and videos, design their brand page, and write product descriptions to optimize their listings. Finally, they can set their preferred selling and shipping amounts.
Inventory Management
Amazon Seller Central's product listings have Amazon’s inventory management system. In addition, merchants can organize their items through a stock keeping unit (SKU) system.
Advertising
Amazon has its own pay-per-click advertising scheme. You can create campaigns and advertise your listing within your Seller Central account.
Store Management
Lastly, your Amazon account has a user-friendly dashboard that you can easily learn to manage your business virtually. You can also generate reports within the Amazon platform if you need data for decision-making.
To set your expectations as an incoming seller, managing an Amazon store is a full-time task. If you include formal accounting in the mix, you'll have to work more hours to get those numbers sorted out.
Integrating QuickBooks for Amazon sellers helps you shave off a few tedious tasks because it syncs the following data to your accounting software.
Bank Transactions
Your bank account balance will be in-sync with QuickBooks's records which are affected by your day-to-day business operations. As a result, you'll have an easier time reconciling your business's bank account balance.
Inventory Data
Inventory replenishment, as well as completed sales, can all be synced to your QuickBooks account. This means you'll get an accurate inventory valuation which will positively affect your income statement (in the form of cost-of-goods-sold) and balance sheet (in the form of inventory account).
Revenue
A QuickBooks Amazon integration can sync product sales that are initiated on the marketplace. As a result, your sales volume and your revenue amount on Amazon will match the ones on your accounting software, and you can accurately generate financial reports (e.g. income statements) that will be useful for paying taxes.
If you're an incoming seller who wants a seamless entry into the world of ecommerce, hire accounting pros to be on your team.
The powerful combination of outsourced fulfillment from Amazon FBA, a robust accounting system from QuickBooks, and a team of ecommerce accounting professionals handling your accounting software will save you so much time which you can dedicate to managing your Seller Central account.
So if you're ready to hop on the ecommerce train and sell immediately, call us at 877-421-7270 for a consultation, or check out our ecommerce services now.
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.