Starting your own eCommerce business can seem daunting, especially when it comes to accounting and expense tracking. Many eCommerce business owners overlook some important eCommerce expenses. Business owners need to prepare for any possibility. Don’t neglect these expenses when managing your own eCommerce business.
Why Should You Track eCommerce Expenses?
Tracking eCommerce expenses lets you manage your cash flow better and prepare for unexpected expenses. Carefully tracking your business expenses can help you identify areas where you can save money and cut costs. This could mean the difference between success and failure for your business.
Many business expenses are tax-deductible. Tax deductions are applied to your taxable income and can potentially lower the amount you have to pay in taxes. Tracking business expenses can result in significant cost savings during tax season.
How Can You Track Business Expenses?
Tracking business expenses doesn’t have to be painful or time-consuming. The first step is to separate personal expenses from business expenses. It’s important to set up a dedicated business bank account. After that, it’s just a matter of finding the right tool for financial tracking.
The right tools can make tracking expenses quick and easy. ActionShip by Teapplix integrates with QuickBooks and can help you track your business expenses. When tracking business expenses, opt for cloud-based software rather than spreadsheets or paper receipts. This makes it easy to find and manage your business records.
What eCommerce Expenses should you track?
- Customer Acquisition Cost
- Shipping and Returns
- Storage and Inventory Management
- Platform Payments and Marketplace Fees
Customer Acquisition Cost
Customer Acquisition Cost (CAC) is the cost of marketing divided by the total number of new purchases. This is an important key performance indicator to track. This includes any money spent on marketing, advertising, sales, marketing staff, and technology. Remember that it costs more to get new customers than it does to retain existing customers. One of the best ways to keep existing customers happy is by limiting mistakes and ensuring fast delivery.
Shipping and Returns
Tracking your shipping expenses is important for eCommerce store owners. Shipping costs are likely to be one of your biggest expenses. It’s important to know how much shipping costs are for your business so you can create an accurate idea of your profits and losses.
The best way to save money on shipping is through automation. Teapplix ActionShip uses Automatic Rate Shop to help sellers compare multiple carriers for the best shipping price. Sellers can Batch Ship and Bulk Print Labels with ActionShip. This offers significant time and cost savings to eCommerce business owners. Teapplix ActionShip can also help you manage returns and replacements.
Storage and Inventory Management
Storage costs include rent and product insurance. Inventory costs can include lost products due to damage, misplacement, or theft. One way to avoid losing products is to invest in inventory management software. Moving product quickly from storage to buyers is the best way to reduce inventory costs due to lost products.
Platform Fees
Platform fees are the expenses you pay to list your products on a third-party eCommerce site. This expense varies based on which platform you chose to sell on. Some charge a flat monthly subscription and others charge a percentage of each sale.
Marketplace Fees
Most marketplaces charge selling fees. These fees be a flat monthly rate, or they can be based on a percentage of the shipment. All marketplaces have their own fees and fee system so it’s important to do some research on what marketplace best matches your budget.
ActionShip by Teapplix integrates with over 50 eCommerce platforms. Easily track orders and sales from marketplaces including Walmart, WayFair, eBay, BigCommerce, PayPal, Amazon, and more!
Amazon Tracking
For sellers on Amazon, ActionShip by Teapplix can automatically track fees, profit, and loss.
ActionShip by Teapplix can support multiple warehouses and FBA allowing you to easily manage your inventory.
Paypal Debit Card
Paypal offers a business credit or debit card and automatically tracks all expenses using your Paypal account. This makes it easy to track and manage business expenses.
Summary
Tracking expenses is important for the success of your eCommerce business. The first step is to create a business bank account and the next step is to find the best software to track your expenses. Remember to keep your business and personal bank accounts separate.