Seller Ledger, Author at Seller Ledger

eBay fees too high? It depends.

Seller Ledger on November 18, 2024

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.

Want an easy way to see your fees per online sales channel? Remember to check out our recently added Channel Breakdown report.

Not yet a Seller Ledger user? We offer a 30-day free trial, co credit card required.

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eBay 1099-Ks are coming…electronically

Seller Ledger on November 11, 2024

Yesterday, we received the following email stating that eBay’s 1099-Ks are coming electronically for 2024.

Understandable confusion – but don’t worry

First, this email was received for a seller account that only sold personal items this year. This might raise concerns that personal sales may get reported as “taxable.” But that’s not the case – it just means you will want to properly account for them in your personal tax return, which we explain in this post about the relationship between personal sales and 1099-Ks.

Second, the seller account that received this email also sold less than $600 for all of 2024. This raises the question about the sales threshold for receiving 1099-Ks. eBay links to an article that discusses reportable criteria, so clearly not every seller will receive a 1099-K. As of the last IRS announcement, the threshold for 2024 is expected to be lowered to $5,000 in gross receipts. But, as we’ve seen before, this could still change.

As we’ve mentioned before in prior blog posts, 1099-Ks are “informational” documents designed to help identify eCommerce sales across platforms. So long as you are correctly tracking and reporting actual business profits, you should have nothing to worry about.

Get your business finances organized.

Need help making sure you only pay taxes on your net business profit? With automated bookkeeping through Seller Ledger, we pull in your detailed sales and expense information to make this as simple as possible. We also offer a 30-day free trial, no credit card required.

Try it free

Make sure to deduct your Etsy Ad fees

Seller Ledger on November 7, 2024

We recently received an interesting question from one of our newer Etsy sellers. Where in Seller Ledger does one find Etsy ad fees? While we import 13 different Etsy fees, including one for “Offsite ads”, we do not show any for “Etsy Ads”.

What are Etsy Ads?

Like Offsite Ads, which promote your Etsy listings on platforms like Google, Facebook, Instagram and more, Etsy Ads allow you to also promote your listings, but on Etsy itself. You pay each time a user clicks on an ad and Etsy charges you.

So what’s the problem?

While these onsite Etsy Ads sound quite similar to “Offsite Ads”, the costs and payments of these ad fees are NOT included in any endpoints from Etsy’s API (application programming interface.) As a reminder, the API is what allows third party software platforms like Seller Ledger to access information from your Etsy store. We have confirmed with Etsy’s developer program that these fees are not included, though they did take our request to add them in the future.

Because these Etsy Ad fees/costs are not made available in the API, financial programs like Seller Ledger can’t automate as much of the accounting/bookkeeping as we’d like. But, we do want to remind sellers that these Etsy Ad fees are still valid business costs, and therefore legitimate deductions.

How should I track/deduct Etsy Ad fees?

Fortunately, Etsy does make this information available to you through their website. All you need to do in Seller Ledger is to go under the Expenses tab, click the “Add Expense” button and record the expenses. At minimum, you should do this at the end of the year to record all of your ad fees, but feel free to also make entries as often as you like (e.g. monthly, quarterly, etc.)

Etsy made clear in their response to us that they, like us, prioritize features based on customer feedback, so if this is something you’d like to see added to their API, please let them know at [email protected] .

See your sales and expenses by channel with new Seller Ledger report

Seller Ledger on November 2, 2024

To help our multi-channel sellers compare metrics across sales channels, we have just released (in open beta,) a new “Channel Breakdown” report. Now you can see your sales and expenses by channel.

Sales and expense information that we import directly from each channel will show up in the proper categories. And don’t forget, we allow you to customize how all of those transactions get categorized, by channel.

In the future, we hope to make it easier to add additional channel cost information from other sources, like credit cards.

Automate your Poshmark accounting with updated Seller Ledger integration

Seller Ledger on October 18, 2024

When we first launched our Poshmark integration, the only option was to download sales history reports in CSV file format and upload them to Seller Ledger. While this provides an accurate view of your Poshmark financial performance, it required ongoing effort on your part to keep your finances up to date.

Fortunately, now users have a more automated choice. By using the Chrome browser and Seller Ledger’s custom-built Browser Extension, Poshmark sellers can now see their sales history import into Seller Ledger on a daily basis. Not only that, but we also now import your payout information (which is not included in the downloadable Sales Reports from Poshmark.)

To learn more about how to automate your Poshmark accounting, view this support article.

If you’re new to Seller Ledger and want to make your Poshmark accounting much easier, try it free for 30 days, no credit card required.

See your eCommerce sales by state

Seller Ledger on August 19, 2024

In response to a number of customer requests, we recently rolled out a new report called Sales by State. You can find it under the “Reports” tab:

This reports shows you sales by state, broken into Non-taxable Sales (e.g. any sales collected and remitted by a marketplace facilitator like eBay, Etsy, Amazon, etc, as well as any shipping collected in states where shipping is not tabale) and Taxable Sales (e.g. sales on store platforms or other channels where sales tax need to be collected. We also show any sales tax that has been collected by not remitted.

You also can click to sort by any of the columns provided.

At the time of this post, the feature is currently in an open “beta” period. Please let us know of any feedback you have at [email protected].

Thanks!

A more flexible dashboard

Seller Ledger on August 9, 2024

The “At a glance” section of the Seller Ledger dashboard hasn’t received a lot attention since we first launched. Based on feedback from customers, we recently added the ability to choose from a few time periods that you can view.

Have you ever logged into Seller Ledger and seen your data at the top of the screen changed to all zeros? Well, that’s because the default view was “This month”, which, on the first of a month, often reverts to zero because we haven’t imported any new transactions yet. It’s even more alarming when you get to January first.

Well, we’ve made a couple of changes to help with that.

First, we now offer a few different time periods to choose from:

As you can see, instead of always being “Month to date”, you can now choose “Prior 30 days” and “Year to date”.

Second, we now default to “Prior 30 days” so that this section is likely to always have data displayed.

While a small change, we hope it helps avoid some confusion and adds value to the customer experience.

Add new accounts more easily

Seller Ledger on June 27, 2024

In our continued efforts to make Seller Ledger easier to use, we rolled out some improvements to how accounts are linked and displayed on the Dashboard page

The first thing you might notice is that, if you have multiple accounts from the same sales channel or bank, they are now grouped more obviously together:

But the biggest change is the addition of the new “plus” icon within each channel/bank header:

Clicking this icon allows you to quickly add another account from that same bank or sales channel.

To add a new sales channel, or accounts from a new bank or credit card, you would still click the button below your accounts, now more accurately labeled “Add Channels & Banks”

As always, we welcome feedback on our product changes, so feel free to email us at [email protected]

Import Whatnot sales history into Seller Ledger

Seller Ledger on June 17, 2024

We are excited to announce that Whatnot sellers can now import their “ledger” details into Seller Ledger.

While Whatnot does not yet provide a public API (which means we can’t automatically grab your transaction history like we can with Amazon, eBay, Etsy and Shopify,) they did release the ability to export ledger details in CSV format earlier this spring. We can import these files directly into Seller Ledger, like we do for both Poshmark and Mercari.

Step 1: Download your Whatnot sales history

Go to Seller Hub, under Financials, and then under Ledger – you should see an option to export your history in a CSV formatted file. Go ahead and download and save that file.

Step 2: Add a Whatnot account in Seller Ledger

When you click the “Add account” button under Connected Accounts on your Seller Ledger dashboard, you will now see an option to “Connect to Whatnot.”

After clicking the Whatnot button, enter a name for your new account and click “Create Account”

Step 3: Upload your Whatnot ledger file

Once you’ve created your new Whatnot account, you’ll be taken directly into that new account, to a screen that allows you to upload your Whatnot ledger file. Choose the file you downloaded from Whatnot 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 Whatnot file is.

Step 4: Categorize your Whatnot payouts properly

Whatnot currently pays sellers via Stripe (often to a bank account) and PayPal. If you link your bank or PayPal account to Seller Ledger, you’ll want to make sure that your payouts from Whatnot don’t get double-counted. So, when you see your Whatnot payouts hit your bank or PayPal account, make sure to categorize them as “Transfer: My Whatnot Sales” – or whatever you named your Whatnot account.

Step 5: Remember to regularly update your Whatnot 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.

New to Seller Ledger?

Try it free

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.

Cheers,

The Seller Ledger Team

Add inventory costs from receipts

Seller Ledger on June 13, 2024

In our continuing efforts to make eCommerce accounting easier, today we announce a big step forward for inventory tracking.

In short, you can now take a picture of your receipt and upload it to Seller Ledger. We use the latest “artificial intelligence” technology to extract item cost information from the image and pre-populate the inventory purchase form.

To show you exactly what’s possible, here is a picture, taken from an iPhone, of a receipt from a trip to our local Marshall’s store:

Within Seller Ledger, if this purchases came in from a linked bank or credit card, make sure to categorize it as “inventory” and then go to Inventory -> Purchases and click “Add details.” If this was a cash purchase, or from a source not connected to Seller Ledger, just go to this same screen and click the “Add Inventory” button.

You will see a new option at the bottom of the screen to “Upload image or pdf”:

Click the “Upload receipt” button and choose the picture that you took of your receipt (or try the example we’ve posted above.) Seller Ledger will then process the image and extract as much information as possible. In the above example, you will end up with the following:

And scroll down to see the remaining information that we were able to extract from the image…

Notice that we found 4 unique items with descriptions and the correct per-item costs. Not only that, but we were able to recognize the $6.32 in sales tax. And given our recent feature that allocates extra cost of goods amounts, we automatically allocated that $6.32 across the 4 items.

The one piece of work left for you to complete is to either identify or create the unique SKU for each item, which will then allow Seller Ledger to match to sold items, thereby updating inventory and cost of goods amounts automatically when it sells.

To help us improve this feature over time, it helps to get as may customers trying it as possible. Please give it a try and let us know how we can make it better.