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Valuable eCommerce Channels: Amazon FBA 101 for Accountants

John Bottoms
Posted by John Bottoms on Apr 28, 2023 6:44:51 AM

As an accountant working with eCommerce clients, it's essential to understand Amazon Fulfilled by Amazon (FBA) and how it can benefit your clients' businesses. Amazon FBA allows sellers to store their inventory in Amazon's warehouses and have Amazon handle the entire fulfillment process, including packing, shipping, and customer service. With FBA, your clients can expand their reach and customer base, and also benefit from Amazon's reputation and trustworthiness without having to house their own inventory or deal with customer service issues. 

To help your clients start selling on Amazon through FBA, guide them in creating a seller account on Amazon and listing their products with proper descriptions and pricing. Ensure they follow Amazon's guidelines for listing products, including image requirements, product dimensions, and category-specific information, to avoid customer dissatisfaction and negative reviews. 

Assisting Your Clients in Understanding and Managing FBA Fees 

One of the benefits of using FBA is that Amazon takes care of all the logistics and shipping. However, it is important to help your clients understand the fees involved in the FBA process. Amazon charges fees for storage, fulfillment, and other services, and these fees can vary depending on the size and weight of your clients' products. To manage these fees, you can recommend a solution like Bookkeep software, which integrates with Amazon to provide real-time tracking of fees and other financial data. Bookkeep can help your clients understand their Amazon fees and make informed decisions about pricing and inventory management.

Shipping Inventory to Amazon's Warehouses and Managing Inventory 

Guide your clients in shipping their inventory to Amazon's warehouses by providing them with Amazon's detailed instructions for preparing and shipping products, including labeling requirements and packaging guidelines. Following these instructions ensures that their products are received and processed quickly and accurately, making them available for sale as soon as possible. 

Another advantage of using FBA is that your clients can manage their inventory without holding any stock in their own warehouse. Amazon's warehouses are strategically located around the world, allowing them to reach a larger customer base and reduce shipping times and costs. Inform your clients about Amazon's multi-channel fulfillment, which allows them to fulfill orders from other sales channels using their FBA inventory. 

Navigating Sales Tax Compliance with Amazon FBA 

Sales tax compliance is an important aspect of selling inventory with Amazon through FBA. In most states, your clients will reach a tax nexus threshold as soon as inventory transfers into one of Amazon's warehouses in a different state. Consider using a sales tax solution like Avalara, which specializes in tax compliance services and ongoing transactional and nexus review, to ensure your clients maintain compliance.  

Optimizing Operations with Cin7 Core 

To manage your clients' orders, inventory, and accounting, we recommend Cin7 Core, which provides native integration with Amazon FBA. Cin7 Core enables real-time tracking of inventory levels, sales, and financial data, automating many processes in managing an Amazon account. This software simplifies multi-channel management, allowing your clients to handle Amazon FBA sales and sales from other channels like their websites and brick-and-mortar stores. Cin7 Core's comprehensive reporting dashboard provides crucial information about sales performance, inventory levels, and overall business health, helping your clients optimize operations and grow their businesses. 

As an accountant working with eCommerce clients, understanding Amazon FBA and the tools that streamline operations is key to helping your clients succeed. Guide them through the process and recommend solutions like Bookkeep, Avalara, and Cin7 Core to optimize their operations, maintain compliance, and achieve growth. 

Topics: Inventory


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