Bookkeeping for Amazon Sellers and E-Commerce Stores

The Bookkeeping Challenge for Amazon Sellers

Bookkeeping for Amazon sellers is notoriously complex. Between FBA fees, storage charges, referral commissions, advertising costs, and returns processing, the true cost of selling on Amazon often surprises new sellers. Without proper bookkeeping, you cannot know whether your products are actually profitable.

Amazon's Settlement Reports contain dozens of line items that must be properly categorized and reconciled. Many sellers discover at tax time that what they thought was profit was actually eaten by fees they were not tracking.

Understanding Amazon Fee Categories

FBA Fee Breakdown

Fulfillment by Amazon charges multiple fees that impact your margins:

Referral fees: 8 to 15% of the selling price depending on category
FBA fulfillment fees: Based on item size and weight, typically $3 to $8 per unit
Monthly storage fees: $0.87 per cubic foot standard, spiking to $2.40 during Q4
Long-term storage fees: Additional charges for inventory stored over 365 days
Removal and disposal fees: Costs to return or destroy unsold inventory

Fee Type	Typical Range	Impact on Margins
Referral Fee	8 to 15%	High
FBA Fulfillment	$3 to $8 per unit	High
Storage (Standard)	$0.87/cu ft/month	Medium
PPC Advertising	10 to 30% of revenue	High

Inventory Accounting Methods

FIFO vs. Average Cost

Most Amazon sellers use either FIFO (First In, First Out) or weighted average cost for inventory valuation. FIFO assumes your oldest inventory sells first, which aligns well with physical product sales. Whichever method you choose, apply it consistently across all products and reporting periods.

Tax Tip: Your inventory accounting method directly impacts your cost of goods sold and taxable income. Consult with a tax professional to choose the method that best fits your business. Once selected, the IRS requires consistency in applying your chosen method.

Cost of Goods Sold (COGS)

For each product, track the landed cost including purchase price, shipping to Amazon, customs duties for imported goods, and any preparation or labeling fees. Accurate COGS is essential for understanding true product profitability. Use a profit margin calculator to evaluate each SKU.

Sales Tax Compliance

Amazon collects and remits sales tax in most states through its Marketplace Facilitator program. However, sellers must still register in states where they have nexus, file returns, and ensure compliance. FBA inventory stored in multiple warehouses can create nexus in states where you never expected to have tax obligations.

Reconciliation Best Practices

Reconcile your Amazon Settlement Reports with your bank deposits every two weeks. Match each settlement to bank transactions and investigate any discrepancies immediately. Track returns separately from sales, and monitor reimbursements for lost or damaged FBA inventory.

For sellers managing multiple channels, Finntree consolidates all your financial data into a single dashboard. Combine Amazon, Shopify, and direct sales tracking with automated bank reconciliation using our cash flow tools.