Depop sellers can now import their sale history directly into Seller Ledger, further automating their accounting and tax preparation.
Like with Whatnot and Mercari, who don’t yet offer public APIs, you can download a sales report from Depop and upload it to Seller Ledger. Just follow these steps:
When you click the “Add account” button under Connected Accounts on your Seller Ledger dashboard, you will now see a button for Depop.
After clicking the Depop button, enter a name for your new account and click “Create Account”
3. Upload your Depop sales file
Once you’ve created your new Depop account, you’ll be taken directly into that new account, to a screen that allows you to upload your Depop sales file.
Choose the file you downloaded from Depop and click “Save.” Your file will be uploaded and your transaction history will be imported into Seller Ledger.
Trial users
If you are still in your trial period, Seller Ledger will only import the last 90 days of transaction history, regardless of how large your Depop file is.
4. Categorize your Depop payouts properly
Depop doesn’t provide payout information in their sales files, so we don not have a way to automatically match the to deposits at your bank. If you link your bank account to Seller Ledger, you’ll want to make sure that your payouts from Depop don’t get double-counted. So, when you see your Depop payouts hit your bank account, make sure to categorize them as “Transfer: My Depop Sales” – or whatever you named your Depop account.
5. Remember to regularly update your Depop sales in Seller Ledger
Because we can’t pull in your new sales and expense information on a dailybasis, you’ll want to make sure to come back every once in a while to upload your latest sales history. How often you choose to do so is your choice. We show the date of the most recent imported transaction on the Seller Ledger dashboard to help remind you.
Lastly, if you make a mistake with any of your uploaded information, it’s not a problem. The “Import History” tab shows you all of the files you’ve uploaded over time, with the ability to simply delete one or more and try again.
We know there are other channels out there that provide CSV files of transaction history. If you would like to see other channels supported, please request a new platform or email us at [email protected] with your interest and, if you’d like to be particularly helpful, a sample of a transaction history file from that channel.
One of the most interesting things that happens during tax season is that people tend to start paying much closer attention to their numbers than during the rest of the year. There are LOTS of cases where different sources provide different numbers.
But perhaps the most frustrating cases come when a single company reports different numbers in different places. We recently shared this example from Etsy. Even eBay, one of the oldest eCommerce marketplaces, is not immune.
In this article, we’re going to explain by eBay’s 1099-K doesn’t match the financial statements they provide to sellers.
Deeper dive into seller financial statements
If you pull down any statement from your eBay account (which eBay explains how to access here), at the top under the Transaction summary section, you’ll see a total for all orders and refunds for the period.
But, notice the language in parentheses. In both cases, they are adjusting for fees. If you scroll down in your statement, you come to the Orders section:
You’ll see the sale price of the item sold, in this case $19.99, and it’s shown as a positive number (and in green.) Below it, you will see the final value fees amount, in this case $2.67, and it’s shown as a negative number.
eBay then adds those two numbers together to get what they call a “Net Total” for this sale. That amount represents the change in your eBay seller account balance as a result of this order. In this case, eBay is going to add $17.32 to your account.
And if you scroll to the bottom of the Orders section, you’ll see a Total Orders amount that equals the sum of all of these Net Total amounts from all of your orders. And that Total Orders amount will match exactly the Orders total shown at the very top of the statement.
You will find the same thing to be true of the refunds.
This all makes sense…until you get to the form 1099-K.
“does not include any adjustments, for example, credits, discounts, fees, refunds, or any other adjustable amounts.”
That means your 1099-K is never going to match the totals in your financial statements.
But that’s ok. A good way to think about your monthly financial statements from eBay is the same way you would look at the statements you get from your bank. They simply explain everything that has caused a change in balance for that account. They do not give you perfect information for reporting and filing taxes. For example, your bank account will show all of your eBay payouts as deposits. But adding up those payouts up won’t match your 1099-K or give you enough information to file. There’s too much detail missing.
So how do I match my eBay 1099-K?
From that same article, eBay points customers to another part of the website to better verify 1099-k balances. They have created a “1099-K detailed report” that you can download.
As we’ve written before, the 1099-K is an “informational” document, but is not meant to be the definitive source of financial information for your tax return. It provides no information about refunds, fees, cost of goods sold or operating expenses. It is up to you, the seller, to make sure that you are filing an accurate tax return that ensures you are only paying tax on your profits.
While biased, we think bookkeeping software like Seller Ledger, that tracks all of your transactions at the detailed level, makes it much easier to see how all of these numbers add up.
“While reviewing our tax and sales information in the Etsy dashboard, I noticed a significant discrepancy between Etsy’s reported numbers and Seller Ledger’s figures regarding total sales and income.”
Thus began a recent email exchange with a customer. And because we take accuracy rather seriously here at Seller Ledger, we dug right in immediately. Fortunately, the customer attached a screenshot of what Etsy was showing (numbers hidden for privacy.)
For those want to follow along, you can find this same information by going to:
Etsy > Finances > Legal & Tax Info > Select Tax Year
How does this compare to Seller Ledger’s data?
In order to compare directly, I pulled up this customer’s account, went to the Profit and Loss report, set the year to 2024, selected view by month, and set the channel filter to “Etsy”. This allowed me to see just the Etsy income and expense by month for the year.
And do you know what? The customer was correct. Etsy was showing different totals that Seller Ledger was. The question became, why? Was Seller Ledger wrong?
It was time to find out.
I copied the top “Income” section of the Seller Ledger profit and loss report into a spreadsheet. I then added a new row for the numbers provided in that Etsy tax screen. Lastly, I calculated the difference between the Etsy number for each month and the Total Income amount.
That’s when I noticed an interesting pattern. The numbers matched precisely in 7 of the 12 months of the year. And in the months where they didn’t match, the difference was EXACTLY the same as the “Refund” amounts shown in Seller Ledger for that month.
So Seller Ledger got the numbers exactly right. But how could the numbers be different?
In short, what is happening is that Etsy’s totals are not being reduced by order refunds. And this is a common occurrence with 1099-Ks across payment platforms, as we’ve previously written about. In fact, you can browse Etsy’s help article on the subject, and find some interesting language:
“Gross sales” may include but are not limited to:
All of your sales
Shipping
Refunds
Card processing fees
Sales tax applied using the sales tax tool
Canceled orders
May include? That doesn’t sound very definitive. But perhaps the most confusing is language around “refunds being included”.
The customer shared that someone from Etsy customer support had stated that refunds were included in the totals. But does that mean they have been reduced by the amount of the refunds? Or are they saying that the original sales (that eventually get refunded) are included in the total, but not the actual refund? In this instance, it was the latter.
After a bit more research, we found that Etsy actually does spell this out in more detail – you just have to find the right support article:
Your gross sales is the total amount your buyers have paid you, for the entire year, without subtracting expenses, such as:
Fees
Refunds
Shipping costs
In general, we have found that platforms, when reporting Gross Sales, include all of the original sales, whether they get refunded or not, and do not subtract out the refunds when they happen.
Lessons learned
For me, there a few interesting learnings here:
No matter how much the IRS and eCommerce platforms try to explain what goes into 1099-K numbers, any time you see different numbers in different places, it causes concern.
Regardless of what you may read or be told about how numbers are calculated, there is simply no substitute for verifying them yourself. Math is your friend if you know how to use it.
The best thing you can do to be prepared for any questions around numbers is to have a detailed accounting or bookkeeping solution that allows you to drill down on any totals to the underlying transactions and their components. This is exactly what Seller Ledger does, and why it took mere moments to figure out what was going on in this case.
I also want to give a shout out to the customer who worked with us on this case (you know who you are:), for being patient and sharing where they got the original source data so that we could share this experience and learning with others.
Tax time is here (in the United States, anyway) and for Shopify businesses in particular, that means a lot of potential complexity. And now that the 1099-K threshold is being lowered to $5,000 per platform, now is a great time to consider ways to simplify Shopify taxes
You can avoid a lot of hassle by investing some time in planning how to manage your business finances. And while tax preparation is one of the last things Shopify store owners tend to focus on (or enjoy,) each filing season can be a painful reminder of the choices we previously made.
6 tips to simplify Shopify tax organization and filing.
1. Use separate bank and credit card accounts
It sounds obvious, but newer and smaller sellers often think they can put this off for the future. But spending the time (and money) to separate commingled personal and business finances is just not worth it. Make sure you have a dedicated business banking account, where all of your eCommerce payouts get deposited. Take out a dedicated business credit card (or use a debit card) and make sure all of your business expenses are paid through it. Doing so makes it a relative breeze to get your transaction history for tax time. You’ll have fewer places to look, fewer statements to track down, and most importantly, get to completely skip “removing” personal transactions.
2. Choose banks and credit cards that have “good” online banking capabilities
When choosing a bank or credit card, do a little research into their online banking capabilities. While most banks have some level of online banking, some banks do a much better job making transaction history available electronically. In particular, small, regional banks and credit unions tend to invest less in their online banking capabilities. This can lead lead to less data being made available, and sometimes at lower quality.
Another way to evaluate online banking capabilities is by looking at how banks handle sign-in and authorization. The best banks now support OAuth, which permits 3rd party application developers to get customer “permission” to access specific data from their bank using special tokens, which avoid the need to request usernames and passwords. In addition, customers can choose to manage and “revoke” permission of these external programs from the bank’s website.
3. Use accounting/bookkeeping software that’s great at accessing electronic data
I mentioned in the prior tip the importance of online banking and access to electronic financial records. The same goes for eCommerce channels. Most large, established channels make their data available through APIs (application programming interfaces,) which allow other software companies to access that data. But not all access is the same.
Some accounting solutions take shortcuts, like only pulling payout information, which is pretty much what you get from banks anyway. But those payouts are missing key details, like item prices, shipping collected, sales tax collected and possibly remitted, and fees paid. Given that different platforms report different totals on 1099-Ks, you’ll want to make sure you have proper transaction details to give you an accurate financial picture.
Others completely ignore things like the actual products sold and that sale’s effect on inventory and cost of goods sold. For example, you may not want to choose a product whose Shopify review reads like this:
Actual accounting software review from a Shopify customer
“This does not pull in sales receipts with product info. So if you track inventory in [name removed to avoid embarrassment], it will not reduce your inventory when you sell an item”
Spend a little time up front, do your homework, read reviews and discussions in different online communities, and make sure your accounting software gets you the eCommerce details you need.
4. Watch out for channel duplication
These days, most successful eCommerce merchants sell across multiple channels. And some platforms, like Shopify, allow you to connect other marketplaces to get a more complete view of your sales. For example, the Shopify Marketplace Connect app allows you to bring in data from Amazon, eBay, Etsy, Walmart and more. But this can lead to challenges in reporting, as the same data gets replicated across different platforms. You’ll want to ensure that you’re never double counting sales or expenses.
Unfortunately, this may lead you to think you can simply connect all of your other marketplaces to Shopify, then pull all of that information from a single source. While this may sound in theory, having worked directly with Shopify’s API, we know that the level of detail you get from the kind of direct integrations outlined in Tip #3 is lost when the data gets to Shopify.
Hopefully, accounting/bookkeeping software knows how to handle this, but you will want to keep an eye on the data.
5. Create (and list) unique SKUs for your inventory
This might be the single biggest thing you can do to avoid headaches at the end of the year (and for many years to come.) Investing the time to create a system of assigning unique SKUs (stock keeping units) for each item you sell will pay off immeasurably down the road. A lot of retailers and eCommerce sellers use a “smart code” approach, similar to what Shopify outlines in this handy tutorial. But whichever method you use, the most important thing is to choose something that is unique to each product/item.
You’ll also want to make sure to use these same SKUs across channels when listing items for sale. Doing so can enable the following (assuming your accounting/bookkeeping system is set up well):
When an item sells, that sales record will reduce your inventory account, helping make sure you avoid stock-outs and accidentally selling product you no longer have.
Having your inventory counts get updated automatically also helps for end of year inventory counts and valuation.
Also, when that item sells, if you have recorded the cost of that information in your accounting/bookkeeping software, it can calculate the cost of goods sold automatically for you, both on that item, and over the course of the year.
In addition to simplifying end-of-year calculations of inventory value and cost of goods sold, this approach can also calculate the gross profit/margin on each sale, giving you better insight into what products drive the most profit for you.
6. If you still need help with sales tax, just pay for a service
While most online marketplaces (eBay, Amazon, Etsy, etc.) must now collect and remit sales tax on behalf of sellers, many online store platforms like Shopify, Woo Commerce and such still leave it up to the merchant to collect sales tax from the buyer and remit (a.k.a. “file”) to the individual states. For sellers in that category, I strongly recommend outsourcing to a paid service like Shopify Tax, TaxJar or another similar service.
Want to try it yourself? You can learn more in this article, but here’s a partial list of what that entails:
Determine in which states you have nexus (physical or economic) so that you know where to collect and file
Register your business in each state where you have nexus
Determine the correct rate to charge based on the item being sold (including any product taxability exemptions, whether shipping is taxable, etc) and the jurisdictions that apply (which can be state, county, city and even special taxing districts.)
Total up all of the sales by each reporting jurisdiction
File accurately in each state, some of whom share similar interfaces, many of whom are specific to just that state. Oh yeah, and the filing frequency differs by state.
As the original head of product for TaxJar (though I left long ago,) I can assure you that trying to manually determine all of the above and comply properly, is incredibly complex and can become a monster drain on your productivity as a business owner. Of all the places to try to save money, this one might be the worst idea to do so:)
In summary
As you can tell from this article, there is a strong bias in favor of thinking through and structuring your approach to business finances up-front, in the hopes of automatic future workflows. For any business owner, it’s better to spend the bulk of your time where you add the most value, and minimize time spent on drudgery. For Shopify and other eCommerce merchants, that means getting back to sourcing, listing and fulfilling. Hopefully, some of these tips can help simplify Shopify taxes going forward, with the added bonus of informing you how to run your business more profitably.
If you are a US-based eCommerce merchant who files a Schedule-C with your tax return, you may wish to consider Seller Ledger, an accounting/bookkeeping platforms that does a lot of what’s described above (particularly tips 3 & 4.) We offer a 30-day free trial, no credit card required. We can even help pull in all of your 2024 transaction data. And we have plans to expand to other business types as well as internationally.
In an effort to make sure you write off all legitimate business deductions for your eCommerce business, we though it would be helpful to go a bit deeper on the IRS rules around “Business use of your car” so that you cab maximize mileage deductions.
Mileage deductions are a simple way to reduce your tax burden, and many driving trips for resellers and online store owners qualify, but it’s so hard to remember to enter them all!
The IRS recommends tracking mileage driven for your business by recording every trip at the time that you take it. You can include your trips to all of these types of destinations that might be relevant for you:
Inventory sourcing trips
Office supply runs
Trips to the Post Office, FedEx or UPS to ship your packages
Trips to reseller meet ups or conferences
Driving to any in-person training sessions or educational opportunities related to your business
There are two different methods to calculate your mileage deduction, which we explain in more detail below, but either method requires you to track how many miles you drove for business purposes, so you’ll want to be as accurate as possible in capturing these.
But what if you’re already three quarters of the way through the year and you haven’t been tracking all of your miles? Read on for how we’ve seen some sellers capture legitimate business trips they took, even if they might not have been recorded in the moment.
Here are 3 ways we’ve seen sellers maximize their mileage deductions.
Disclaimer
Before proceeding it’s important to mention that we at Seller Ledger are not tax experts and are not trying to provide tax advice. It is critical that you as a reader make your own decisions on how to handle your specific tax situation, which may include hiring a professional.
1. Use a mileage tracking app
Some sellers use mileage tracking apps, such as MileIQ or Everlance, that can help you to keep track of how many miles you’re driving for business purposes versus personal. On the plus side, these apps can save you a lot of time versus manually entering each expense. On the minus side, they can be an additional cost and they don’t help for the time period you weren’t tracking your miles.
2. Mine your other financial records
Wouldn’t it be great if someone could give you a record of each of your driving trips throughout the year even though you forgot to record them at the time?
If you’re using Seller Ledger’s automated bookkeeping software to import your business bank and credit card expenses and categorize those expenses, it can get you pretty close. Chances are, you’ve got a record in Seller Ledger of an expense for each of those inventory sourcing trips. Simply go to the Expenses tab, select the “Cost of Goods Sold” category and you’ll have a list of each vendor you bought from and the date of the transaction. We’ve seen sellers create a Mileage Deduction in Seller Ledger for each of those trips where they know they drove to the vendor.
We’ve seen sellers use the same tactic for trips to the Post Office, FedEx or UPS for shipping trips. In your Expense tab, select Category “Shipping Costs” and you’ll see a list of your transactions. Sellers obviously can’t deduct mileage for instances where they purchased a shipping label from eBay or Amazon online to ship a package, and they can’t deduct mileage if the shipper picked product up from their home or office, but each seller knows how their business operates and where legitimate driving trips are included, this is a tactic that has helped other sellers to identify them.
This method works for Office supply runs, Education sessions, or any other vendor/expense where it was needed to drive to for business purposes.
3. Use Google Maps
The Simple Part: We’ve talked with sellers who didn’t know the distance between two locations they traveled to earlier in the year. They simply entered their starting point and the destination in Google Maps, and there they had it – they knew the number of miles traveled.
The More Sophisticated Part: One seller even taught us about the timeline in Google Maps. It’s possible to see your timeline in Google Maps both in the mobile app and on the website. All the places you have searched for throughout your history will come up – you can click the “see more” button to see more locations, revealing the potential destinations from your past. The seller was using this tool to research past trips that might qualify as business trips they could deduct.
They shared another approach in Google Maps which is to click on your profile in the upper right of the mobile app and turn on your location history. With this feature enabled you can see the driving trips that you actually took whether they were today, a week ago, a month ago, etc. and it can include your location history that you actually travelled to. This was another gold mine for the seller in identifying trips they took for business purposes.
Standard Mileage Deduction Rate
In 2025, the current IRS mileage deduction rate is now $0.70 per mile. To use the standard mileage rate method, you can multiply this amount by the number of miles driven for each work trip to calculate your mileage deductions. At the end of the year, the sum of all those mileage deductions can be subtracted from your taxable income so that you pay taxes on a lower amount.
Actual Expense Method
Alternatively, there is another method to deduct driving costs by writing off a percentage of your vehicle costs, the actual expense method. This method takes into account spending on things like car insurance, and vehicle repairs among other vehicle-related costs. To use this method, calculate the number of total miles driven for work during the year. Then note the total miles driven by the vehicle during the year. The number of miles driven for work divided by the total miles is the deduction percentage.
For example, if you drove 2,000 miles for work out of a total of 10,000 miles in a year, then 2,000/10,000 = 20%. Once you know this percentage, you will apply it to the total money spent on the vehicle during the year. If you spent $5,000 on the vehicle that year, then 20% * $5,000 would be $1,000, so you could deduct $1,000 for the year.
Unfortunately, you cannot use both methods to deduct vehicle-related expenses, you must choose one or the other. Most folks choose the simple mileage deduction rate, logging their miles as they go and multiplying by the IRS rate to calculate their total deduction for the year.
Of course every seller’s situation will be unique and we cannot provide tax advice for your unique situation. An accountant can help you to identify and maximize mileage deductions. In addition, here are a couple links from the IRS that might be helpful to you on this topic:
Lastly, if you’re an online seller looking for an easy way to track your business expenses going forward, we recommend giving Seller Ledger a try. Seller Ledger offers a 30 day free trial, with no credit card required, and lots of smart features that learn and remember your vendors, so the more you use it, the faster and easier it gets over time.
Seller Ledger was designed to provide the simplest, most automated bookkeeping solution for ecommerce sellers, at an affordable cost. If you sell on eBay, Etsy, Amazon, Walmart, Shopify, Poshmark, Mercari, Whatnot and more, Seller Ledger can automate your bookkeeping and make tax time easy.
Good news for small business owners. The IRS has increased the standard mileage rate for business use of your car from 67 cents per mile in 2024 to 70 cents per mile in 2025.
Don’t miss out on your deductions. Just tell Seller Ledger the date of the trip, a description of its purpose, and the distance traveled – we’ll calculate the rest.
Now, just in time for the 2024 tax filing season, we’ve also made it super simple to get your data back out of Seller Ledger. Whether you want to use it as a way to back up your data, do additional analysis, or share it with an accountant or bookkeeper, you now have a place to do just that. Your data belongs to you and we believe you should be able to take it with you for whatever purpose you choose.
Simply go under Settings and choose the new “Exports” sub-tab. You will see a screen like this:
Click the “Create Export” button to bring up a screen that allows you to choose the date range and which accounts to include in the exported CSV file. Notice that you can also export any manually entered transactions, including mileage entries.
Choose the accounts/types of transactions you’d like to export and click “Save.” Seller Ledger will begin generating a CSV file containing all of the transactions that you selected over the date range you chose. When it’s ready, you’ll see a button to “Download” that file.
That’s it. You now have your data in a comma separated file that can be used in any manner you wish.
As always, we welcome feedback on how to make features better, so please email us at [email protected] with any suggestions for this functionality.
No reason not to try
If you’ve been hesitant to try online accounting software for your eCommerce business, this is one more reason to give it a shot. Seller Ledger will let you pull in (and now export) 90 days of transaction history, completely free and let you play around with the data for another 30 days before ever asking you for a credit card. See for yourself.
Seller Ledger is pleased to announce the launch of our direct integration with Walmart Marketplace, allowing us to provide automated accounting for Walmart sellers.
Like our other automated connections, Seller Ledger will import your sales, commissions and payouts each night, automatically categorize them for tax purposes, and match payouts to your linked bank account.
Note: where several other marketplaces allow us to get a year’s worth of transaction history or more, Walmart only offers 180 days of sales and commission history. So it’s a good idea not to wait too long into a tax year to connect your account.
If you’d like to give selling on Walmart a try, you can sign up here. As you add more channels, feel confident knowing that Seller Ledger will organize your finances as you do.
New to Seller Ledger?
If you are a Walmart seller who’s looking to automate your accounting, you’ve come to the right place. Seller Ledger offers a 30-day free trial, no credit card required.
As a reminder, payment platforms must report “gross amount of aggregate payments” in excess of that threshold. If you sold more than $5,000 using any payment platform, you should expect to receive a 1099-K from said platform.
The IRS further explained that the threshold for 2025 will drop to $2,500, before finally reaching $600 on 2026.
Get your 2024 eCommerce business finances in order
It’s not too late to get your 2024 books in order. Seller Ledger can import your sales and expense history from top eCommerce platforms like eBay, Amazon, Etsy, Walmart, Shopify, Poshmark, Mercari and Whatnot, plus more than 12,000 banks and credit cards. And there’s a good chance we can help you get data back to Jan 1.
One of the most common complaints we see among small eCommerce sellers is that eBay fees are too high. As are fees at Amazon, Etsy, Poshmark and other eCommerce marketplaces. This becomes especially common whenever new fee increases are announced.
While price increases often produce an emotional response (we are only human, after all – at least until AI starts writing these blog posts,) we thought it might be helpful to provide some context on marketplace fees and how you can evaluate them rationally (and analytically.)
What do marketplace fees get you?
To start, it might help to remember some of what you get from your online marketplace seller fees. For the sake of this article, we’ll use the example of selling on eBay versus selling on your own website.
1. A full-stack eCommerce platform on which to sell
What do I mean by “full stack”? Well, I mean everything that you would need to sign up for, configure and pay for yourself to start selling online through your own web storefront. For example, if you want to set up your own eCommerce storefront, you’d need to arrange (and pay for) the following:
A domain name. It’s the equivalent of a street address on the internet.
A hosting account which can handle the internet requests to visit and purchase from your online storefront. Oh, and you will likely want it to be secure, so you’ll want an SSL (secure socket layer) certificate.
Software to run your storefront. Your options here run anywhere from coding it yourself to using existing platforms like Woo Commerce or Shopify, which run from free to sizable monthly subscriptions.
A payment service, like Stripe or PayPal, to let you accept payments from your customers.
Online marketplaces provide all of the above for you. In additional to thinking about the cost savings with each item above, it might also help to think about the time savings of all the things you don’t have to spend figuring out, setting up, and, especially, fixing when they break. There is a very high probability that the large marketplaces have more reliable systems than what you might cobble together.
2. Marketing
This is the big one, and it’s not even close. The #1 thing you get from listing items for sale on a marketplace is traffic. Finding customers is one of the hardest things to do in business, let alone in an eCommerce business. Online marketplaces have done the heavy lifting to build large brands with huge numbers of customers who visit them every day. You benefit from that, though you do need to compete for attention among all other sellers on a marketplace.
To better understand why we focus on “marketing” so much, just imagine what you would try to do if you launched your own website. Let’s say you have a brand new eCommerce website, it’s live, it’s beautiful, it works perfectly and has amazing, unique, incredibly valuable items for sale at extremely reasonable prices.
How do you get people to visit your store?
If you google “how to drive traffic to your ecommerce website”, you will find a TON of content offering all kinds of advice (as well as some “experts” willing to help you, for a fee.) And you can compare that to what Shopify and Wix suggest. But let’s discuss a few of the common techniques you’ll likely find.
Word of mouth
Likely the very first thing to try is to reach out to your entire network of friends, family and professional colleagues. Ask them for help, ask them for advice, and of course, ask them to tell everyone they know about your amazing new web storefront.
Search engine optimization
In the brick and mortar world, you can choose a location with good foot traffic, though the rents will likely be higher. On the internet, there really isn’t a lot of foot traffic. The closest equivalent is search traffic, so you’ll want to make sure your website is optimized for key search terms. Of course, you’ll need to do this better than your competitors in order to get a high enough ranking. And some of those competitors are the very same online marketplaces, who’ve spent years developing expertise and credibility so that they can drive traffic to their customers’ listings.
Paid advertising
In the brick and mortar world, we used to be able to advertise in the Yellow Pages, but that’s been replaced by the online world. You can advertise on search engines like Google, as well as social media sites like Facebook and Instagram. You could sponsor podcasts from influencers who talk about products like the ones you sell. There are a lot of options out there that can help you reach your target customer, but it’s critical that you test and measure your ad campaigns on each of them, to be able to know whether you are making enough money to justify the continued investment.
eMail marketing
Even though it’s been around for a long time, email continues to be a very effective tool for communicating with customers. But in order for this to work, you need to get people to give your their email address, which requires a whole other step of finding prospective customers and giving them enough of a reason to give you their email address. This leads us to the next concept.
Content marketing
One of the most common techniques you’ll see to help drive traffic to your website is a more indirect method that is sometimes called “content” marketing. This means creating a bunch of content (or paying someone else to do it,) that is related to what you’re selling, but different enough that it can attract people who are not explicitly seeking out a specific item. Writing blog posts, sending newsletters, creating videos or reels on YouTube, Instagram and Tiktok, these are all examples of content marketing.
Social media
Perhaps the fastest growing technique for acquiring customers is to build up a presence on social media channels like Instagram, TikTok, Facebook, SnapChat, etc. Social media platforms make it much easier for you to build lightweight relationships with “followers” and “connections.” But you still have the challenge of creating interesting enough content to gain those followers. That said, because this is a much newer domain and is rapidly evolving, there may be more opportunity to do something new and unique.
Other ideas
There is no shortage of marketing ideas that you can try for your website. For example, you could create an affiliate program to get influencers to promote your store. Or roll out a customer loyalty program to get your happiest customers to spread the word. When you’re an entrepreneur, everything is worth a try:)
How do I compare the costs of marketplaces vs doing it myself?
While there is no “easy” answer to this, as everyone’s business is different, we have tried to pull together some resources to help you get a better sense of where your costs should fall. So if you are thinking that eBay’s fees are too high, compare that to some of the statistics below.
The CMO Survey from 2021 states that “B2C Product companies spent 18.4% of their revenue on marketing in 2021.”
This blog post from Boldist suggests “The Small Business Association recommends 7-8% of revenue should be spent on marketing, but what we see, in reality, is that ecommerce companies will spend up to 30% of their revenue on Customer Acquisition Costs.”
And if you have time to dig through a LOT of great detail, check out Marketing Sherpa’s 2015 eCommerce Benchmark Study. Notice that most respondents talked about how their customer acquisition costs are expected to go up over time.
Final Thoughts
Every small business owner needs to decide for himself/herself how best to spend their money. But we are big fans of making informed, data driven decisions to help grow your business. Hopefully this article helps provide some context for evaluating the true cost of online marketplace fees and whether your money would be better spent elsewhere.
