How do I value year end inventory as Amazon FBA Seller

[jmk909er]

Greetings, I am an Amazon FBA (Fulfilled by Amazon) seller and just found an accountant that is very knowledgeable and helpful to help me with the accounting end that I know nothing about.

Hopefully there are people on this forum that are familiar with Amazon sellers because I think it requires some unique accounting expertise.

My accountant was asking me how do value my year end inventory at Amazon?
Amazon has the pricing that I set for selling but not what I paid for it, so how do you place a value on the year end inventory?

(Side note: as an Amazon FBA seller I send everything in to Amazon and they store it in there warehouse until it is sold and Amazon is responsible for packing and shipping to the customer.)

Thanks, Joe

 

[kirby]

If you have filed a tax return for 2012 or before for your business, you would have elected a method on the return so tell the accountant to look at that. If no return has been filed (as this is the first year of the business) then tell the accountant to suggest a method and explain to you why it is the best choice. Things work best when you (business owner) make the strategy decisions and the acct suggests the acctg decisions. If acct cannot do so , get another acct who can.

 

[jmk909er]

If you have filed a tax return for 2012 or before for your business, you would have elected a method on the return so tell the accountant to look at that. If no return has been filed (as this is the first year of the business) then tell the accountant to suggest a method and explain to you why it is the best choice. Things work best when you (business owner) make the strategy decisions and the acct suggests the acctg decisions. If acct cannot do so , get another acct who can.

My accountant would like me to track what I actually paid for the items and I could do that but it is very time consuming because of the number of different items and the amount of turnover. Are you familiar with Amazon FBA seller type of business model? What are other methods of calculating year end inventory?

As a general rule of thumb I buy items that I can sell for 3X what I paid for it.

Thanks, Joe

 

[accounting nerd]

Does your supplier ship the products directly to the Amazon warehouse or do they get shipped to you first and you then ship them to the warehouse?

 

[jmk909er]

Does your supplier ship the products directly to the Amazon warehouse or do they get shipped to you first and you then ship them to the warehouse?

No I do retail arbitrage going out and buying retail markdown and closeouts, then ship and list as a FBA seller

I can make up my own seller SKU and i put my cost in it to track what my year end inventory value is but it would be nice if Amazon provided a field to input this so that a easy downloadable report would give us the year end value. I have to parse out the data from the SKU in Excel.