How Do I Track Profit Properly When Selling on Both Amazon and My Own Website?
To track profit properly across Amazon and your own website, you need to calculate net profit per sales channel separately — accounting for each channel's unique fees, payout timing, and cost structure — rather than lumping all revenue together. Blending the numbers hides where you're actually making money and where you're quietly bleeding it.
Why Blending Your Numbers Is a Trap
Most hybrid sellers — those running their own storefront (Shopify, WooCommerce, etc.) alongside Amazon — make the same mistake: they add up total revenue, subtract total expenses, and call that profit. It feels logical. It's not.
Amazon and your own site have fundamentally different cost structures. If you average them together, a strong Shopify margin can mask a money-losing Amazon channel, or vice versa. You end up optimizing for a blended number that doesn't actually exist in either place.
Step 1: Separate Your Revenue Streams
Set up your books so that Amazon revenue and your own-site revenue are tracked as distinct income streams. In QuickBooks or Xero, this typically means separate income accounts or classes/tracking categories for each channel.
This sounds obvious. Very few businesses actually do it.
Step 2: Assign the Right Costs to Each Channel
Each channel carries its own cost layer. Map them out honestly:
Amazon costs to capture: - Referral fees (typically 8–15% of the sale price, category-dependent) - FBA fulfillment fees (pick, pack, ship — per unit) - FBA storage fees (monthly, and punishing during peak season) - Amazon advertising (PPC) spend - Returns and reimbursement adjustments - The settlement payout vs. what you actually sold — these are not the same number
Your own website costs to capture: - Payment processing fees (Shopify Payments, Stripe, etc. — usually 1.5–2.9% + flat fee) - Shopify subscription and app fees (allocated per month) - Shipping costs you absorb - Your own ad spend (Meta, Google) attributed to that channel - Return and chargeback costs
Shared costs to allocate fairly: - Product COGS (cost of goods sold) — same per unit, regardless of channel - Your time, staff, or 3PL costs tied to fulfillment
If you use FBA for Amazon orders but ship your own Shopify orders, those fulfillment costs are very different and must be split, not averaged.
Step 3: Reconcile Amazon Settlements Correctly
This is where most bookkeepers get it wrong. Amazon doesn't pay you revenue — it pays you a net settlement every two weeks, after deducting fees, refunds, and adjustments. If you book that deposit as revenue, you're understating both your gross revenue and your fees, which breaks your margin picture entirely.
The right method: record gross Amazon sales as revenue, then record Amazon fees as a separate expense line. This gives you an accurate gross margin per channel to compare against your own site.
Step 4: Build a Simple Channel Profit Report
Once your data is clean, you want to see something like this on a monthly basis:
| Amazon | Own Site | |
|---|---|---|
| Gross Revenue | $X | $X |
| Returns & Refunds | $(X) | $(X) |
| Net Revenue | $X | $X |
| COGS | $(X) | $(X) |
| Channel Fees | $(X) | $(X) |
| Ad Spend | $(X) | $(X) |
| Fulfillment | $(X) | $(X) |
| Net Channel Profit | $X | $X |
When you can see this side by side, you'll often discover that one channel is subsidizing the other — or that a product that looks profitable in aggregate is actually a loser on Amazon once fees are stripped out.
The Canadian Tax Layer to Keep in Mind
In Canada, GST/HST applies differently depending on the channel. Amazon collects and remits GST/HST on marketplace sales to Canadian customers (under the digital services rules), but that doesn't mean your bookkeeping is automatically clean — you still need to account for it correctly on your end to avoid double-counting tax, especially if you're also registered and collecting HST on your own site.
Why This Matters More Than You Think
Channel-level profit tracking isn't a bookkeeping nicety — it's how you make smart decisions. Should you push more traffic to your own site or lean into Amazon FBA? Should you run that Amazon PPC campaign or pull the budget? You can't answer those questions with blended numbers.
This is exactly the kind of multi-platform problem that trips up even experienced sellers. The mechanics are manageable; the key is setting the structure up correctly from the start so your monthly numbers actually tell you something useful.
Frequently asked questions
Can I use one QuickBooks or Xero file for both Amazon and Shopify?
Yes — and you should. Use a single file with separate income accounts, classes, or tracking categories for each channel. Splitting into two files creates more reconciliation work, not less.
Amazon's settlement deposit doesn't match my sales — what's going on?
That's normal. Amazon deducts fees, refunds, and adjustments before paying out a net settlement every two weeks. You need to record gross sales as revenue and Amazon fees as a separate expense — not just book the deposit — or your margins will be wrong.
Does Amazon collect GST/HST on my behalf in Canada?
For sales made through the Amazon marketplace to Canadian customers, Amazon is generally required to collect and remit GST/HST under Canada's marketplace facilitator rules. However, you still need to account for this correctly in your own books to avoid double-counting or misreporting — especially if you're also collecting HST on your Shopify store.
How do I figure out which channel is actually more profitable?
Build a channel profit report that shows net revenue minus COGS, channel fees, ad spend, and fulfillment costs for each platform separately. The channel with the higher net margin per dollar of revenue is your more profitable channel — and the answer is often surprising once fees are properly allocated.
What if I sell the same product on both channels — how do I split the COGS?
COGS is typically the same per unit regardless of channel, so you allocate it based on units sold per channel. The difference in profitability comes from the channel-specific fees and fulfillment costs layered on top of that shared product cost.
Every business's cost structure and tax position is different — the frameworks here are general education, not tailored advice. Talk to your accountant about how this applies to your specific channels and Canadian tax obligations.