E-commerce

Your Amazon deposit is not your revenue. We break down marketplace fees, track inventory properly, and show you which products actually make money.

The Industry

An Amazon seller sees an $8,400 deposit hit their bank account and records it as revenue. But the actual sales behind that deposit were $12,300. The difference is referral fees, FBA fulfillment charges, storage fees, advertising deductions, and customer refunds that Amazon netted out before transferring the funds. Recording $8,400 as revenue means the books understate actual sales and completely hide thousands of dollars in fees. There is no way to evaluate whether your Amazon advertising is worth the money if the ad cost never shows up as a line item in your books.

E-commerce also locks up cash in inventory long before you see a return. You wire $20,000 to a supplier overseas, wait six weeks for production and freight, send it into FBA or your warehouse, and start selling. That cash is tied up for months. Meanwhile you need to reorder before the first batch runs out or you lose ranking and momentum. Profitability and cash flow operate on completely different timelines, and confusing the two is how sellers end up profitable on paper but unable to pay their bills.

Who This Covers

Amazon FBA and FBM sellers, Shopify store owners, direct-to-consumer brands, dropshippers, Etsy sellers, and Walmart marketplace sellers. Any business selling physical products online through one or more channels in the Nashville area and beyond.

What Makes It Complex

Marketplace settlement reports that bury dozens of fee types into a single deposit. Inventory purchased months before sale. Sales tax obligations across multiple states with different rules and thresholds. Returns and refunds that affect both revenue and cost of goods sold. Multi-channel selling where each platform has its own fee structure and payment schedule. Advertising costs spread across Amazon PPC, Meta, and Google with different attribution models.

What We Handle

We reconcile marketplace settlement reports and break them apart into the components that matter. Gross revenue, referral fees, fulfillment fees, storage charges, advertising costs, refunds, and reimbursements all get recorded separately. Your books reflect the full picture of what happened, not just the deposit amount. This means you can actually see how much you are paying Amazon or Shopify each month and whether those costs are trending in the right direction. QuickBooks gets configured to mirror how your business actually operates across channels.

Inventory gets tracked as an asset on your balance sheet, not expensed when you pay for it. Cost of goods sold is recognized when products actually sell. This gives you accurate profit margins and prevents the tax problem where you expense $40,000 in inventory purchases in the fourth quarter but don’t sell most of it until the following year. Landed cost per unit is calculated to include product cost, inbound freight, duties, and prep fees so you know your true margin before you set a price or accept an advertising cost.

Marketplace Reconciliation

Every settlement report gets broken down into gross sales, fees by type, refunds, reimbursements, and net payout. Each component is categorized properly so your income statement reflects actual revenue and actual costs. If you sell across Amazon, Shopify, and Etsy, each channel is tracked separately so you can compare performance and fee burden across platforms.

Inventory and Cost of Goods Sold

Landed cost calculated per unit including product cost, shipping, customs duties, and prep fees. Inventory tracked as an asset that converts to expense when sold. You know your true margin per product rather than a rough guess. This also keeps your tax return accurate because the IRS expects businesses with inventory to account for it properly.

Common Problems

The most widespread issue is recording marketplace deposits as a single revenue line. It feels natural because that is what hits the bank account. But that approach hides the real cost of selling on Amazon or any other platform. You cannot make informed decisions about advertising spend if the ad costs are netted out before they appear in your financials. You cannot evaluate whether FBA is worth the premium over self-fulfillment if you never see the FBA fees isolated. Every financial metric downstream of that recording error is distorted.

Inventory accounting creates another layer of problems. Sellers who expense product purchases when they pay for them see wild swings in profitability from quarter to quarter. A big inventory order in October makes Q4 look like a loss even though the products will generate revenue over the next six months. Come tax time, a CPA has to untangle what was actually sold versus what is sitting in a warehouse. If that work hasn’t been done all year, it turns into an expensive cleanup project during the busiest season for tax preparers.

No Product-Level Profitability

You know total revenue and total expenses for the month but cannot tell which SKUs make money. That product generating $50,000 in annual sales might carry $12,000 in marketplace fees, $9,000 in advertising, and $26,000 in landed product costs. The apparent profit vanishes once you add storage fees and return rates. Without SKU-level tracking, you keep reordering products that lose money and underfunding the winners.

Sales Tax Exposure

Selling into dozens of states creates potential sales tax obligations in many of them. Amazon and other marketplaces collect and remit in most states as marketplace facilitators, but not every scenario is covered. Your own Shopify store likely requires you to collect and remit directly in states where you have nexus. Ignoring this creates a growing liability that compounds with penalties and interest until a state sends a letter you cannot ignore.

What Changes

You see real margins by product and by channel. That clarity changes how you buy inventory, where you spend advertising dollars, and which products you retire. You stop reordering slow-moving SKUs that eat storage fees for months. You double down on the products with genuine margin after every fee and cost is accounted for. Reorder quantities and timing are based on sell-through data and cash flow forecasts instead of gut feeling.

Tax time becomes straightforward. Inventory is properly valued on the balance sheet. Cost of goods sold matches actual units sold. Deductions for home office, software subscriptions, shipping supplies, product samples, and travel to trade shows are captured throughout the year. Sales tax filings are current. Your financial statements are accurate enough to support real decisions about launching new products, expanding to a new marketplace, or applying for a line of credit to fund your next inventory purchase.

Smarter Purchasing and Growth

Reorder decisions built on actual margin data, not top-line revenue. New product launches evaluated against real cost structures including all fees and expected advertising spend. Cash flow forecasts that account for inventory lead times and seasonal demand so you are not caught short during your peak months. Growth funded by numbers, not optimism.

Clean Books and Lower Tax Bills

Tax returns prepared with proper inventory valuation and cost of goods sold. Every eligible deduction captured throughout the year rather than scrambled for in March. Quarterly estimates calculated so April does not turn into a crisis. Financial statements clean enough for a lender to accept if you need a credit line to fund inventory or a loan to invest in your next phase of growth.

Greater Nashville's Trusted Financial Partner

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