Global ecommerce sales reached over $4 trillion US dollars last year, a number only expected to grow exponentially.
When it comes to accounting, there are countless areas that sellers need help with from specialist accountants.
From prioritizing their automation stack to understanding their statements, fees, income, expenses and taxes through to organizing their books via the accrual method for optimal results, it’s hard to know where to start - and whether there are differences between platforms.
In this article, we will be looking at types of seller by platform, the unique ways they do business and their specific challenges when it comes to accounting.
We will focus on:
- Amazon
- eBay
- Shopify
- Etsy
- Walmart
- How A2X can help
For a deeper dive into this topic, make sure to register for our webinar on on May 26, "How Does Accounting Differ On Today's Ecommerce Platforms?" Register here.
Amazon
Amazon started life in the mid-1990s as an online bookstore, around the same time as eBay.
Dominating the ecommerce landscape with a US market share of over 45%, Amazon lists 12 million items itself on top of the 350 million seller listings. As the most popular and visited ecommerce property in the US, there are plenty of buyers looking for those products.
Plus, with access to Amazon FBA and those super-fast delivery options all automated, Amazon is attracting more than a million new sellers every year.
What does this mean for you? A wealth of potential new clients looking for help with their bookkeeping.
Who sells on Amazon?
The types of sellers you’ll typically find on Amazon.com (in order from most to least):
Third-party, private labellers (over half)
- Wholesalers
- Retail arbitrage
- Online arbitrage
- Dropshippers
- Handmade
3 key Amazon accounting challenges for sellers
At A2X, we have found that some of the main challenges and common mistakes for Amazon sellers when it comes to their bookkeeping are around:
- Understanding FBA seller fees.
- How to reconcile their Amazon seller statements correctly.
- Understanding their tax obligations.
eBay
Not just an auction site any longer, eBay does more business via Buy It Now listings today, attracting a broader range of sellers and buyers.
eBay comes third in US retail ecommerce sales, and third in monthly US visitors behind Amazon and Walmart.
There were almost 200 million eBay users across the globe in 2019, opened up for sellers by its unique Global Shipping Program for easy international fulfilment. With this expansion comes new challenges in eBay accounting.
Who sells on eBay?
It’s not just second-hand and vintage sellers on eBay anymore. You’ll find a real mix on the platform due to its expansion in technology to support new selling styles.
3 key eBay accounting challenges for sellers
Based on the types of eBay seller and eBay’s fulfilment services, some of their key challenges are:
- Understanding their tax obligations.
- Managing varying profit margins.
- Reconciling eBay Managed Payments payouts.
Shopify
Shopify boomed during the COVID-19 pandemic.
With around 1.5 million live sites globally, Shopify’s key competitors are the likes of WooCommerce and Squarespace rather than Amazon or eBay.
As a platform as opposed to a market facilitator, Shopify offers greater customization, integration options and focuses on giving its sellers access to some of the latest tech in shopping experience. In this way, rather than optimizing for sellers, it gives sellers the tools to choose what works for their brand.
Who sells on Shopify?
Shopify sellers typically have their own brands and product lines, or dropship orders. They choose the platform for greater control at the expense of existing floods of customers.
3 key Shopify accounting challenges for sellers
Shopify sellers in particular may need extra support with:
- Managing their payment gateway integrations and reconciliations.
- Accounting for extra channel Shopify stores (like Facebook and Instagram, for example).
- Sellers need to drive traffic themselves so may invest in apps to do this, adding more costs to track in their accounts.
Etsy
The platform for makers, Etsy’s revenue increased over 100% from 2019-2020, sitting at around $1.7 billion by the end of last year.
Etsy hosts around 4.3 million active sellers and 39.4 million buyers worldwide. The place of all things handmade is not an amateur in the ecommerce game any longer. But it’s creative sellers may be, with regards to accounting.
Who sells on Etsy?
Crafters with their own stores. You won’t find too much variance in seller styles on Etsy, even those selling via its Shopify-esque version Etsy Pattern.
3 key Etsy accounting challenges for sellers
As their own suppliers, Etsy sellers deal with the usual ecommerce hurdles as well as the following:
- Automating their accounts so they have time back to keep creating.
- Keeping track of costs: materials, advertising, fees etc., to calculate profit margins.
- Understanding Etsy statements and financial reports.
Walmart
90% of Americans live within 10 miles of a Walmart store. With Walmart Marketplace, US sellers can leverage that unparalleled brand footprint for ecommerce.
It is estimated that there are around 80,000+ sellers on the platform (now not just in the US), and around 80 million+ listings.
Walmart.com grew 79% last year, offering established sellers a less competitive landscape, greater physical presence, less fees than Amazon and a fulfilment service to rival FBA: Walmart Fulfilment Services.
Who sells on Walmart Marketplace?
Sellers must be invited and have an established seller reputation. This attracts omnichannel sellers, with a unique set of accounting challenges.
3 key Walmart Marketplace accounting challenges for sellers
Walmart Marketplace sellers may seek help for:
- Multi-channel accounting integration and automation.
- Understanding their tax obligations.
- Inventory and fulfilment costs.
A2X for Ecommerce Accountants & Sellers Alike
A2X is an accounting integration that takes the fuss out of automating your clients ecommerce bookkeeping, no matter how many platforms they sell on. Find out more here.
If you want to find out more about how accounting differs across ecommerce platforms, and how to best serve these different types of clients, sign up for our webinar on the 26th May at 4pm EST time by clicking here.
A2X is an accounting integration that takes the fuss out of automating your clients ecommerce bookkeeping, no matter how many platforms they sell on. For a deeper dive into this topic, make sure to register for our webinar on on May 26, "How Does Accounting Differ On Today's Ecommerce Platforms?" Register here.