Where the money actually goes: one Amazon seller's year, from LLC to 1099-K
Nobody starts an Amazon business by selling something. You start by spending.
Before your first unit ever reaches a customer, you’ve paid a state to register your company, paid for a sales certificate, paid for a domain, hosting, and a website, paid Amazon $40 a month for the privilege of a seller account, and maybe paid a virtual assistant to find you a product worth selling. Some of it went on a credit card, which added its own percentage on top. That’s eight or nine expense lines and you don’t own a single unit of inventory yet.
Then the real bookkeeping starts.
You order 500 units from a supplier and pay freight to a prep center. The prep center opens the boxes and finds one crushed — 40 units look unsellable. You send the supplier photos. The supplier agrees to credit you for 10 and insists the other 30 are fine. The prep center disagrees, disposes of the 30, and charges you a disposal fee. Now they prep the remaining units at a dollar each, charge you per box to repack, and ship the carton to Amazon on a shipping label you bought — charged straight to your credit card.
Amazon receives the carton and reports the box damaged: 10 more units gone, plus a fee to dispose of them. 450 units go up for sale.
From here, Amazon meters everything: daily storage, a fee to show your product, a fee every time it ships one. It collects sales tax from your customers and pays it to your state directly — money that appears in your reports but never touches your bank account. It pays you every two weeks, not per order, after subtracting every fee — and if your balance can’t cover a fee, it charges your credit card instead.
Then 50 of your units simply vanish in Amazon’s warehouses. Amazon runs its own math and reimburses you for 15. You hire a recovery company to argue about the other 35; Amazon concedes 30, and the recovery company keeps half of what it won you. Returned units come back sellable, or Amazon asks you to ship them somewhere — or pay to dispose of them, again.
At year end, Amazon sends a 1099-K showing gross sales — before refunds, before fees, with sales tax included. The IRS has a copy. Your books had better explain the difference. So you pay an accountant to build a P&L that ties to the 1099-K, then a tax consultant to turn it into a Schedule C. Then you pay the state’s renewal fee and start again.
Count it up: that one ordinary year touched inventory, freight, prep fees, disposal fees, supplier credits, damaged-goods write-offs, storage fees, referral fees, fulfillment fees, lost-inventory reimbursements, recovery-service fees, sales tax you never held, bi-weekly settlements, chargebacks to your credit card, and a 1099-K. A spreadsheet can hold maybe half of that before it quietly starts lying to you.
Where SellerTally fits
This is exactly the year SellerTally was built for. Every event above has a place in its books the moment it happens: real double-entry accounting, a live inventory count that survives damage, disposal, and reimbursement, a 1099-K reconciliation you can lay next to your books line by line without hiring anyone, and per-product reports that tell you which product makes you money — and which one is all breakage and headache. Amazon’s reports tell you what happened to Amazon. Your books should tell you what happened to you.