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How Multi-Channel Ecommerce Selling Affects Sales Tax
Online sales tax is defined as a consumption tax of taxable products sold and collected online. Currently, forty-five states—including Washington, D.C.—have online sales tax rules with revenue departments or tax collection agencies governing the processes. Many states revamped sales tax rules to include specific verbiage for online sales to ensure sales tax compliance. How Selling on Multiple Ecommerce Platforms Affects Sales Tax Selling on multiple ecommerce platforms does not affect the rate of sales tax you charge and collect; however, having multiple e-commerce platforms creates a need for synchronization of data in one place. There are multiple platforms to use, and Shopify offers various sales tax settings and automation in the collecting and reporting of sales tax data to ensure compliance with each state. When Is Charging Online Sales Tax Necessary? Knowing your nexus within your state and those where you sell products is essential. Most states are destination states, and a few are origin or hybrid states—this designation determines who you pay sales tax to. Ultimately, you are responsible for collecting and paying sales tax on taxable products sold online as defined by the state you operate from. One exception to this is that, as the owner, you have the benefit of not paying sales tax on assets/inventory transferred to you as a personal transaction known as an owner’s draw.
Asked 3 months ago
Here’s Why GoDaddy Bookkeeping Is Gone for Good
GoDaddy Bookkeeping allowed e-commerce website users to interface with their desired merchant sites to import sales, expenses, and bank transactions. Importing transactions from financial institutions and merchant sites provides assurance of accurate real-time data. Limitations of GoDaddy Bookkeeping GoDaddy Bookkeeping provided a single-user-only option that prevented businesses from allowing third-party users—such as accountants and certified providers—to access their financial data. This limitation created detrimental challenges for ecommerce merchants looking to grow their business. Additional limitations, including the lack of multi-currency capabilities, project management features, integration issues, and overall customer relations had users searching for more robust accounting options. What Happened to the GoDaddy Bookkeeping App? No longer offering support and discontinuing the bookkeeping app, GoDaddy has partnered with Intuit/QuickBooks, offering a proven and trusted accounting software for ecommerce to meet the rigorous needs of growing businesses. Conclusion: What to Use Instead of GoDaddy There are various types of accounting software available to ecommerce business owners across the web. Desired features for ecommerce would be seamless and supported synchronization of data by integrating third-party merchant sites that allow for accurate real-time tracking. Furthermore, the options for payroll and inventory management allow a more complete and robust experience for users. Popular alternatives to GoDaddy Bookkeeping now include QuickBooks, Xero, FreshBooks, and other similar services.
Asked 3 months ago
Let Bookkeepers Simplify the Management of Your Ecommerce Business
Managing an ecommerce business can be challenging; there are so many things you need to consider. One of the most important—but also the toughest—aspects of operating any business is bookkeeping, and many small business owners opt to hire a professional to do it for them instead of learning bookkeeping on their own. Do you need a bookkeeper or an accountant? There are subtle differences between bookkeepers and accountants: A bookkeeper handles the day-to-day transactions, while an accountant analyzes the financial data. Hiring a bookkeeper will undoubtedly make managing your ecommerce business simpler in various ways. Increased Accuracy of Financial Information One of the most significant challenges of DIY bookkeeping is the accuracy of information. Even with the use of automated bookkeeping software, bookkeeping errors occur. Accurate records are essential to assessing business profitability and preparing taxes. Well-trained bookkeepers understand the accounting cycle, can ensure that all transactions are captured, and provide you with accurately presented financial statements. Ensure Compliance With Applicable Laws Compliance with relevant tax laws is something non-bookkeepers struggle with. For example, many ecommerce businesses are required to collect sales tax, but not all business owners are aware of the tax laws that may apply to them. Experienced bookkeepers can ensure that taxes are collected appropriately. Some may even be willing to file and remit sales tax payments on your behalf. Focus on Growth By Hiring a Bookkeeper Not having to learn the basics of bookkeeping and or keep your books up-to-date means you have more time to focus on growing your business. Bookkeeping doesn't have to be time-consuming. By using automation tools and experts, the time and cost of keeping your books updated can be significantly reduced, allowing you to focus on the reasons you started your business in the first place.
Asked 3 months ago
How Much Does Amazon Take From Ecommerce Sellers?
What Percentage of Profit Does Amazon Take From Ecommerce Sellers? Four factors influence your percentage profits: your chosen sales plan, Amazon referral fees, Amazon fulfillment fees, and other associated costs. First, you need to establish your sales plan and whether you'll be selling your goods as an individual or as a professional. Individuals that sell less than 40 items per month, such as casual sellers, pay $0.99 per item sold. Professional ecommerce sellers that sell over 40 items each month, such as growing clothing brands, pay Amazon a monthly subscription fee of $39. Amazon then adds a referral percentage fee for each sale made. Each item category has its unique percentage charges: you are charged between 8% and 45% based on the item category and the total sales price. Amazon also imposes additional selling costs: inventory, rental book service, high volume listing, and refund administration fees may apply in certain circumstances. Furthermore, Amazon has sales fulfillment fees that vary between individual and professional sellers. In addition, whether you decide to ship your product yourself or use Amazon's logistics services further alters your profit. Can Ecommerce Merchants Make a Profit From Selling on Amazon? Per month, it's reported that: 22% make a profit of under $50013% make a profit between $501 to $1,00027% make a profit between $1,001 to $5,00013% make a profit between $5,001 to $10,0001% make a profit between $100,001 to $250,000 per month. As such, it can be extremely profitable to sell on Amazon for small and growing businesses alike, but your profitability depends on how you set up your sales plan. Some sellers are losing money mostly due to poor sales plans. Other reasons include shipped damaged goods, bad reviews, insufficient stock, and inaccurate Fulfillment By Amazon (FBA) calculations.
Asked 3 months ago
Understanding Financial Forecasts as an Ecommerce Seller
Financial forecasting is a critical component of running an ecommerce business—large or small. The common measure in the corporate world consists of estimating how a company will perform in the future, be it in the second quarter in the second half of next year. A financial forecast, which is put together by utilizing past performances and current conditions, is typically used in business valuation, budgeting, or capital budgeting. Creating a Financial Forecast Purpose What exactly is the purpose of your financial forecast? Is it to meet specific targets? Is it to garner more funding from investors? By defining the objective, you can ensure you will meet your goals. Time Frame Every financial forecast has a target date, whether the third quarter or a five-year outlook. This ties into the previous point of defining a purpose, so you should be able to have an outlined horizon. Gather the Records Financial forecasts are completed by combing through records, historical data, and financial statements. By pondering yesterday's documents, you can better calculate tomorrow's figures. As such, it is essential that you understand how to mitigate financial reporting issues. Document You do not need to wait until the end of your time frame to find out if your forecasts are accurate. Instead, you can home in on the results throughout the period by monitoring the data as it happens. Method Indeed, there are many methods and types of accounting software you can take advantage of to develop a financial forecast, but here are a few of the most popular strategies: Straight Line A look at the company's growth rate, which has been constant and straightforward.Moving Average The average performance of a particular area during a specified time span.Correlation Listing correlating variables and monitoring their movement together.Delphi Multiple members of the company compile and analyze data and information in order to answer questions. Each person has access to the same data but might have different projections. Importance of Financial Forecasting In the end, financial forecasting is critical to the company's success, whether it is because your business needs to access sufficient levels of capital or you want to improve your cash flow. While not every financial forecast will be 100% accurate, this strategy is useful in planning, identifying challenges, and learning solutions. With enough data, you can generally get a peek into the future and help your business grow and adapt.
Asked 3 months ago
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