Inventory Control for eCommerce: Getting the Balance Right

As an eCommerce retailer, you may not have a brick-and-mortar store, or even your own warehouse and fulfillment facility. But that doesn’t mean inventory control has to be more difficult. With the right mix of tools and strategies, you can manage your merchandise supplies and turnover efficiently and cost-effectively.

Decide how much stock to keep on hand.

Your goal is to strike a balance between too little and too much. In most cases, a one-month supply will be enough to meet any unexpected increases in customer demand, without tying up unnecessary working capital or warehouse space.

To calculate your one-month supply, analyze sales and fulfillment information from previous years. If you’re a new startup, research the performance of your product category as a whole.

Allow for variables in your stock-on-hand plan.

Depending on your business, you may need to adjust inventory levels for:

  • Seasonal fluctuations, such as the Q4 holiday shopping season
  • Shipping time from the manufacturer to your warehouse, import delays, etc.
  • Store promotions such as an annual sale

Apply the same variables to fulfillment planning.

During periods of higher sales volumes, you will also need more packaging materials as well as additional employees to do the order processing, packing, and shipping.

Keep a close eye on your inventory — digitally.

Real-time inventory software can save a ton of time and effort. By using bar code identification, it automatically updates your stock levels whenever an item is sold, alerts you, and website visitors when an item is out of stock and tracks delivery to customers.

Keep a close eye on your inventory — manually.

It may seem old-fashioned, but a physical stock count is the only sure way to know what’s in your warehouse. Do it weekly, monthly, quarterly, or annually, whatever makes sense for your business.

Have a plan for out-of-stock incidents.

Your software should notify you in time to replenish stock before it runs out. But in case there are snafus at the manufacturer or in transit, be prepared to respond and keep customers happy:

  • Remove the product page from your website, or add an “out of stock” message letting customers know when it will be available again
  • Take backorders
  • Pay extra attention to stock levels of fast-moving products and reorder them farther in advance

Choose the right business management system.

A system that’s specifically designed for eCommerce is an invaluable asset. For example, it can show order processing and shipping costs in relation to revenues. Even better, it can link inventory management to other operating systems within your business, such as accounting and payroll, greatly reducing administration time and duplication of effort.

Organize your warehouse for a fast response.

Keep your best-selling items on the shelves that are easiest to reach. Slower moving merchandise can go in less accessible areas.

Consider off-site warehousing options.

The advantages of storing some or all of your inventory in other locations include reduced shipping time to your customers and saving on overhead. Check out:

  • Adding regional warehouse locations
  • Renting warehouse space from a national retail chain or postal service
  • Using Amazon FBA (Fulfillment by Amazon) — you advertise your product on Amazon and they handle merchandise storage, order processing, shipping, and customer service

Stay on top of record keeping.

For both current decision-making and long-term planning, “knowing your numbers” is essential. So checking them at the same time every day or week is a great habit to get into. (It only takes a couple of seconds with the right software, just press a button to see inventory status, turnover, and associated costs.) You’ll always have a clear picture of your inventory … and your business.

For successful inventory management, every eCommerce business must find the right balance between too much or too little stock, online and hands-on tools, and on-site or off-site locations. Most important of all, accurate records will reveal what’s working and what isn’t, so that the future will be even more rewarding than the past.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

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New Sales Tax Relief for Amazon Third Party Sellers: Marketplace Facilitator Laws

If you’re an Amazon FBA eCommerce business — or you sell through other third-party platforms such as Walmart or eBay Global Shipping — you’re all too aware of what a complicated mess sales tax has become.

How We Got in This Mess

Beginning a few years ago, most states have made efforts to cash in on the online shopping boom with revised tax laws that terminate out-of-state shipping exceptions. These moves were supported by the United States Supreme Court with its June 2018 ruling in favor of South Dakota in the case of South Dakota v. Wayfair.

Previously, physical presence in a state was one of the criteria for sellers’ tax nexus. The Supreme Court judgment disallows the necessity for physical presence, opening the way for states to require that all sellers — wherever they’re located — register, collect and remit sales tax on purchases shipped to the state.

Because each state’s tax code has its own variations — for example, the minimum dollar amount of sales or number of orders required for sellers to be subject to the law — compliance became a headache multiplied times however many states you have customers in.

The State of California, in particular, has been aggressively pursuing Amazon FBA sellers. After Amazon released its third-party seller data to the state, letters were sent directly from the California tax authority to the sellers, demanding that they register to collect sales tax. (Other states, such as Massachusetts, North Carolina, New York, Pennsylvania, and Rhode Island, have also obtained Amazon seller info. But they seem to be using the info only to verify that registered sellers are actually remitting all the tax they collect.)

The Good News

Recognizing that they have put an onerous burden on small businesses (thus possibly reducing their own tax revenues), more than 30 states have now passed Marketplace Facilitator Laws; and additional states have similar bills in the works.

Simply put, the Marketplace Facilitator Law throws the responsibility back on the platform that “facilitates” sales (Amazon, Walmart, eBay, etc.) to collect and remit sales tax on transactions that take place on their platform. According to the letter of the law, sellers are not required to register with the tax authority in those states.

As of October 2019, the states that DON’T has a Marketplace Facilitator Law are Florida, Georgia, Kansas, Louisiana, Massachusetts, Michigan, Mississippi, Missouri, North Carolina, Ohio, Tennessee, and Wisconsin.

The Not-So-Good News

Unfortunately, platforms may be able to “opt-out” of complying with the Marketplace Facilitator Law if they meet the state’s non-collecting seller use tax reporting requirements.

Amazon, for example, only recognizes its collection requirements in these states (less than half of those that have a Marketplace Facilitator Law): District of Columbia, Alabama, Connecticut, Idaho, Iowa, Minnesota, Nebraska, New Jersey, New York, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont, and Washington.

Note that California is not on that list. We understand they’re still sending out letters to Amazon third-party sellers — without mentioning that the state does have a Marketplace Facilitator Law.

Stay Tuned

This is obviously a very fluid and evolving situation. Some states are already in the process of revising their Marketplace Facilitator Law to eliminate the “opt-out” for Amazon and other platforms.

We strongly suggest that you keep in touch with your sales tax consultant, as your responsibilities could be changing faster than the weather. Better yet, let Xendoo handle all the sales tax compliance hassles for you, from registering to reporting to remitting. You’ve got better things to think about — like growing your business!

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

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Accounting Software for eCommerce

The first step in starting up an eCommerce business is building your online store. Now you’re ready to start taking orders, processing payments, and shipping out your products.

The second step is equally important: choosing software that will keep your books up to date. You’ll need records of invoices you sent and received, capital and overhead expenditures, wages paid to employees, tax returns, and more.

The right software will make it easy for you to track profit margins, cash flow, and other vital metrics that can make the difference between business success and failure.

We’ve listed here some popular choices for you to consider.

Quickbooks

Probably the most well-known software for small businesses, QuickBooks offers you a choice of accounting in the cloud or your internal network. It integrates with most of the top eCommerce platforms, such as Amazon, eBay, Shopify, and Etsy. You pay a monthly subscription fee (after the free trial month), which varies according to the package of capabilities you choose for your business.

Wave

A great option for new businesses on a tight budget, Wave offers free basic services such as accounting and invoicing. Additional capabilities such as payments and payroll are available for modest fees. Data from PayPal, Excel, and many other sources can be automatically imported into the Wave books.

Kashoo

Exceptionally user-friendly for the non-accountant, Kashoo takes just one day to set up and learn. In addition to basic bookkeeping tasks and bank syncing, it provides one-click financial reports, so you can make smart business decisions and breeze through tax time. If you do have any questions, there’s free unlimited support plus a video tutorial library.

Xero

An international leader in cloud accounting, Xero gives business owners unprecedented access, speed, and reliability. Its superior functionality and security have made it popular with accounting and bookkeeping firms — including us here at Xendoo. Solutions include invoicing, payments, payroll, tax coding, and bank reconciliations. Best of all, you can get a real-time view of your cash flow from any mobile device or desktop computer at any time.

Bring in the Pros

Programs like these make it as easy as possible for financial rookies to keep their business on track. But if you still don’t feel comfortable or don’t have the time to do the bookkeeping yourself, consider hiring a professional accounting firm. If possible, choose one that specializes in eCommerce — like Xendoo.

From bookkeeping to income and sales tax filings to financial reports, we take accounting hassles off your shoulders, leaving you with the time and peace of mind to grow your business. And because we know you’re on a budget, our flat monthly fee is less than half what you’d pay a bookkeeper who charges by the hour. Please give us a call if you’d like to know more.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

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What International eCommerce Sellers Need to Know and Do About U.S. Sales Taxes

Until recently, eCommerce sellers located in other countries didn’t have to worry about registering, collecting, reporting, and remitting sales taxes to U.S. states. However, the rules have changed.

In June 2018, the U.S. Supreme Court made a landmark ruling that any online seller with “economic nexus” in a state is required to follow that state’s sales tax laws.

Each state has its own set of definitions as to what constitutes economic nexus, so dealing with the paperwork can get complicated. Here are some of the most common qualifications.

Specific Number of Transactions or Dollar Amount

Most states require sales tax processing from any seller who exceeds a specified amount in annual sales or number of transactions with customers in the state.

In Florida, for example, the minimums are 200 separate retail transactions or $100,000 of retail sales of personal property or taxable services that are delivered within the state.

Any Physical Presence, Including Amazon FBA Warehouses

Even if your main office is located outside the U.S., you may have a branch office, employee, sales rep, or warehouse in one or more U.S. states. That’s enough to establish tax nexus in the state(s).

In the case of states where Amazon FBA handles tax collection — such as Washington and Pennsylvania — you may still be required to file the sales tax returns.

Non-U.S. Citizen Living in the U.S.

The legal residence status of the business owner has nothing to do with the company’s state tax nexus. No matter what your nationality, if you are running your business from (or storing inventory in) a U.S. state, you must comply with the state’s tax regulations.

 

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

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Do Retailers Have to Collect Sales Tax on Drop Shipped Merchandise?

The short answer is probably yes. However, the regulations are complicated and different for every state.

What Is Drop Shipping?

This arrangement allows you to avoid the costs of warehousing and labor of shipping your inventory to customers. Here’s how it works:

1. The customer orders an item from you.

2. You order the item from the manufacturer or wholesaler.

3. The manufacturer or wholesaler ships the item directly to your customer.

How Does Drop Shipping Change Your Tax Obligations?

As you know, whether or not you have to collect sales tax on items sold to customers residing in a particular state depends on whether you have nexus in that state. 

Each state has its own definition as to what constitutes nexus, including the possession of a brick and mortar facility, the presence of sales reps in the state, or even advertising in media viewed in the state. If you have nexus, then you’re obligated to register with the state, collect sales tax, and remit it to the state’s tax authority.

Bear in mind that last year’s Supreme Court decision in the case of South Dakota v. Wayfair means that a retailer’s physical presence in a state is no longer required as part of the tax nexus. So you can pretty much assume that you’ll be dealing with sales tax in every state where you have customers.

Drop shippers are likely to have their own sales tax nexus, depending on where they’re located. So if you don’t have nexus and the shipper does, who’s responsible for collecting the tax?

It should be the retailer; after all, it’s a retail sale transaction between the retailer and the final customer. However, a few states will require the drop shipper to collect the tax. This can turn into a big mess if the drop-shipper is located in another country, such as China. 

Furthermore, if neither the retailer nor the drop shipper has nexus, the customer is still responsible for paying use tax. For those cases, you’ll have to submit documentation to both the state and the customer.

What About Resale Certificates?

If you want to avoid paying sales tax on the goods you purchase from manufacturers or wholesalers, you must apply to every state where you sell the goods for a resale certificate. Then you simply provide this document to your suppliers.

This is also true of merchandise that is drop shipped. So what do you do if you aren’t registered to sell in a state where you don’t have tax nexus?

Most states will still issue a resale certificate. Some will accept the retailer’s home state certificate, or add that certificate’s registration number to their own certificate. Others will accept a comprehensive certificate such as the Multistate Tax Commission (MTC) Exemption Certificate or the Streamlined Sales Tax Exemption Certificate.

However, about 10 states require you to qualify for their own resale certificate. Plus, there’s always the question of whether your supplier will accept any document other than a state resale certificate.

You can see why we recommend that retailers register in every state where they have customers, nexus or not. It might seem like a hassle upfront, but it will save you even more hassle in the long run.

At Xendoo, we specialize in helping small businesses navigate the complex tax regulations that can be so frustrating, preventing you from putting your best efforts into growth and profit-making activities. When you sleep well at night, we’ve done our job right.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

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Calculate Your Capital Gains Tax in 5 Easy Steps

If you’ve sold stock, real estate, or other assets at a profit, you will have to pay income tax on that profit — known as capital gains tax. The amount you pay depends on your income bracket.

Here’s how to figure how much tax you owe. Bear in mind, this calculation is for long-term capital gains — on assets you owned for more than one year. (Short-term capital gains on assets held for one year or less are taxed as ordinary income.)

1. Figure the basis.

The basis is usually the purchase price plus fees or commissions you paid to make the purchase. You may also need to add reinvested dividends on stocks and other factors.

2. Figure the realized amount.

Start with the amount you sold the asset for and subtract any commissions or fees you paid to make the sale.

3. Subtract basis from the realized amount.

The result is your capital gain. (If the result was less than 0, you have a capital loss. Capital losses can be used to offset capital gains on your income tax return.)

4. Determine your tax rate.

For 2018 taxes, the rates are:
• 0% if your income for the same tax year is below $38,700 and you are filing as single, or below $ 7,400 if married filing jointly
• 15% if income is between $38,701 and $500,000 and you are filing as single, or between $77,401 and $600,000 if married filing jointly
• 20% if income is over $500,000 and you are filing as single; or over $600,000 if married filing jointly

Calculate your tax. Apply the tax rate percentage from step 4 to the capital gain amount from step 3. For example, if your tax rate is 15% and your capital gain is $3,000, your tax will be $450 (3000 x 0.15 = 450).

In most cases, capital gains and losses are reported on IRS Form 8949 and Schedule D of your income tax return.

If you have any questions about your capital gains tax liability, or any income tax questions, please feel free to contact your Xendoo tax professional. It’s all part of our service, which sets your mind at rest so you can stay focused on growing your business.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

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Getting started with A2X for Shopify

About A2X for Shopify

A2X for Shopify imports your Shopify payouts and sales and posts them to your accounting system in a way that makes it easy to reconcile the sales, refunds, discounts taxes and shipping against the cash receipts.

A2X for Shopify has several benefits for accounting:

  • Reconciles Shopify Payments perfectly, including all fees
  • Accurate Shopify data imported automatically
  • Scales to support 1000’s of daily orders without sending 1000’s of individual invoices to the accounting system.
  • Supports multiple Shopify stores connecting to a single accounting system for multi-channel sellers.
  • Supports multi-currency sellers and multiple tax rates

Supported Payment Gateways

  • Shopify Payments – payouts will reconcile directly to bank deposits
  • PayPal – transactions posted to the accounting system with a clearing account
  • Amazon Pay – transactions posted to the accounting system with a clearing account
  • Authorize – transactions posted to the accounting system with a clearing account
  • Afterpay – transactions posted to the accounting system with a clearing account
  • Other gateways – posted to an accounting system with a clearing account, please contact support for specific gateway information.

Creating an A2X for Shopify account

Create a new A2X for Shopify account from the Shopify sign-up page.

If you already have an existing A2X for Amazon account, you will be asked to confirm you wish to create a new account.

Once your account is created it should look like this:

Now you are ready to set up your new A2X for Shopify account.

Connecting an A2X for Shopify account to your Shopify store

Click the green ‘Connect to Shopify’ button and input your Shopify shop in the form below and click ‘Connect’:

You will be redirected to your Shopify store and asked to log in and grant A2X permission to connect to your Shopify store. You must grant this permission in order to use A2X for Shopify.

Once the permission is granted you’ll be redirected back to A2X and your first payouts will begin to import into A2X – this process usually takes 10-20 minutes to begin populating in your account and for larger Shopify stores can take several hours to complete.

Once imported you should see the payouts like this:

Note: If you are not seeing any payouts after an hour, please check that your Shopify store uses the Shopify Payments gateway – if not you will need to enable the other payment gateways on the Settings > Connections page first.

Connecting to your accounting system

Click the Connect button for your accounting system and proceed with the connection process. You will be redirected to your accounting system to grant A2X permission.

If you are connecting A2X for Shopify to the same accounting system that you are already connected to with a different A2X account (either with Amazon or a different Shopify store), you should choose to use the existing connection, rather than create a new connection.

Configure the accounts and taxes for your Shopify sales

You need to configure A2X for Shopify to map your Shopify transactions into your accounting system.

A2X will offer to create several generic default accounts, or you can select your own individual mappings. We recommend working with your accountant on this initial setup as it will impact how the Shopify transactions appear in your financial reporting.

You can also customize how the A2X transactions are created, such as grouping the sales by country or province in the Settings > Invoice settings section of A2X. This can help if you have specific tax handling requirements for some countries.

Shopify Payments Gateway

The sales, refunds, and other transactions that are paid via Shopify Payments will be imported to A2X in their own payouts, these will be posted as a single batch of transactions and will always match perfectly to the corresponding deposits from Shopify.

Other Payment Gateways

If you use other gateways or payment methods on your Shopify store, these will be imported separately into A2X for Shopify. Typically you will need to define a clearing account for each one and post the corresponding payment proceeds to the same clearing account. The exact configuration for these accounts will differ depending on the payment methods.

You can enable, configure, and preview these settlements in Settings > Connections.

For more information about these mappings or if you have specific requirements that are not handled by the current mapping, please contact the A2X support team.

Post your Shopify payouts and reconcile them in your accounting system

Once you have connected and configured your account, you can send your payouts to your accounting system. To do that, click the Send link.

You will see the payout in your accounting system and be able to match or reconcile it to the corresponding deposit. For example here is Xero’s bank reconciliation screen showing the matching payouts.

 

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

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Choosing Inventory Management Software for eCommerce

To keep your business running profitably, you need to be like Goldilocks: not too much inventory and not too little. In the first case, you have too much cash tied up in stock and may have trouble meeting operating expenses. In the second, you might miss out on sales.

Here are some of the best systems for tracking and integrating stock, vendors, customers, selling channels, and more.

4PSite

• Cloud-based platform manages inventory, orders, shipping and finance

• Connects with eCommerce platforms such as Shopify, Magento, Bigcommerce and Volution

• Facilitates sales on marketplaces like Amazon, eBay, Newegg, Etsy and Rakuten

• One dashboard shows all platforms and marketplaces

• Flexible and scalable, it lets you easily expand your business

StitchLabs

• Centralized real-time inventory management

• Order management and logistics

• Inventory financial reports

• Multi-channel integration with Amazon, Shopify, Magento, Woo Commerce and more

• Allows team collaborations in daily operations

ChannelAdvisor

• Manages and predicts inventory for selling on multiple sites like eBay, Amazon, Walmart, and Sears

• Digital marketing channel reaches potential customers on Google, Facebook, Bing, and Yahoo

• Price manager keeps your prices competitive

• Provides insights on which products are bought online vs. offline

SellerCloud

• Inventory synced with multiple selling channels, warehouses, vendors, repricers, shopping carts, and payment gateways

• Scheduled listings

• Order processing and shipping

• Product catalog building

• Customer feedback management

nChannel

• Syncs online and in-store sales (buy online, pick up in-store)

• Integrates front end sales channels such as Shopify, Amazon, and Magento with back end fulfillment systems

• Updates inventory in real-time as orders are placed

Dear Systems

• Simple, user-friendly software ideal for small businesses

• Inventory management for one or multiple warehouses

• Manufacturing management

• POS system

• Accounting

• Integrates with many platforms such as eBay, Shopify and Woo Commerce

 

Most of these choices offer a free trial so you can see how easy the software is to use and whether it does what you want it to. Keeping both present and future needs in mind, choose the tools that will save time, keep customers happy, and ultimately help your business grow.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

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California Demands Seller Sales Tax Info from Amazon

In November 2018, Amazon announced that it will comply with the State of California Department of Tax and Fee Administration’s demand to provide third-party seller data. How will this action affect you as an FBA seller?

States Are Getting Serious About Sales Tax

We believe it’s yet another sign of things to come. More and more states will be tracking down the sales tax they believe they’re missing out on through eCommerce.
This isn’t the first time it’s happened. Last year Amazon released seller info to Massachusetts, Rhode Island, New York and Pennsylvania. Some states, such as New York, apparently only wanted to verify that all the tax being collected by registered sellers was being remitted to the tax authority. But California’s demand sets a precedent for a state to contact ALL sellers directly, whether they’re registered to collect sales tax or not, for information about sales they’ve made in the state.

Another such sign happened last June, when the United States Supreme Court ruled in favor of South Dakota (in the case of South Dakota v. Wayfair), that physical presence in a state is no longer required as part of the tax nexus. In other words, you should be collecting and remitting sales tax for any state where you have customers — no matter what U.S. state or country you’re based in.

The handwriting is on the wall, and undoubtedly all states will have some such policy in place sooner or later.

More Hassles for Non-Registered Amazon Sellers

Amazon has not provided sales or warehouse data to California, as some other states have done. All they’ve sent is contact info and federal employer identification numbers.

Apparently California is using that data to send questionnaires to sellers on the list. So far, the questionnaires favor those already registered to collect sales tax, in that you can simply provide your tax ID and leave the rest of it blank. So it appears that the state is really targeting non-registered sellers.

Don’t Ignore State Requests for Info

Many Amazon sellers who’ve already received the California questionnaire have put it aside, assuming the state would be slow to act. That may be true, but sooner or later, it WILL act.

And you really won’t like their next step, which is to turn you over to an auditor who will make an “estimated assessment” of the sales tax you owe. In fact, the auditor will just be guessing, not calculating based on the data you provided. Those guesses are often much higher than reality.

The state will then enforce collection of that assessment; and yes, they have the power to do so.

Don’t Expect Amazon to Hold Your Hand

You may have been expecting that Amazon would collect sales tax for FBA sellers. In fact, it’s already doing so in some states like Washington — usually with the result of more complications for registered sellers and more risk for non-registered ones.

Anyway, you are still liable for the tax in the years before Amazon started doing it. The state can hold you accountable for up to 7 years of back taxes, plus penalties and interest.

States will probably find it easier to pursue the third party sellers directly, rather than Amazon. That’s why we don’t believe it’s smart to rely on Amazon to make this sales tax issue go away.

There’s Still Time to Make a Plan

While it’s true that government agencies can take months to get moving after a policy decision is announced, the trend seems to be toward more fast and aggressive action in the case of eCommerce sales tax collection.  Xendoo helps customers navigate complex sales tax laws by keeping them compliant and leveraging other 3rd parties for tax calculations.   For more about our sales tax services, click here.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

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10 Steps to Get Started Selling on Amazon

Thinking of expanding your retail business into the biggest market platform in the U.S.? Amazon makes it easy for sellers of all sizes to get in on the action, even offering warehousing and fulfillment services.

Here’s how to become an Amazon seller.

1. Create an account.

Don’t use your personal Amazon account. Setting up a separate account for your business will make it easier to analyze and manage financials. You’ll be required to provide a credit card number, which will be used for charging any subscription fees and covering a negative account balance.

2. Figure your costs.

Amazon charges $39.99 per month for a professional account, which allows you to list an unlimited number of items. On top of that, there will be selling charges and other fees, which can total 15% or more of the sale price for some types of merchandise.

3. Figure your prices.

Your selling price must be high enough to make a profit, yet not so high that it will drive customers to your competition. Factor in your overhead such as Amazon fees and shipping costs. Also, research the prices being offered by competitors. Accounting software can make quick work of analyzing each price scenario so you can arrive at a price that’s both competitive and profitable.

4. Select a product listing category.

Make it easy for customers to find your merchandise … and for Amazon to display your item in search results.

5. Create an effective product page.

Remember, your customers are buying the item sight unseen. A product page that omits important information can cost you sales. (Would you buy a TV stand if you didn’t know whether it was big enough to hold your TV?)
• Use search keywords in the text to get a higher placement on Amazon’s search results page.
• Utilize the bullets section to communicate key features and benefits, in case viewers don’t scroll down to the full description
• Photograph(s) should be clear and informative. Showing the product from all sides and in use will help resolve customer questions or doubts.

6. Decide whether you will fill orders yourself or use Amazon.

Fulfillment by Amazon (FBA) handles the warehousing, shipping, and returns for you. This certainly saves a huge amount of work, but of course, they will charge you for this service. Another advantage of using FBA is that it gives you access to Amazon Prime customers who don’t want to pay for shipping.

7. Package your merchandise.

If you use FBA, Amazon will ship your products in its branded outer packaging. But the product’s packaging can display your own brand, a marketing opportunity that should not be overlooked.

If you’re doing your own fulfillment, you will need shipping supplies including:
• Scales for weighing the box and calculating shipping costs
• Strong packing materials
• Labels
• Laser printer

8. Test the market.

When you’re new to selling on Amazon, it’s smart to start with just a few products. This will give you time to become familiar with billing, payment processing, and customer service.

9. Adjust your sales strategy with metrics.

Offering reports on inventory, sales, and more, Amazon’s Seller Central Area can guide your decisions on inventory planning, promotions, and product presentation. Beyond that, measure and track everything you can so you’ll know for a fact what works and what doesn’t.

10. Follow through on customer feedback.

One of the biggest factors in a purchase decision on Amazon is the reviews of a product left by previous customers. Your goal is to have as many positive and few negative comments as possible.
• After purchase, send an email encouraging the customer to review the item.
• Include verbiage that asks them to contact you first before placing a negative review and give you a chance to resolve the problem.
• Respond to potential buyers in the questions section.
• Respond to misinformation in the reviews.

If you’ve completed these 10 steps, you should be well on your way to a successful career of selling on Amazon!

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

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