Amazon sellers can sometimes find themselves in a bit of a trap. A great number of sales occur directly through Amazon's website - searches that originate on the Amazon page itself. This can definitely limit the number of potential customers you can reach.
There are many social media platforms out there, and advertising on any of them can be a huge boon. A well-rounded social media presence can allow you to capitalize on trends and develop a devoted following. For this article, we’re choosing to focus on how using Instagram can help increase your sales.
Why Instagram for Amazon Sellers?
Other social media platforms have larger numbers (we’re looking at you, Facebook).
Some social media networks have a more niche user base (like LinkedIn).
The biggest advantage of Instagram is that it has one of the highest user engagement rates among social media platforms.
Instagram is a highly visual platform that makes it an excellent avenue for showcasing your wares. What’s more, 90% of Instagram accounts follow a business. That’s an indication that the platform’s users don’t just tolerate businesses - they actively welcome them.
Back in the day, people were shown advertisements that they may or may not have enjoyed. Today, people actively seek out advertisements (in a sense), because they’re invested in you and your products. That’s a good place to be.
To get the most out of Instagram, you need to make sure you have the right tools for your business. You’ll start by setting up an Instagram business account - a simple process that gives you access to several analytics tools. You’ll also want to put the URL of your Amazon page in your bio.
This can be coupled with a simple call-to-action - something to highlight the link and brief text description is a popular way to go. Using Bitly or another URL shortener is an excellent way to keep things concise.
You’ll, of course, want to make sure your Amazon page itself is properly set up.
Using taxomate to coordinate accounting software with your Amazon page is an excellent way to ensure that you’re accurately tracking all of the incoming Instagram sales.
Equally, you’d be well-advised to have methods in place to track which URLs are generating sales and leads; Google Analytics can help with this.
Using the Platform
Now that you have everything set up, it’s time to get a following and start generating sales.
There are a few things you’ll want to keep in mind to maximize your reach on the platform:
Don’t post too frequently. People don’t like to have their feeds clogged with the same types of content.
Track how your posts are performing. Log what times you’re posting, the type of content that you’re posting, how much engagement the post is getting, and what kind of engagement it's getting.
Use hashtags wisely. Figure out what’s trending in your industry or your region, and capitalize on it. While you can use up to 30 hashtags that can look a bit spammy, you’ll generally do fine with about 10.
Encourage buyers to follow you on Instagram. A simple “Thank You” insert with your products, coupled with your social media credentials, can do wonders.
With permission, engage in a bit of tit-for-tat with your customers. If they tag you in a post of them holding your product, put that post in your story, or on your page in a more permanent capacity.
Post diverse types of content. Videos tend to be well-received on Instagram. Pictures of finished products, sneak peeks, behind-the-scenes production shots, videos of staff - be creative. Track what types of posts seem to work best for you.
Post consistently. While you don’t want to be spammy, find the best time of day to post, and try to post every day.
Looking to get followers more quickly? Consider offering a promotion to people who like you on Instagram - giveaways can work quite well for this.
Influencer Marketing
While much of the best growth on Instagram happens naturally with the kinds of organic user engagement described above, you might try to get a bit more reach through influencer marketing.
The types of influencers you’ll want to contact and the rates they will charge vary significantly from industry to industry. Here’s an excellent guide to influencer marketing if you want to know more.
You might even find some micro or local influencers who are willing to cross-promote in exchange for one of your products.
Instagram Ads
There are several ways you can advertise on Instagram for Amazon Sellers, from video ads to photo ads.
Instagram ads are at a set CPC (cost per click), and they employ the same incredible targeting algorithms that Facebook ads do. This means that if you’re in a particular niche, you can find people who are interested in exactly that niche, though targeting may cost more.
Social media engagement is all about seemingly organic content. This might seem strange while you’re reading an article about using Instagram to generate Amazon sales, but it’s true nonetheless. That means that even your advertised posts should look organic.
Nothing overproduced, nothing screaming “BUY NOW” - you want it to fit so seamlessly in a feed that someone passively scrolling won’t even realize it’s an ad.
A Brief Postscript on Instagram for Amazon Sellers
As you can see, there are a number of avenues you can use to generate Amazon sales using Instagram. There’s going to be a lot of trial and error, so you might find it best to start slowly.
Get to know the platform before engaging in ad campaigns, and try to grow your presence organically. Stay confident, believe in your business, and post genuine content - the followers will come.
Amazon has always been open about this: the company’s goal is to serve their customers (a.k.a. our buyers) - and to help them find products they would buy. Its key search algorithm, the A10 is built with this aim in mind. A10 is geared to look for signs of whether this outcome is likely or a given product listing.
So if we help it - it should play in our hands. Let's see how we can do that effectively.
What helps and what slogs the sales on Amazon
Like a good house needs a strong foundation - an effective Amazon Ads PPC campaign requires a solid product listing.
So, what should an Amazon Seller do to help A10 Algorithm see his/her product as worthy of a higher search results position?
To begin with, there are 4 broad areas to work on:
Product quality. No amount of marketing or spending (including on Amazon PPC) will help if the product sucks. Or if it looks poor compared to the competitors
Quality product page Note the word “looks” in the above point. It’s not just about the product quality, but also about how well you present it to the market (collectively known as Amazon SEO)
Plenty of product reviews & good stars. Every seller should work closely with their customers to get more reviews. And deal with bad reviews as soon as they come up
Sufficient stock. A10 will be cutting your impressions down if it thinks you are about to run out of stock in less than a week. So have sufficient inventory, and don’t let Amazon think otherwise.
Now, if all above are in order - your product is ready for some serious Amazon marketing!
Every product sold on Amazon has a dynamic value called “Best Seller Rank” (BSR). Many Amazon Sellers use this number as a gauge to see how well the A10 ranks the product in general.
This sales-based score is a PART of calculation the A10 performs when determining where to put your product for any given customer query.
The OTHER PART is a keyword rank, that is specific for any given customer query.
This is important, cause this means two things for you as a Seller:
The more sales you leverage on Amazon.com regardless of the source - the higher up your product will appear both in paid and organic search results
You can (and should) select popular search terms and hone your product’s keyword ranking for each one of them. Make sure it’s on your listing somewhere. And run the PPC to boost this ranking.
Enter the Amazon PPC
Currently, the Amazon Seller Central offers FBA seller with a registered brand 3 very different means of advertising:
Display Ads
Brand ads
Sponsored Ads
Each of them is a unique tool used for a specific marketing purpose (and pretty much useless for other ones). Some just make extra sales. Some promote sales via specified keywords.
Let's see how they can help boost your sales (from least to most significant)
Amazon Display Ads
These are basically advertising banners (or small-window videos) of your product, not dissimilar to Google Display Network ads.
When using this tool, you have to rely on Amazon algorithms to do some audience picking for you. There are two options to regard:
Option One - is to target specific competing products and show your ads near them on the product detail page. This can be a really effective ad if you already know beforehand (e.g. via Search Term Report) what competing/ complimentary products bring you extra sales.
Option Two - is to let Amazon pick some external websites to display your ads/videos on, based on your product description and category. Arguably this is an excellent way to create brand awareness, but less effective otherwise (just like the GDN ads)
Amazon Sponsored Brands Ads
The coolest thing about Brand Ads is that it’s the first thing a customer sees after entering a search query.
Come up with a creative punch-line, add your brand logo, 3 top products - and you are good to go. Just consider that:
Brand Ads tend to convert at 2-4 times the cost of Sponsored Ads campaign (for the same set of keywords)
They are good at improving your brand awareness
One thing Brand Ads are good at is selling higher-end exclusive items with a higher-than-average price tag. The reason is simple: in Brand Ads, there is no price tag shown. If a product is good and has a well-built listing - some people will buy it regardless of the price tag.
Amazon Sponsored Products Ads
This is THE tool to propagate your sales on Amazon.com.
With enough money, a solid Sponsored Ads campaign is a mechanism to exchange some marketing budget for profitable sales. As simple as that.
The “exchange rate” depends heavily on the selection of keywords that you want to show your ads on, however. Remember the part where A10 determines where to put your product on the Search Query results for a specific query? This is exactly that.
By adding the target keywords to the PPC, you are boosting the final score A10 assigns to your product when processing customer queries. And the higher your bid is (for a specific keyword) - the higher up it will be shown.
Finding the top-performing keywords is a difficult task.
It is likely to take many attempts to get things right. Of course, you can use tools like Profit Whales that can generate you rick and structured keyword Amazon Campaigns (including major negative search terms) to get a head start.
But even so, some optimization will be required in the future to single out THE best-performing keywords and assign them the most effective bids. But when done right - you can see sales (depending on your category) within the golden corridor of 10-30% ACoS.
Will the PPC boost in sales last as long as I keep throwing money at it?
Not necessarily.
There is more to the effect of a good PPC than just extra sales with a marginal profit. With a well-built PPC campaign, you can achieve a long-lasting effect that pushes your product listing to the next tier of sales volume.
This is achieved via something referred to as a “sales flywheel”.
Basically, this is an inbuilt A10 feature that upgrades your BSR if you manage to maintain a new (higher) sales volume consistently over 20-30 days.
With a newly achieved higher BSR, your keyword ratings (PPC and organic) will get boost all across the board. Which will put your product in a better position to generate even more sales, and… well, you get the idea. Go ahead and give yours a spin!
While books, balance sheets, accounts payable, and more are the lifeblood of your business, you may dread the day when you have to start thinking about these things. Often sellers don’t consider them until the time comes to pay taxes and certainly don't hire an Amazon Accountant when they start selling.
Find an Amazon Accountant or Bookkeeper
Or maybe they started their business and were in charge of keeping everything up to date. Now the business has grown, and it’s getting more complicated and challenging to keep up with everything.
It’s time you called in the professionals to help with your Amazon business.
Perhaps you’ve considered hiring an accountant or a bookkeeper for your business before. Maybe you even worked with one as a one-off. However, now the time has come where you need to consistently have someone there in charge of the books of your business.
The problem is that people use the terms “accountant” and “bookkeeper” interchangeably. They serve two very different functions.
If you want to know how to find an Amazon accountant or bookkeeper, then the first step is knowing whether you need an accountant or a bookkeeper.
As the name implies, a bookkeeper is in charge of “keeping the books” of a business. They work in the business focusing on the transactional nature of that business. That includes things like recording sales, documenting expenses, processing payments, handling payroll, and keeping the books balanced at the end of the month.
A bookkeeper is also in charge of tracking accounts receivable and accounts payable records. They may use simple accounting software or bookkeeping systems to easily keep track.
For accounts payable, that means ensuring all invoices are correct and bills are being paid properly to avoid fines and penalties. Accounts receivable involves issuing invoices to clients, following up with clients over outstanding balances, and recording any payments received.
Bookkeepers may also help with handling petty cash and putting together financial statements.
What Do Accountants Do?
An accountant will take a broader look at the financial health of a business. Accountants are certainly able to do anything that a bookkeeper can, but they are better to bring in when considering long-term financial decisions.
On top of this, an accountant or a CPA (a certified accountant) is responsible for ensuring a business complies with all tax laws and they prepare tax returns for the end of the year. This includes going over any deductions and credits that you may be eligible.
Accountants can analyze your Amazon books. They can find trends and discrepancies. They also prepare the end-of-year financial statements.
What to look for in Amazon Accountants or Bookkeepers
The first step is deciding if you need an accountant or a bookkeeper. Keep in mind Amazon bookkeeper keeps track of income and expenses, process invoices, administer payroll, and reconcile bank statements. An Amazon Accountant is better for financial advice and long-term planning.
Amazon Accountant or Bookkeeper?
After choosing between the two, it’s time to find one. Amazon Bookkeepers can retained on a contractual basis, part-time basis, or full-time basis depending on what you need.
No matter which option you choose, a bookkeeper should meet specific criteria. Here’s what to look for when choosing an Amazon accountant or bookkeeper.
Criteria #1: Education
As they serve two different purposes, accountants and bookkeepers might have different educational backgrounds.
You should find someone that has at least done some formal coursework with an accredited institution such as a community college.
Criteria #2: Experience
As important as education is, there’s no substitute for a good experience, especially when it comes to Amazon. It takes something a little different to manage the books for an Amazon business.
Find an accountant/bookkeeper that has experience working with Amazon. Your best option is to find an Amazon Accountant. Hiring a bookkeeper or accountant without any experience with Amazon is just asking for trouble.
Criteria #4: Attention-to-Detail
Any financial work requires careful attention to detail. You must find someone who has a detail-oriented personality.
If someone you are considering seems disorganized, then this is a big red flag that they won’t be able to handle the job. If they are very organized and show up to an interview with plenty of information and resources, they could be the right person for the job.
Criteria #5: Technological Skill
You definitely need someone who knows their way around a computer when running an online business, such as an Amazon business.
The good news is that many bookkeepers have a good grasp of technology as bookkeeping itself is now mostly digital,
Find someone who has experience not just with Amazon, but also with the accounting software that you use (QuickBooks, Xero, Freshbooks, etc.).
Cost is an essential factor when it comes to choosing a bookkeeper. How much it costs to hire one depends on what you need them to do. The more work they have, the more it’ll cost to hire them.
Expect to pay anywhere between $5 and $50 per hour depending on the complexity of the task and how much work they have to do.
Keep in mind, Amazon accountants and bookkeepers will likely require you purchase or subscribe to accounting software that makes it easier to calculate financial numbers, such as cost of goods sold, cash flow, profit and loss, chart of accounts, sales volume, etc.
Finding the Right Amazon Accountant for your Amazon Business
There are several things to consider when choosing an accountant or bookmaker for your Amazon business. One of the most important things to look for is experience with Amazon.
Find someone who knows what you need and can deliver on it. Don’t forget to check their qualifications too. A fully certified CPA is usually the more expensive option, but they are often providing the best quality and advice.
Websites to Find the Perfect Amazon Accountant or Bookkeeper
Upwork is a great place to find quality bookkeepers and accountants. We have found a number of highly skilled CPA accountants that specialize in e-commerce and Amazon businesses.
Although it is the easiest option, you will likely have to sift through a bunch of applicants. Remember to be careful and really try to weed-out during the selection process.
LinkedIn isn't just great for networking but can be a very useful tool to find employees. Simply search "Amazon Accountant" or "Amazon Bookkeeper" and lots of results will appear. You can then message the accountant/bookkeeper you are looking to work with.
Additionally, you can also post jobs on LinkedIn (similar to Indeed below).
5. Indeed If you are in need of someone more local, you may want to post a job on Indeed. Applicants to start flowing in shortly after you post. Remember to be specific about the qualifications and expectations you have for your Amazon Accountant or Bookkeeper.
Amazon permits US sellers to enter the European market seamlessly. Let's go through how to become a seller on Amazon.co.uk (and all of Europe) from the US.
Why should you sell on Amazon.co.uk from the USA?
Easily sell across all of Amazon’s EU marketplaces (Amazon.co.uk, Amazon.fr, Amazon.de, Amazon.it, and Amazon.es).
Using your current LLC may be the simplest way to start your business on Amazon.co.uk. But there are two important considerations to make before you decide:
You will have to register for VAT to ensure that you have an EORI number to import goods into the UK/EU.
Amazon merges your US and UK accounts (where selling privileges are removed from one account, both accounts may be banned).
VAT registration as a Non-UK registered company:
Once you become an international seller, the law states that you are bound to pay and collect VAT if you have set up inventory or is sending it to the EU.
If at the moment you are not a registered business in the UK but wish to sell your goods on Amazon UK and other non-EU countries from the USA, you should proceed to obtain VAT registration. This registration would provide you with your EORI number. The EORI number would permit you to land and sell your products within the UK and surrounding EU nations.
Once you make a sale, you must collect and then pay the VAT amount to the HRMC. This means you must include an additional 20% to your selling price. In order to simplify the complicated process, there is a Flat rate VAT.
OPTION B: REGISTER A UK LTD COMPANY
Setting up a UK LTD company to being your trading on Amazon UK/EU would confer you with two benefits:
Your central Amazon.com account would remain independent from your other Amazon UK/EU. This enhances your account’s security and minimizes the scenario where all your accounts would get shut down simultaneously.
Amazon requires registration only when the sales you make becomes greater than the VAT level set for each country.
Step 2: Apply for a VAT number if Required
After submitting the registration, head to www.gov.uk and obtain your unique VAT number.
Upon successful completion of the UK VAT registration, your certificate of registration should come within 14 days.
Step 3: Register for Amazon.co.uk
Once you obtain your VAT registration certificate number, you have the option to apply for a seller central account in any marketplace of your preference. This would be different from your Amazon.com seller account.
In order to obtain a UK seller central account, you require the following information:
Any valid credit or debit card.
A valid phone number of any country.
Tax information – EIN (or similar if you are not based within the US), and a VAT registration number.
A bank account from your original country. You can also use a Payoneer account to act as an intermediary with the bank.
Step 4: European Fulfillment Network or MultiCountry Inventory
Upon the arrival of your inventory to Amazon’s FBA warehouse in Europe, you have two options to proceed with fulfillment, it could be either European Fulfillment Network (EFN) or Multi-Country Inventory.
European Fulfillment Network: EFN permits FBA registered sellers in countries such as Germany, France, Italy, and the UK to maintain their inventory within a single country’s FBA center and ship throughout Europe.
Multi-country Inventory: The other option is to store inventory at each country and then offer to ship from these FBA centers to countries.
After opening your Amazon UK seller central account, you will be able to ship to any country in Europe!
Amazon account suspension. Those three words are enough to strike fear in the heart of every seller on the Amazon marketplace. If you've been selling a long time, you may have already faced a suspension. Or not.
So, why do Amazon sellers get suspended? What should they do when they receive that dreaded email from Amazon? And what should you know about common reasons for suspension? Let's take a look.
Reasons for Amazon Account Suspension
One of the easiest ways to understand Amazon's rules is to look at the Selling Policies and Code of Conduct. Let's run through an overview and some examples:
Amazon requires you to provide accurate information to Amazon and our customers at all times. In other words, listings and product photos always must be accurate. Also, make sure you to provide Amazon with accurate shipping information.
Additionally, you must be aware that there are some items you simply cannot sell on Amazon. Become familiar with Seller Central's Restricted Products page to make sure you are not creating a listing for a restricted item. Amazon states sellers must "use a business name that accurately identifies your business and list your products in the correct category." All in all, it's important to be familiar with Amazon's Terms of Service for every part of your business.
2. Acting Appropriately
Examples of acting inappropriately may include, but are not limited to:
Creating more than one detail page for a particular product.
Posting inappropriate or offensive product images.
Accepting fake orders or ordering from yourself, or manipulating sales rank in any way. You also can't include sales rank information in your product descriptions or titles.
Raising product prices after confirming an order.
Falsely inflating web traffic to your listing - Amazon gives the examples of paying for clicks or using bots to click on your listings.
Black hat tactics: If you try to damage another seller in any way, Amazon will respond and it won't be good. Just don't do it.
Violating any of Amazon's policies or your Seller Agreement with Amazon via a third party. If someone breaks one of Amazon's rules on your behalf - a VA, an employee, etc, it still falls on you. Make sure you choose partners that understand Amazon's rules and abide by them.
Obviously you could write a whole blog post about unauthorized items. This is an overview, not an exhaustive explanation of all of Amazon's rules. If you have concerns about any of these areas it's important to read Amazon's policies thoroughly.
3. Reviews
Amazon account suspensions often occur for review manipulation of listings. You can't pay a customer for a review or offer any incentive (that means coupon codes, free products, reimbursement, et al). NO compensation is allowed. Amazon wants to keep reviews of products on its marketplace clean and helpful to potential buyers. Therefore, you're also not allowed to ask for a positive review, nor are you allowed to ask for reviews from a select group you know has had a good experience. Also, you can't write reviews on your own products or competing products.
Amazon has a page in Seller Central that outlines all of the rules related to customer reviews. Bookmark that page and refer back to it often, as Amazon is making changes and it's important to keep up to date. In fact, Amazon has stated that they will be consolidating information on December 27th. Again, there are a lot of rules around customer reviews and Amazon is making it a priority to protect these ratings on Amazon.com and international marketplaces.
When it comes to getting reviews in a TOS-compliant way, there are a few options. Amazon recently introduced the Request a Review button in Seller Central and opened the Amazon Vine program to brand registered third-party sellers with fewer than 30 reviews. You can send a neutral request for a review with Buyer-Seller Messaging or a tool like FeedbackFive. If you've recently launched your product, the Amazon Early Reviewer program might help you get those first few ratings.
4. Communications
This has been a confusing topic as of late. Communications to customers must be sent through Buyer-Seller Messaging. Amazon states sellers may not send unsolicited or inappropriate messages and cannot be for marketing.
Since many sellers have received restrictions from contacting buyers, it is safe to say that, as of writing, there are some unanswered questions about Buyer-Seller Messaging and requesting product reviews.
In a recent article by Chris McCabe, we provided some information regarding what we've seen with our customers. We believe, as do other industry leaders, that clarification from Amazon is coming, and that sellers are still permitted to ask customers for reviews, as long as you follow the rules.
5. Customer Information
Amazon is very protective of buyer data. Sellers who merchant fulfill items might receive addresses and phone numbers necessary to complete an order.
Amazon requires those sellers to delete that information once the order has been processed. They don't want sellers to use personal information to contact or market to buyers, or to share that data with any third-party.
6. Diverting Sales
Circumventing the Amazon sales process or directing customers off Amazon is strictly prohibited. That is why you may not include links to your website, email addresses or even links to your listings or Amazon storefront in messages to buyers.
7. Multiple Accounts
Without permission from Amazon (with a legitimate business reason for it), you may not have more than one selling account on Amazon.com.
In order to be considered for multiple selling accounts, you'll need to provide a legitimate business justification for needing more than one account.
8. Infringement Notices
While it's ok for brands to choose to protect their brands on the Amazon marketplace, it is against the rules for an agent or agency with an active selling account to report an intellectual property infringement. They go on to state that if filing said infringement notice would benefit a seller, even a seller who is an agent of the brand, that seller can be suspended or banned.
I encourage you to comb through Seller Central and make sure you understand all the possible reasons for an Amazon account suspension.
Account Health Services and Amazon Account Suspension
In July, sellers received an announcement that Amazon was going to give a 30-day notice and justifications for Amazon account suspensions. According to experts in the industry, that hasn't happened yet. However, you may get a heads-up from Amazon.
In a recent WebRetailer article, Chris McCabe from ecommerceChris gave readers an overview of the Account Health Services team (AHS) at Amazon and their role in account suspensions. He says the team was formed in 2018 and call sellers before an Amazon account suspension. At first, they only gave the seller 24 hours to respond before they received a suspension. Chris says that now it's 48-72 hours and more sellers are getting a call prior to suspension.
AHS can give you some information about your forthcoming suspension, let you know whether your Plan of Action (POA) is up to snuff (more on that later) and check the status of your appeal. However, AHS cannot get other teams to move faster or provide a definitive answer on whether your appeal is going to go through. If your appeal is denied, they may not be able to tell you why.
Because of the inconsistency, it's vital that you understand what you're dealing with should you receive the heads-up call that you're about to be suspended, or, worse, an actual suspension.
What To Do If You Face Amazon Account Suspension
I'm going to cut to the chase. I strongly advise you, should you be facing an account suspension on Amazon, contact a professional. I've referenced Chris McCabe in this article a few times, and he's the first person I recommend to my seller contacts for an Amazon account suspension. But, you need to know the process, so let's dive into what you need to do.
Identify what Amazon says you've done wrong and go ahead and fix it. If you've found an answer to the problem, great! If not, look at your listings to make sure they're compliant and honest. Make sure you don't have any non-compliant ASIN variations. Check and recheck everything, and when you find the issue, fix it. If you can't find the problem, ask an expert for help.
Write a thoughtful and thorough POA or have an expert write it for you. Make sure you have implemented all corrections prior to writing your POA. Outline in detail what you have done to fix the problem.
Follow up. If you get a rejection, escalate the issue (again, an expert comes in handy here) and keep trying. You won't always get the same person when you contact AHS, so keep trying and ask for someone in authority.
Amazon account suspension is a scary thing. Protect yourself, follow the rules, and try not to get suspended. If you do, be thoughtful and cautious about how you proceed. Happy Selling!
Author: Liz Fickenscher
As the Industry Liaison for eComEngine, Liz Fickenscher is committed to providing valuable information to Amazon Sellers through blog posts and informational webinars. Liz is the affiliate ambassador, engaging with customers and strategic partners to build relationships between eComEngine and the eCommerce industry.
Bookkeeping is one of the most critical aspects of doing business on Amazon. As such, it is essential to use an accounting system (QuickBooks) and properly set up your account. Below is a guide to Setting up QuickBooks for Amazon Sellers the correct way.
Getting Started with QuickBooks
The first step of setting up QuickBooks for Amazon is signing up for a QuickBooks account.
QuickBooks has several different plans on offer, but Essentials is your best bet. Enter all the necessary information and proceed to your account dashboard.
Navigating QuickBooks
Now that you’ve taken the first steps to setting up QuickBooks, we are going to get started with the interface.
The service has three main menus you should understand, although there are several different paths to the same destination, as is the case with anything like this.
Create Menu
The create menu looks like a “plus” sign and is in the top right.
The create menu contains a lot of the day to day operations of a business. Here is where you write journal entries, enter expenses, write checks, and make deposits.
Preference Menu
The preference menu, also in the top right, looks like a "gear".
Here you can find your preferences and manage the reconcile feature of QuickBooks.
The gear section is also where you can find the menu to add some other users and other things that you won’t be using too much, but it’s always good to know where these things are if you need them.
Navigation Menu
You should also get acquainted with the left-hand column menu. This menu is the navigation menu.
From the navigation menu you can find all the other pages you can access. Each link goes to a different page except for Transactions, which opens up to reveal additional options.
From the navigation menu, take a look at the banking page.
It’s from the banking dashboard that you can find all of your incoming banking and credit card transactions. The reports page is where you can find all of the reports about the fruits of your labor and see what your hard work has earned you.
You can take a look through the other menu options too.
You will likely build up quite the list of vendors in your time as an Amazon seller. The customer's list is mostly going to be Amazon. They won’t be purchasing from you directly, but they do provide you with the income from your sales, and profit comes from customers. You may also get money from Shopify, eBay, or your proprietary storefront.
You don’t need to add details about the individuals who order from you into QuickBooks. This can quickly become thousands of names, most of which will only ever be seen once.
There’s no reason to track them all. If you were interested in individual customer information, then you can get it from Amazon (or the storefront you use), so there’s no reason to make another note of it when setting up QuickBooks.
Setting up QuickBooks Preferences
There are several options you can play around within the preferences menu, but most of them aren’t related to your business.
The preferences can be found by clicking on the gear icon and opening up the menu. From there, click on Account and Settings to be taken to this page;
The Company section is where you can fill out the critical information about your company including contact information and a logo – should you have one. Don’t worry if you don’t have one though or don't want to hassle with uploading.
From the company section, you can also choose the type of business you are managing (Sole Prop, S Corp, LLC, etc.). See our Guide to Choose a Legal Entity for Amazon Sellers.
Finally, take a look at the marketing preferences section. Here is where you can choose whether or not you want to receive emails, postcards, and the like from Intuit – the company behind QuickBooks.
There’s nothing in Sales, Expenses, or Payments that you need to worry about too much. So let’s skip ahead and look at the Advanced menu to the left of this section.
When you open up the Advanced menu, make sure of the following
The fiscal year and tax year begins in January (unless it doesn’t work for you, but this is rare).
Accrual rather than Cash is selected for the accounting method.
Everything else in the preferences menu can be left where it is for now.
Click on the Done button at the bottom of the screen to save these changes.
Setting up QuickBooks Chart of Accounts
The chart of accounts (aka COA) section can be considered the foundation of your accounting.
The goal of the COA is that you need to make it as detailed as possible to get high-quality information from it. You want to make sure that the data is valuable or all it’ll do is make it take longer to do your books.
As you might have guessed, there’s no such thing as a “one size fits all” solution for a chart of accounts, no matter how much people like to claim otherwise.
I’ll provide you with a basic COA that you can use for an Amazon business, but don’t to add to it as you grow.
We always recommend keeping the following simple concepts in mind when adding accounts:
Try to keep your COA structured and organized. The messier the chart of accounts get, the more likely there will be errors and other problems to account for.
Keep it accurate from the start!
Below is a list of accounts that you may want to put in your COA. QuickBooks adds some accounts by default, but some you may need to add manually.
You may want to deactivate other accounts QuickBooks automatically adds to keep it looking clean. So, here’s the list of accounts:
Manually Adding to your QuickBooks Chart of Accounts
To manually add accounts, go to the transactions menu. This shows all of your existing accounts. If there are any missing accounts, click the New button to the right. A window will pop up, and from here you can choose an account type. Choose the type and then the specific account you need.
Adding a new account in QuickBooks
Please note: leave the balance, date, and sub-account fields are for now. You don’t need to mess with those.
Pro Tip: With numbered accounts (e.g., banks or credit cards) it may help to add the last four digits of your account # to the name in QuickBooks. This makes it easier to find if you have more than one bank account or credit card for your business.
Cost of Goods Sold Example
Same as before, select the New button in the transactions menu. Choose “Cost of Goods Sold” as the Cost of Sales detail type. Enter the name "Amazon Service Fees – CoS" to make it easily identifiable. That's it!
Pro Tip: when you would like to enter multiple accounts, you should choose “Save and New” instead of “Save and Close.” The latter makes you go through the whole process from the beginning, while the former opens up this window again and lets you put a new account type in immediately.
Tips and Best Practices for Working with Chart of Accounts
1. Old Accounts
If you don’t plan on using an account any longer, make the account inactive or make it invisible. Delete any accounts that you never use.
There may be some accounts that QuickBooks consider essential and won’t let you delete.
2. Overly Specific Accounts
Most businesses have “Meals and Entertainment” as standard. Some people would prefer to split them into specific accounts for “Meals” and “Entertainment.” That make sense and would be okay.
What you don’t need to do is take it another step and have different accounts for different restaurants. You don’t need to be so specific in naming your accounts.
An account like “Office Supplies” is standard for most businesses. Some people will then make an account for “Office Equipment,” thinking that they’ll use it when they buy something for their offices like a calculator or printer. This is going to trip you up in the future. Where would you put toner? Toner belongs to office equipment, but it isn’t equipment in and of itself.
If you aren’t able to tell instantly where something goes between two accounts, then you’ve likely got too many accounts that are too similar. It’s time that you started merging and renaming accounts and thought about reigning in the tendency to add new accounts rather than pick from the ones you have.
3. Specific Dates
Much like specific accounts, particular dates have no place in the COA.
For example, you could have an account called "State Taxes." What you don’t need is an account called State Taxes 2018. When will you ever use that when the year is over again?
Any account that is either only going to be used a few times or is otherwise too specific, should be avoided.
4. Accounts Correctly
If you’re keeping track of loans in your equity account, tracking credit cards in bank accounts, and tracking expenses with negative income, or are doing anything weird like that, then you’ll make a lot of trouble for yourself.
While you might be able to force an account type to do something else, what you end up with is a strange-looking financial statement and – most likely – errors with your books. Ask an expert or check the QuickBooks forums if you are confused.
5. Relying Too Much on Miscellaneous Accounts
If over 10% of your entries wind up in miscellaneous or uncategorized then you are likely doing something wrong.
There should only be a few transactions that you can’t classify properly when setting up QuickBooks.
Less than 1% of your total expenses should come under miscellaneous accounts by the end of the year. Ideally, it would be best to have no uncategorized expenses at all.
Connecting Banks and Credit Cards
After setting up QuickBooks chart of accounts, let's connect your bank and credit accounts for automatic sync with QuickBooks.
Open up the left main-navigation select Banking. The first time that you open up the banking section, you will be presented with a page about connecting accounts.
Search for the name of your bank - follow the steps to connect your bank account and finish setting up QuickBooks bank connection. Make sure that you also connect any credit cards you have for your business after connecting the business bank account.
Pro Tip: If you use a PayPal account for your business, then you can connect it now too. We don’t recommend doing that though.
Pro Tip #2: We recommend not connecting your Square or Stripe accounts. Most people who do end up connecting their Stripe/Square accounts create a complicated mess of duplicate transactions as these payments are also going to your bank account.
Fixing Opening Balances
If you have recently opened a bank account ( i.e. within the past 90 days) QuickBooks should correctly display the opening balance for you.
If the bank account is older than 90 days, then you have to adjust so your books to only show relevant data - not old activity and balances.
If you started your business last year (let’s say October as an example) then I recommend setting up QuickBooks to get back to January of this year at the very least.
If you go back to when the business opened up and the account was new, then there’s no need to worry about fixing balances. If your account has other activity or you don’t go all the way back to when it was opened, then you will have to change the opening balance.
PROTIP: Look at the bank balance on the day before your first business transaction. That is how much you want to enter as the starting balance for your business. That way the account should reconcile, meaning that the balance from QuickBooks matches that of your bank statements. You can do this by adding how much money you need through a journal entry to get the correct balance. You can attribute this to the owner or a shareholder so that it doesn’t affect business operations.
Entering Previous Expenses
Now we’ll be using the list of expenses that you made before opening your business bank account or using a business credit card.
We’ll go through one journal entry per month to allocate the expenses to the proper account and offset the total you spent as money invested into the business. This helps to reduce your tax burden as it allows you to write off the investment against the income it earns.
Start by sorting expenses by date and then grouping them together by month. If you had your first expense in January for example, then you are going to combine all of January into a single entry and then February into a separate entry and so on and so forth until everything is done.
If you have more expenses than you paid off with personal funds even after opening a bank business account, then these can be included in this way. You should try to move towards purchasing everything through business accounts as soon as possible though for tax and liability purposes.
That's all we have for now for setting up QuickBooks as an Amazon FBA Seller. For additional tutorials check out the rest of our taxomate Amazon accounting and booking blog!
The main reason that people will comfortably buy things from Amazon – and thus the people selling on there – is because they know that Amazon Prime allows them to receive their packages in two days, if not less. Everything great must have some kind of catch to it though, for Amazon sellers, the catch is Sales Tax Nexus.
Amazon can deliver products nationwide so quickly because they have them sent out to distribution centers before they are even ordered.
You must be registered as a Pro Seller to get Amazon sales tax, which is important because their reports are far more comprehensive for a Professional Seller than they are a regular one.
Amazon FBA Sales Tax
What is Sales Tax Nexus?
The word “Nexus” comes from the Latin word meaning to “tie” or “bind.” A sales tax nexus could be considered something that ties your business to the state.
U.S retailers are required to collect the sales from buyers where they hold a “sales tax nexus.” The following activities may establish a sales tax nexus:
Location: This includes any physical place of business such as an office, store, or warehouse.
Personnel: The personnel at your business are individuals who are employees, salespeople, contractors, installers, and anyone else who works for your business in some capacity.
Inventory: Many states will consider holding inventory in-state to create a nexus even if you don’t have any other employees or places of business there.
Sales (the Economic Nexus): For about half of states with a sales tax, sellers who generate revenue or transactions over a set threshold will be required to collect sales tax. The threshold for revenue is around $100,000 and the transaction threshold is around 200, but it can vary state by state.
Affiliates: An affiliate is someone who advertises your products and services for a piece of the profits and having one can create a nexus.
Drop-Shipping: There are some situations where having a third-party shipping service that delivers products for you creates a nexus.
Selling products at an event (i.e. a tradeshow): Some states consider you to have nexus even when selling only temporarily, such as at an event.
What is Economic Nexus?
An “economic nexus” is when sellers are required to collect sales tax because they reach a threshold of either money from the sales or number of transactions. These thresholds are usually $100,000 in sales or 200 transactions in a year.
Economic Nexus is The Newest Kind of Nexus
The economic nexus is the newest kind of nexus for the United States. Around half of the states with a sales tax have their own economic nexus laws. More states have announced they will introduce laws or regulations about economic nexus too.
The economic nexus only came into effect in June of 2018, following a Supreme Court ruling in the case of South Dakota vs Wayfair, which is why it’s a relatively new issue.
How to Determine you Have a Sales Tax Nexus in a US State
Here are the questions you can ask yourself to determine if you’ve got nexus with a state;
Do you have a physical presence in the state, such as a location or warehouse?
Do you have anyone working for you in the state such as a contractor, employee, installer, or salesperson?
Do your sales or transactions in a state exceed the economic nexus threshold of that state? If you don’t know, then check with TaxJar’s Sales and Transactions Checker
Do you have a relationship with a drop-shipper in the state?
Do you have an affiliate program and any affiliates in the state?
Do you cross state lines to sell products at events like craft fairs and trade shows?
If you answered yes to any of those questions, then here’s how you can explore if you have nexus or not;
You have nexus. Now what?
Amazon Sales Tax Nexus
Amazon makes it easier to determine sales tax nexus thanks to their Amazon Fulfillment reports. These reports will tell you where Amazon stores your inventory. Here’s how to access the Amazon seller sales tax report:
Open Seller Central
Open Reports
Open Fulfilment
The Inventory Event Detail section shows you where Amazon stores you inventory
There’s a lot of information on the Amazon Inventory Event Detail report, but it’s better to download the report for yourself then try to read it all on the screen.
Choose the download tab and then pick a time-frame that you want. If you’re interested in determining the states where you have sales tax nexus, choose the date when you first started selling products on Amazon.
You can do this using the exact date option on the report. Choose the dates you want and then wait a few minutes for the report to be generated. It can take longer if there is more data to collect.
You can download the report when it finishes generating. The report will be available as a .txt file and you can open it as is or import it into Excel. Select All and copy and paste it into the spreadsheet. The “fulfillment-center-id” column is where you can see information on all the Fulfilment Centers where Amazon stores your inventory. This is where you have nexus and where you would need to collect sales tax.
After opening the Inventory Event detail, you’ll be greeted with something like this;
The column that is most interesting to us right now is the fulfilment-center-ID. In the worksheet, click the top row of the column and choose the filter symbol, either on the Quick Access Toolbar or with the ribbon, and this puts a down-arrow in the top row of the worksheet.
Click on the down-arrow and you’ll find a list of all the fulfillment centers where your inventory has been stored. Warning - this may be quite a lot of information!
Fulfillment Centers where Amazon stores your inventory
Determining Your Sales Tax Nexus
You’ve now got a complete list of all the fulfillment centers where Amazon has stored your products.
If there are any centers that you don’t expect to see then uncheck “Select All” and click the boxes for the centers that seem questionable. This brings up a list of all the products stored in those centers. This is just for your information though. You need to know all the fulfillment centers where your inventory is located.
You might be wondering what fulfillment centers the letters and numbers represent. The center names are determined by the airport closest to the fulfillment center. DFW would mean Dallas Fort Worth Airport, which is – of course – in Texas. CHA is the Chattanooga, TN airport, meaning Amazon stores your inventory in Tennessee.
Amazon Fulfilment Centers
The numbers after the airport designation indicate how many fulfillment centers are near the airport. This website has a list of all airports by code and state, and here is where you can find a list of all the many Amazon Fulfillment Centers.
