Running an online store has never been easier — but staying profitable has never been harder.
Between rising ad costs, marketplace fees, and constant price competition, guessing your profits just doesn’t cut it anymore.
To succeed in 2025, every e-commerce seller — whether you’re on Amazon, Shopify, or Etsy — needs to understand their numbers like a CFO. This guide breaks down the 9 ecommerce accounting metrics that distinguish growing online businesses from those that quietly run out of cash.
Revenue: What You’re Really Bringing In
Your top line is more than just what your sales dashboard shows.
Each platform records revenue differently — and ignoring the details can give you a false sense of success.
Track every month:
- Gross sales per platform (Amazon, Shopify, eBay, Etsy)
- Refunds and returns
- Discounts and coupons
- Marketplace and transaction fees
💡 Tip: Always reconcile your sales reports with your accounting software. Amazon, Shopify, and PayPal rarely agree — and that’s where profit leaks start.
Cost of Goods Sold (COGS): What It Costs to Sell
Your COGS isn’t just the price you paid your supplier. It’s everything it takes to get your product ready to sell.
Include:
- Product purchase or manufacturing costs
- Freight, import duties, and packaging
- FBA or 3PL fulfilment fees
- Returns and damaged goods
If you don’t calculate this accurately, your gross profit margin will lie to you.
🧾 Tip: Record COGS monthly, not annually. That’s how you spot products that sell well but drain your margins.
Advertising & Marketing: The Hidden Profit Killer
Advertising drives growth — until it doesn’t.
If you don’t monitor your ACoS (Advertising Cost of Sale) or ROAS (Return on Ad Spend) monthly, you might be selling more but earning less.
Track monthly:
- Ad spend per channel (Amazon Ads, Meta, Google)
- ROAS or ACoS
- Conversion rate from ads
- Customer acquisition cost
⚙️ Insight: You can’t manage what you don’t measure. A £5,000 ad budget means nothing if your margins are shrinking.
Inventory: Your Cash on a Shelf
Your inventory is one of your biggest assets — and biggest risks.
If it’s not tracked carefully, it can quietly eat your profits through storage costs and stockouts.
Each month, review:
- Stock levels vs sales velocity
- Inventory value (landed cost)
- Ageing stock and slow movers
- Reorder alerts and restock timing
📦 Tip: FBA long-term storage fees or unsellable stock can wipe out a month’s profit. Monitor them like cash.
Operating Expenses: The Overheads You Forget
The difference between a business and a hustle is knowing your overheads.
Include:
- Software subscriptions (Shopify apps, analytics tools)
- Accounting and banking fees
- Office rent or storage
- Staff or VA costs
Small recurring costs can quietly snowball. Review them monthly and cancel what you don’t use.
💬 Tip: Use one card or bank account for all business expenses — it makes tracking and reconciling far easier.
VAT & Taxes: The Numbers HMRC Cares About
VAT compliance has become a major issue for e-commerce sellers, especially those trading internationally.
Track monthly:
- VAT on UK sales
- VAT reclaim on expenses
- Cross-border VAT obligations (EU OSS/IOSS schemes)
🧮 Tip: Even if you file VAT quarterly, track it monthly. It avoids last-minute surprises and keeps your cashflow realistic.
Profit & Loss: The Truth About Your Business
Your P&L (Profit & Loss Statement) is the single most important report you’ll ever read.
Every month, check:
- Gross profit (Revenue – COGS)
- Operating profit (Gross profit – Expenses)
- Net profit after tax
- Trends compared to last month and last quarter
📊 Insight: Growth without profit is just vanity. Tracking these numbers monthly helps you course-correct before the damage is done.
Cashflow: The Lifeline of Every E-commerce Business
Profit doesn’t always mean cash in the bank.
Because of delayed payouts, inventory purchases, and ad spend cycles, even profitable sellers can run out of cash.
Monitor monthly:
- Opening and closing bank balances
- Expected VAT/tax payments
- Supplier invoices due
- FBA reimbursements or platform payouts
💡 Tip: Keep at least 2–3 months of expenses in reserve. That buffer can save your business in a slow sales month.
Why Most E-commerce Sellers Get This Wrong
Most sellers only look at their sales, not their profitability.
They rely on marketplace dashboards instead of proper accounting data — and that’s why they can’t see where their money is really going.
A structured monthly accounting review of these ecommerce accounting metrics gives you the power to make better decisions:
When to restock
Which products to scale
When to pull back on ads
That’s how smart founders build profitable, sustainable brands.
Frequently Asked Questions?
E-commerce accounting is more complex than traditional bookkeeping because sales, fees, and taxes are spread across multiple platforms like Amazon, Shopify, and PayPal. A specialist accountant understands the key ecommerce accounting metrics and how to:
- Reconcile multi-platform sales data accurately
Track marketplace fees and FBA charges
Handle VAT for UK and international sales
Automate reporting between systems like Xero and Shopify
Working with an e-commerce accountant like The Calculator Guy means you’ll see your true profit, stay compliant, and make better business decisions based on real numbers — not guesswork.
COGS is the total cost of producing or buying the products you sell — including materials, shipping, and packaging. It shows how much it costs you to make each sale.
ACoS stands for Advertising Cost of Sale. It’s the percentage of ad spend compared to the sales generated by those ads — mainly used by Amazon sellers to measure ad performance.
ROAS means Return on Ad Spend. It measures how much revenue you earn for every pound spent on advertising. For example, a ROAS of 4 means you earned £4 for every £1 spent.
Reconciliation means matching your financial records (like sales reports, bank transactions, and invoices) to make sure everything adds up accurately.
🚀 The Calculator Guy helps you stay profitable!
We help e-commerce brands connect their Amazon, Shopify, and Xero data, automate VAT tracking, and get clear monthly profit and cashflow insights — so they finally see the real numbers behind their store.