Many Amazon sellers assume that you simply list a product, customers buy it, and the money lands in your bank account and it’s done. Selling on Amazon may look simple, but in reality, it gets complicated very quickly, especially for Australian sellers dealing with GST, Amazon fees, and accurate profit tracking. If you are a Sydney-based Amazon seller, this guide is for you. It will help you navigate the key accounting challenges Amazon sellers face. So without further ado, let’s get started. 

Top 3 Challenges Amazon Sellers Face

1. GST Challenges

GST (Goods and Services Tax) is a tax you pay to the government when your annual business turnover is $75,000 or more. This means you must charge 10% GST on taxable products and report it to the ATO in your Business Activity Statement (BAS). However, because Amazon collects payments from customers on your behalf, sellers often struggle to identify the exact GST portion in sales, reconcile Amazon payout reports, and correctly report GST in their BAS. Also, Amazon charges various fees that include GST. If you do not properly track your GST credits, you could overpay or underpay tax and underreport expenses. In the case of imported goods, GST may apply at customs, and you may be able to claim this GST as a credit if you are registered. 

Solution: For these GST issues, register for GST if required and keep tax invoices for all Amazon fees. Reconcile your monthly reports, or hire an experienced accountant familiar with e-commerce and Amazon. Since there is no straight forward integration of Amazon with most accounting softwares, it’s best to use third party integration, for example A2X to help two platforms communicate and automate transactions. 

2. Amazon Seller Fees

These problems often occur with new sellers who assume that profit is simply the selling price minus the product cost. However, this is completely wrong. Amazon charges multiple layers of fees, including referral fees, Fulfilment by Amazon (FBA) fees, subscription fees, and advertising fees. Amazon charges a percentage of your sale price that depends on the product category. If you use Amazon FBA services, you will also pay storage fees, pick-and-pack fees, shipping fees, and long-term storage costs. A professional seller account also attracts a monthly subscription fee. In addition, if you run PPC ads such as Sponsored Products or Sponsored Brands, this will be a separate expense that reduces your profit. 

Solution: To accurately calculate Amazon fees, download and reconcile monthly settlement and statement reports, and track each fee category separately. In your profit calculations, do not forget to include advertising spend that gets taken out from your attached bank/card instead of the usual deduction out of pay out. It’s always recommended to hire ecommerce expert accountants that well understand how amazon handles these transactions. 

3. Profit Tracking

Another major mistake Amazon sellers make is assuming that all the money in their bank account is profit. You must understand that net profit equals true revenue minus all expenses. Proper profit tracking requires you to consider: revenue (with GST separated), cost of goods sold, freight and import costs, Amazon referral fees, advertising costs, FBA fees, refunds and chargebacks, software subscriptions, GST payable and GST credits. After deducting all of these from revenue, you get your net profit. 

Many sellers also fail to track profitability at the SKU level, which means they do not know which individual products are truly profitable and which are losing money once all costs are included. Without SKU-wise profitability tracking, it becomes difficult to make informed decisions about pricing, advertising spend, and inventory planning.

Other common mistakes Amazon sellers make when calculating profit include mixing personal and business finances, which creates chaos, not tracking inventory correctly, ignoring cash flow, and skipping monthly reconciliations. These errors can hurt you at tax time because the ATO’s strict standards can lead to penalties. You also need to stay on top of your GST and BAS reporting obligations. 

Solution: 

To accurately track profit as an Amazon seller, start by separating your business and personal finances with a dedicated business bank account. Use reliable accounting software such as Xero or another platform that integrates with Amazon through a third party integration so that revenue, fees, and settlements are automatically recorded.

In addition to overall profit tracking, monitor SKU-wise profitability to understand the true performance of each product. This means allocating all relevant costs—including cost of goods sold, freight, Amazon fees, and advertising spend—to individual SKUs so you can identify which products generate healthy margins and which need pricing adjustments or cost reductions.

Maintain accurate inventory records so your cost of goods sold is calculated correctly. Reconcile your Amazon settlements, bank deposits, advertising costs, Amazon fees, refunds, and GST transactions every month to ensure your financial records are accurate.

Finally, work with an expert accountant who understands Amazon businesses and Australian tax regulations. A specialist can help you manage GST, BAS reporting, and ensure your financial data is accurate, compliant with ATO requirements, and clearly reflects both overall and SKU-level profitability.

Hassle-Free Amazon Accounting Solution in Sydney

Managing Amazon accounting can quickly become complex. From GST reporting and Amazon fee reconciliation to profit tracking, inventory costs, and BAS preparation, keeping your finances accurate and compliant requires specialised expertise.

If you are an Amazon seller looking for a reliable accountant in Sydney, Outback Accounting provides tailored accounting solutions designed specifically for eCommerce businesses. Our experienced team understands the unique financial challenges Amazon sellers face, including Amazon settlement reconciliation, GST compliance, and tracking true profitability.

We help you stay compliant with ATO regulations, gain clear visibility over your financial performance, improve cash flow, and make informed decisions to grow your business with confidence.

Book a consultation with Outback Accounting today and take the stress out of your Amazon accounting.

Frequently Asked Questions

Do Amazon sellers in Australia need to register for GST?

Yes. If your business turnover reaches $75,000 or more per year, you must register for GST with the ATO. Once registered, you need to charge 10% GST on taxable sales, lodge Business Activity Statements (BAS), report GST collected, and claim GST credits on eligible business expenses such as inventory, freight, and Amazon fees.

Do Amazon sellers need to pay GST on Amazon fees in Australia?

Yes. Many Amazon fees charged to Australian sellers include GST or may require GST to be accounted for under reverse charge rules depending on the service and supplier. It is important to correctly record these fees in your accounting system so GST is reported accurately in your BAS.

How should Amazon sellers track their profit accurately?

Amazon sellers should track profit by deducting all business expenses from revenue. This includes cost of goods sold, freight and import costs, Amazon referral fees, FBA fees, advertising spend, refunds, software subscriptions, and GST payable after GST credits. Tracking profitability at the SKU level is also important so you can identify which products generate profit and which may be losing money.What accounting software is best for Amazon sellers?
Cloud accounting software such as Xero is commonly used by Amazon sellers because it allows you to track income, expenses, GST, and BAS obligations in one place. When integrated with Amazon settlement reports and other tools, it helps automate bookkeeping, reconcile Amazon fees, and provide accurate financial reports.