Typical 7-Figure Amazon Seller Finance Tech Stack
Overview of the 7-Figure Seller's Finance Stack
Successful Amazon sellers managing seven-figure revenues or more often rely on a complex assortment of financial tools and software. This tech stack typically includes accounting software, data entry methods, third-party integration tools, additional e-commerce financial analysis tools, and sometimes inventory management forecasting programs. Understanding the common choices and their limitations is helpful for sellers to understand before deciding on their own tech platform as it can be hard to switch later on.
Popular Accounting Software in Use
QuickBooks: The Standard Yet Costly Option
QuickBooks is widely used for its robust double ledger system and accrual accounting capabilities. However, its transition from a desktop version to an online platform has escalated costs. Including inventory, it costs a minimum $90 per month, although it is the most widely used software and any CPA can work with it easily.
Xero: An Affordable Alternative with Limitations
Xero offers a more budget-friendly solution ($42-78/ month with inventory) but is often perceived as a ‘light’ version of QuickBooks, particularly in its reporting capabilities and overall robustness.
Data Entry Methods and Their Challenges
Accounting software alone isn’t a magic fix and won’t do everything for you, as you still need to record transitions and get financial data into the platform. For Amazon sellers, depending on their location on the time to money matrix can do manual entry or pay for integration tools
The Labor of Manual Entry
Manual data entry, while cost-effective, is time-consuming and prone to human error, making it less viable for larger operations. This involves taking the settlement report on Amazon payments and formatting it to a journal entry. At minimum you should do it twice a month to keep your books accurate.
Depending on your granularity you will want to add various line items for fees like revenue, refunds, FBA fees, advertising, and more, though you can group certain fees together to save space on less necessary knowledge
Integration Tools: A Partial Solution
Tools like A2X, ConnectBooks, or LinkMyBooks simplify data transfer from Amazon to accounting software but are limited by their pricing structures, which escalate with higher order volumes and additional sales channels. A2X is the most common and super simple to connect, where the other two programs are pricer yet do have some front end profit reporting function Generally, you will be looking at another $20-$80 per month (or more for big sellers and many channels) to have that data sync automated.
Inventory Management: A Necessity For High Functioning Business’s
Manual Spreadsheets
Regardless of your size, understanding your inventory is crucial and making plans to order the correct amount (just enough, but not too much) helps keep you in stock and cash moving. It’s no fun being out of stock, but also equally as annoying having cash tied up in slow moving inventory, and using spreadsheets you can manually forecast this based on past sales and expected future demand, though this takes time
Advanced but Expensive Tools
Inventory management software like SoStocked can help automate forecasting, but usually comes at a significant cost (>$200 per month). It connects directly to your Amazon account and uses historical data making accurate predictions, but these tools often don’t have a comprehensive view into cash flow and financial feasibility of their recommended orders.
Profit Analysis Tools
Using your accounting software will give you the complete overview of your business health with its profit. However, with fees rising, it’s possible to make money on an account yet lose money on individual products.
Having a method to view the profit on individual products is critical to check and ensure their margins are appropriate along with their advertising spend. QuickBooks is not designed for a SKU-profit breakdown, though some tools like WebGility try to import every order into QuickBooks Desktop, but it gets messy as it’s not designed for that much granularity.
Instead, many sellers pay for other tools like SellerBoard, ManageByStats, or others to connect to Amazon and provide an in-depth view of product fees, sales history and more. This is great to get a snapshot of your data in real time, but misses out on the big picture; you aren’t going to add your insurance payments, loan details, hosting fees, and other transactions into the, so the ‘net profit’ they show is excluding many other items
Still, they are helpful to use, and only cost $20-$50 per month depending on your size
Introducing SellAnalytix: A Holistic Solution
All-in-One Efficiency
SellAnalytix emerges as a game-changer, addressing the shortcomings of the typical tech stack used by seven-figure Amazon sellers. It offers an integrated solution combining accounting, profit analysis, and seamless integration.
Comprehensive Profit Analysis
Unlike other tools, SellAnalytix provides detailed insights into product-level profitability, ensuring sellers have a clear understanding of the financial health of each SKU.
Advanced Accounting
Featuring a complete double ledger accounting system, sellers no longer need to pay for QuickBooks or Xero and can do it all here. With all the necessary features, but no more, this program is designed to be understood by sellers, and not require a degree in accounting to decipher.
Streamlined Integration
SellAnalytix excels in integrating data from multiple e-commerce platforms, providing a unified view of a seller’s financial status across various channels.
Cost-Effective and Time-Saving
By consolidating multiple functions into one platform, SellAnalytix not only reduces the cost associated with using several disparate tools but also saves considerable time for sellers.
Conclusion
For seven-figure Amazon sellers, navigating the myriad of financial tools can be daunting and inefficient. The typical tech stack, while functional, has several limitations in terms of cost, data granularity, and platform coverage. SellAnalytix offers a comprehensive, integrated solution that addresses these shortcomings, empowering sellers with accurate profit analysis and streamlined accounting processes, all in one platform.
Deciding on the right financial tech stack is critical to make a strong base for making informed company-wide decisions
If you are doing less than 100k per year in revenue, getting by on spreadsheets and a profit analysis tool like SellerBoard can be enough, but once past that should get a double ledger system.