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Returns Don't Disappear; They Compound - What Amazon Doesn't Tell You | ARC

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Manage episode 515205601 series 2907093
Content provided by CPA Trendlines. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by CPA Trendlines or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://podcastplayer.com/legal.

Returns ripple through revenue recognition, inventory, and environmental reporting.

Accounting ARC

With Liz Mason, Byron Patrick, and Donny Shimamoto

Center for Accounting Transformation

Accounting ARC hosts Liz Mason, CPA; Byron Patrick, CPA.CITP, CGMA; and Donny Shimamoto, CPA.CITP, CGMA, use a YouTube investigation into Amazon’s return ecosystem as a springboard to examine the financial realities behind frictionless refunds. They agree that returns are a strategic cost center that must be engineered into product pricing, platform choice, and tax compliance from the start.

Higher return rates are the rule online. U.S. retailers estimated that 16.9% of 2024 sales—about $890 billion—were returned, according to the National Retail Federation and Happy Returns. The cost of reverse logistics, shrinkage, and fraud compounds the hit to gross margin. “If you want the increased revenue from Amazon sales, it’s going to come with increased returns,” Shimamoto says. “You can’t have the reach without the cost.”

Fees require granular modeling. Amazon’s seller fees are multilayered. Referral fees commonly range from approximately 8% to 15% by category and are typically accompanied by fulfillment, storage, and program charges. “Owners see the top line and assume they’re making money,” Patrick says. “Reconciling marketplace statements to cash is a jigsaw puzzle—even for CPAs.”

  continue reading

552 episodes

Artwork
iconShare
 
Manage episode 515205601 series 2907093
Content provided by CPA Trendlines. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by CPA Trendlines or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://podcastplayer.com/legal.

Returns ripple through revenue recognition, inventory, and environmental reporting.

Accounting ARC

With Liz Mason, Byron Patrick, and Donny Shimamoto

Center for Accounting Transformation

Accounting ARC hosts Liz Mason, CPA; Byron Patrick, CPA.CITP, CGMA; and Donny Shimamoto, CPA.CITP, CGMA, use a YouTube investigation into Amazon’s return ecosystem as a springboard to examine the financial realities behind frictionless refunds. They agree that returns are a strategic cost center that must be engineered into product pricing, platform choice, and tax compliance from the start.

Higher return rates are the rule online. U.S. retailers estimated that 16.9% of 2024 sales—about $890 billion—were returned, according to the National Retail Federation and Happy Returns. The cost of reverse logistics, shrinkage, and fraud compounds the hit to gross margin. “If you want the increased revenue from Amazon sales, it’s going to come with increased returns,” Shimamoto says. “You can’t have the reach without the cost.”

Fees require granular modeling. Amazon’s seller fees are multilayered. Referral fees commonly range from approximately 8% to 15% by category and are typically accompanied by fulfillment, storage, and program charges. “Owners see the top line and assume they’re making money,” Patrick says. “Reconciling marketplace statements to cash is a jigsaw puzzle—even for CPAs.”

  continue reading

552 episodes

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