Introduction: Why Accounting Is Critical in Dropshipping

Accounting might not be the most exciting part of ecommerce—but it’s one of the most important. In dropshipping, where you often manage dozens or even hundreds of small transactions per day across multiple platforms, understanding your true revenue, costs, and margins is critical to maintaining profitability. This guide simplifies ecommerce accounting for dropshippers and provides a framework for tracking key financial metrics.

Key Accounting Concepts for Dropshippers

1. Revenue

This is the total income you earn from customer purchases before expenses.

• Example: You sell a product for $50 on Shopify = $50 in gross revenue.

2. Cost of Goods Sold (COGS)

This is what you pay your supplier for the product and shipping.

• Example: You paid $25 for the product + $5 shipping = $30 COGS.

3. Marketplace Fees

Platforms like Amazon, Walmart, eBay, and payment processors deduct fees:

• Amazon: 8–20% referral fees + fulfillment costs (FBA)
• eBay: ~12.9% final value fee
• Shopify: 2.9% + 30¢ payment fee (via Stripe/Shopify Payments)
• PayPal/Stripe: ~2.9% + $0.30

4. Gross Profit

Revenue – COGS = Gross Profit

• Example: $50 – $30 = $20

5. Net Profit

Gross Profit – Fees – Marketing – Overhead = Net Profit

Why Dropshipping Needs Specific Accounting Workflows

• High volume of micro-transactions
• Varying marketplace fee structures
• International supplier payments and currency conversion
• Delayed cash flow due to payout schedules (Amazon, Stripe, etc.)

Setting Up Your Accounting System

Use Ecommerce Accounting Tools:

• QuickBooks Commerce
• Xero
• Bench
• A2X (Amazon/eBay accounting sync)
• EcomBiz.AI: Unified dashboard across channels, order-level profit tracking

Chart of Accounts Should Include:

• Revenue by channel (Shopify, Amazon, eBay, etc.)
• Cost of Goods Sold (COGS)
• Marketing and advertising
• Platform fees
• Software tools
• Shipping and fulfillment
• Returns and refunds
• Miscellaneous expenses

How to Track Key Financial Metrics

1. Per Order:

• Order total (revenue)
• Supplier cost + shipping (COGS)
• Platform fee (percentage or fixed)
• Net profit

2. Per SKU:

• Best and worst-performing products
• Return rates and refund impact
• Margin by product or product type

3. Per Channel:

• Profitability by marketplace
• Ad spend vs. revenue (ROAS)
• Transaction volume and fee breakdown

Automating Accounting With EcomBiz.AI

• Syncs orders, payouts, fees, and product costs across Shopify, Amazon, eBay, and Walmart
• Maps revenue and expenses to correct GL categories
• Tracks profit per order, SKU, or channel
• Export-ready reports for tax filing and cash flow planning

Tax Considerations for Dropshippers

• Track sales tax collected by state (Shopify, Amazon auto-collect in some states)
• Consider hiring a CPA familiar with ecommerce and cross-border taxation
• Set aside tax reserves from gross profit to avoid surprises

Common Mistakes to Avoid

• Not tracking refunds and chargebacks
• Forgetting about ad spend in net profit calculations
• Mixing personal and business finances
• Ignoring foreign transaction fees or PayPal currency losses

Real-World Example

A dropshipper selling on Amazon and Shopify:

• Uses EcomBiz.AI to pull in all orders, COGS, and fees
• Automatically calculates profit per order
• Flags unprofitable SKUs monthly
• Exports data to QuickBooks for taxes and financial forecasting

Result: Improved visibility, reduced bookkeeping hours, and 15% better margin control.

Conclusion: Know Your Numbers, Grow Your Profits

Accounting may not feel glamorous, but it’s what turns your store from a hobby into a real business. With smart systems and automation, ecommerce accounting becomes simple, reliable, and empowering.

Call to Action:
Want to simplify your dropshipping accounting? Start your free trial with EcomBiz.AI and get real-time visibility into your revenue, costs, and profitability across all your selling channels.