“The thing I would remind sellers is, you might be able to find a clever hack here or trick there that will get you some short term sales. But at the end of the day, successful businesses are won because they do the fundamentals correctly.” Tyler Jefcoat
Amazon accounting is complex and many entrepreneurs don’t like it. However, your success on Amazon is heavily dependent on getting the fundamentals right. Accounting is a critical part of the business that you must get right.
We get into the deep end of accounting and talk about how brands should deal with the sales tax and marketplace facilitator tax levied by different states. We talk about Amazon’s payment methods and how this affects your cash cycle as a company. Having a good understanding of these gives you control over your business.
Amazon accounting is necessary for anyone running an eCommerce business. Firstly, it makes you compliant and ensures you pay your taxes correctly. Secondly, it gives you control over your money and tracking every dollar that gets in and out of your business. This ultimately helps you track your profitability which is a critical metric in business.
Additionally, Amazon accounting will help you acquire more capital or credit to expand your business. Potential investors and creditors are able to gauge the health of your business through the financials. Amazon accounting becomes even more crucial in scenarios such as mergers, acquisitions, and partnerships.
Listen in as we talk about all things Amazon accounting and some good accounting systems and tools to help you with it.
- What makes Amazon accounting so complicated (05:13)
- Understanding the sales tax and marketplace facilitator tax laws in the context of Amazon (08:14)
- Amazon payment methods and how this affects a company’s cash cycle (12:19)
- Why is Amazon accounting necessary and important? (14:33)
- Why Amazon accounting is crucial in case of mergers, acquisitions, and partnerships (24:24)
- Why profitability is the only metric you should be concerned about in business (29:32)
- Investing your profits in research, innovation, product development, and multiple channels (33:29)
- Common accounting mistakes brands owners should avoid in the eCommerce space (43:03)
- Having a good accounting system and tools to help you track profitability for each of your products (47:24)