Bookkeeping for Amazon & TikTok Shop Sellers: Know Your Real Profit

Short answer: The money that lands in your bank from Amazon, TikTok Shop or Shopify isn't your sales and it isn't your profit. Each payout is your gross sales minus platform fees, refunds, ad spend, shipping and other charges. Good e-commerce bookkeeping breaks each payout back into those parts and adds your cost of goods sold (COGS), so you can see your real profit.

Why bank deposits are misleading

If you record only deposits, you'll get two numbers wrong:

1. Sales will look too low, because fees were taken out before you were paid.
2. Expenses will be missing, because those fees never appear as separate bank charges.

That makes your profit and loss statement unreliable and can cause problems at tax time.

What to track for every payout

• Gross sales
• Platform and referral fees
• Fulfillment and shipping fees
• Advertising charges
• Refunds, returns and chargebacks
• Reserves or holds the platform keeps back
• The net amount deposited

Each marketplace offers settlement or payout reports that show this breakdown. Matching those reports to your bank deposits is called payout reconciliation.

Don't skip cost of goods sold

Your biggest expense is usually inventory. To calculate profit correctly, you need to know what the products you sold cost you, not just what you bought this month. That means tracking:

• Inventory purchases, including freight and import costs
• Units sold
• Inventory still on hand

Without COGS, a month when you bought a lot of stock will look like a loss, and a month when you sold from old stock will look too profitable.

Who collects sales tax?

Under Texas law, marketplace providers such as Amazon and TikTok Shop generally collect and remit sales tax on sales made through their platforms. Sales through your own website (for example, a Shopify store) may still be your responsibility, depending on where your customers are. If you sell in Texas, you may need a Texas sales tax permit. Review your setup with a professional.

A monthly routine that works

1. Download payout reports from each platform.
2. Reconcile every payout to your bank.
3. Record fees, refunds and ads by category.
4. Update inventory and COGS.
5. Review your profit by sales channel.

How Northlane Financials helps

We do this every month for online sellers and send you a profit report by channel. Learn more about our e-commerce bookkeeping service.