How to Deliver Growth Opportunities for CPAs and Accounting Professionals With Marketplace Platforms

Marketplace, consignment, and eCommerce may seem like a timeless convenience—but the fact is that they began humbly in 1982, with the Boston Computer Exchange.

Marketplace and eCommerce sales did not become a paradigm-shifting beast until Amazon and eBay completed a million transactions in 1997.

Amazon continued to propel the sales platforms with Cyber Monday and various marketing strategies—online shopping currently stands at more than 4.5 billion annually, with 96% of Americans making regular purchases.

Why should accounting professionals care about ecommerce, Amazon eBay, and Etsy?

As of the end of 2023, there were 13 million eCommerce sites, nearly 10 million online retailers— and 2.8 million were small businesses in the U.S.

Since 2020, sales for these sites have broken records and exceeded goals. The largest and best-known is Amazon, but there are other marketplace platforms, like eBay, Rakuten, Etsy, Flipkart, and Argos, that also deliver a wide range of goods.

Understanding how marketplace and consignment platforms operate and optimizing financial strategies opens a new and exceptionally profitable opportunity for accounting professionals to expand their market reach with new customers, particularly small to mid-sized businesses. Having comprehensive knowledge of such things is crucial for CPAs and accounting professionals when advising clients.

The marketplace seller base is diverse. Consignment sellers provide consumers with a wide array of products and services—in fact, you probably have current customers in the distribution and marketplace arena.

Keys to marketplace success

Distributors who sell on marketplace and consignment platforms may not understand the complexities of managing their finances, optimizing their profits, and complying with regulations—tasks that CPAs and accounting professionals execute daily.

Developing the skills and insights to guide a distributor through the process and helping develop financial strategies and operational efficiencies that maximize their success can help achieve your—and your customers’—revenue goals.

• Budgeting and forecasting: sales, expenses, capital expenditures
• Profitability analysis: identifying areas to increase high-margin products and reduce costs
• Financial reporting: income statements, balance sheets, cashflow

Analysis and optimization of online platform sales is crucial—as is inventory management.

There are tips and tricks to online selling and many platforms have hidden fees—marketplace selling is competitive. To determine their profit margin, sellers must monitor the true cost of goods, inventory, days on the shelf, and potential storage fees.

It is crucial to get set up for success with a comprehensive business solution that automates and manages distribution, multi-warehouse, wholesale, and eCommerce.

• Informed decision-making: accurate financial data
• Improved stability: data-based financial and growth planning
• Transparency: enhanced ability to understand what works—and what does not

Compliance and planning can be arduous for business owners who sell on these platforms. The complexities of sales tax collection, reporting, remittance, and obligations in various states, counties, and jurisdictions can present a challenge for business owners—but not for CPAs and accounting professionals.

Informed, expert accountants and advisors can help business owners navigate their obligations, maximize savings via planning, and reduce their risk of penalties and fines due to non-compliance.

In addition to transparency and taxes, the importance of proper inventory control cannot be overstated—success hinges on effective inventory to maintain profits.

Automating consignment inventory with a cloud-based, precisely designed consignment module that delivers real-time visibility is crucial to optimizing profits and controlling expenses.

• Inventory costing: weighted average, FIFO, true cost of goods sold
• Inventory turnover: optimize stock levels, reduce storage and holding costs, avoid stockouts
• Inventory control system: real-time tracking and reporting

The benefits of accounting professional analysis aimed at optimal inventory management for businesses that utilize marketplace and consignment platforms include:

• Financial reporting: on-demand, accurate financial, P&L, balance sheets, cashflow
• Compliance: revenue tracking, product returns, rebates, taxes, internal and external audits
• Cashflow and projections: transparency in liquidity, operations efficiency, anticipating expenses and managing working capital, managing collections and supplier relationships

Technology and systems solution

For many accounting professionals, the missing piece is comprehensive software that includes dedicated marketplace/consignment functionality while seamlessly integrating with a robust accounting module.

CPAs, bookkeepers, and business owners need real-time, synchronized data—and no one has time for manual tasks and errors. Software designed for consignment and marketplace businesses improves efficiency and accuracy by automating expense tracking and reporting and allows for seamless scaling with integrated systems.

Substantial opportunities for growth exist within the evolving landscape of distribution and marketplace sales. By leveraging current skills and adding the best technology tools, accounting professionals can help marketplace sellers navigate the complexities of managing their finances, compliance, inventory, and distribution.

When accounting professionals and marketplace sellers integrate strategies, systems, and tools, sustainable growth and profitability follow.