If you're in the e-commerce business or want to get into it, you have no shortage of options in front of you. Two of the biggest businesses in the world, eBay and Amazon, allow people to set up accounts to start selling.
Any given day, there are 1.6 billion active listings on eBay. Amazon is also one of the biggest companies on the planet, because people buy just about everything on the platform, and they love the speedy shipping.
There are some accounting differences you need to understand if you're going to sell on these platforms. These tips are helpful when you want to learn about how eBay and Amazon bookkeeping are different.
The Platforms Are Different
First, make sure that you fully understand the differences between the Amazon and eBay platforms. It's easier to handle eBay or Amazon bookkeeping when you know how the platforms work.
For one, the business model is different. eBay is an open auction platform that lets people bid on items that you post. You can also tweak the settings to allow people to purchase the item now without waiting for the auction if they pay a certain price.
Amazon is completely different, as it is a marketplace that allows different merchants to set their own prices. There's a default buy box that is the coveted spot for every listing.
Since the business models differ, make sure you're prepared for the differences in how your sales are tracked, so that you can maintain impeccable records, which will help you with your accounting.
Amazon Has Different Seller Strategies
Your accounting process will differ depending on the type of sales that make up your business. While eBay generally involves you shipping all of your own items, Amazon has a few different seller strategies.
The site has two main models – Amazon Marketplace and Fulfillment by Amazon (FBA). With Amazon Marketplace, you are posting your listings and are responsible for communicating with the buyer, packing your items, and shipping them to your consumers. The FBA program allows you to ship your items to a variety of Amazon warehouses all over the country. They will be stored there, and you'll be charged some storage fees if they sit too long.
When a buyer makes a purchase, Amazon uses its business infrastructure to pack, ship, and send your item, in addition to communicating with the customer. You get paid your cut of your sales, minus Amazon fees for storing the merchandise and fulfilling your order.
These sorts of differences can play a role in how your accounting will also vary. Amazon is responsible for close to 40% of all e-commerce sales, so there is plenty of room for opportunity if this is the business model that you decide to move forward with.
Explore Amazon and eBay Fees
To figure out how to handle your accounting, make sure that you understand the various fees that Amazon and eBay charge. Amazon charges seller fees either per month or per item. The professional plan is per month, while the individual plan charges per item.
eBay charges a variety of listing fees that vary depending on the category and the type of item that you're selling. The fees with both of these platforms change over time, so you'll need to stay up-to-date with them. Understand how to deduct business expenses on these platforms so that you keep your books in order.
Payment Information Between Both Companies
Since you're considering selling on eBay and Amazon, make sure that you get to know the ways that you get paid. The frequency, platform, and currency exchanges make a difference when you're factoring in Amazon and ebay seller accounting.
It's a bit easier to get up and running with this on eBay. You'll log in and make changes to your profile by adding PayPal, checking, or savings account information. Once you post your information, you can start selling right away. Amazon also uses routing and account number information, but requires you to fill out your tax information and wait for a verification period.
eBay pays you as soon as you make a sale, and your money should post to your bank account within 24 to 48 hours. On Amazon, you will get paid once a month as long as your sales for the month meet a certain minimum.
These differences are also important when it comes to managing your e-commerce accounting.
Get to Know the Dashboards
You need to understand how to navigate your e-commerce dashboards if you're going to take the best care of your accounting. You'll be able to see how much money you've gotten paid year-to-date, along with which items are selling and which aren't. You'll be able to explore seller taxes and store fees, in addition to your 1099-K and other tax forms.
Many people choose to use third-party accounting and store management dashboards rather than the native platform so that they can get access to timely information and the best reports.
Understanding eBay vs. Amazon Bookkeeping
If you understand the differences between eBay and Amazon bookkeeping, you'll be able to navigate them in a way that makes sense. The information above will assist you when you're trying to get the best out of your e-commerce needs. Start here and look into the resources that'll help you most.
Link My Books can help you when you need to manage your e-commerce accounting needs. If you're ready to get started, send us a message for more information.