I get this question very often. I also make sure I point out to sellers, 1) how important is it to you to track what I call sku level profit and 2) how important is the management analysis of your amazon business.

In my opinion, there are 2 key parts to your bookkeeping and accounting as an amazon seller.

Part 1 – Tax Reporting

This is your full books and records for your tax authorities like the CRA or IRS.  Using QuickBooks online as an amazon seller is our recommended software solution since it syncs up with your bank accounts and credit card statements.  You can record your sales manually with one of our methods or use a service like taxomate to automatically do it.

This tax reporting as I call it, is recording things that happened in your business but at a high level.  You’re recording a $1,000 purchase at Walmart.  You are not breaking that down to the items that were purchased, just the one receipt.  Recording sales for 2 weeks or a month at a time.  Again that is total sales and not on a sku level.  This type of reporting is for tax purposes and for audits.  It is essential, however very different from the second part.

Part 2 – Management Analysis

This is where you are evaluating individual sku profitability.  Where you are digging into exactly what you made on each item after it was purchased and then sold.  This is what is key to your business on a detailed level and you need to understand to ensure you are profitable.

This business can take a lot of cash flow and it is easy to keep buying more and more, but if you’re not sure of your profits then you might be buying and selling for very little margin.  It is easy to keep buying and not correctly reviewing what your individual profits are.  By doing that, it will make sure you are profitable, even when it seems like you have no cash since you keep reinvesting.  I suggest when you’re making buying decisions on your purchase tracking sheet you should note your expected selling price at the time of the buy. This way you also have historical data to review after the sale and compare what you actually sold it for, vs when you made the purchase decision.  This will force you to look at market movements on the items you are buying.  Perhaps it went down since it was a purchase from a national retailer on clearance and everyone and their uncle bought it decreasing the price.  Or maybe it was hard to find and by the time you sent yours in, the prices were even higher!  Or maybe it was so heavy and large the fees were higher than you estimated.

A few different tools out there work very well to help you with this and here are a couple we like.

1. Jungle Scout – They offer a full suite of products, not just profit.

2. Seller Legend – Has a lot of custom data you can work with.  

3. Inventory Lab – Only for US at this time https://inventorylab.com

   4. Shopkeeper – New offer but also does both markets.  

Each of these has various free trials so you might consider testing all of them and seeing which you like.  All of the above will work on multiple markets, however inventory lab will only work on .com. The shipment creation function is awesome and totally worth mention if you are only selling on .com so we had to include it.