The internet is a massive and powerful part of everyday life. From checking the news and the weather to keeping in touch with friends, to buying groceries and other life necessities, the internet can do it all.
Thanks to the internet’s reach, buying and selling items is easier than ever before. A world of services, products, and items are truly at your fingertips. And for many small businesses, this means that their reach can extend far past their community and into the wider world of eCommerce.
But eCommerce isn’t as simple as just buying or selling things over the internet. There’s a lot more to understand— especially if your small business relies on eCommerce as part of its business model.
So let me begin by explaining eCommerce in more detail. If you’re already familiar with it though, feel free to jump down to why your small business should use QuickBooks eCommerce to keep your books in order.
What is eCommerce?
You may have heard this phrase floating around for a while, but perhaps you couldn’t quite put your finger on what it is. But if you plan to make eCommerce part of your business model, and even if it already is, it’s very important to know what exactly eCommerce is and what it entails.
eCommerce— also known as electronic commerce or internet commerce— by definition is simply buying and selling goods using the internet, and the transfer of money for these transactions. Often it refers to physical products— for example, ordering books from Amazon with your credit card— but it can describe any commercial transaction done via the internet. This can even include purchasing a course, or selling cryptocurrency like Bitcoin, or non-fungible tokens (NFTs).
What Type of Businesses Use eCommerce?
All businesses that sell a product online— large or small— make up what we call eCommerce. This ranges from retail giants like Amazon and Walmart all the way down to private sellers on platforms like eBay, Etsy, or Mercari.
eCommerce can take a number of forms, depending on what transactions are taking place between the businesses and their consumers. These can include:
- Retail: Selling a product directly to consumers. Think retail businesses like LL Bean, Bed Bath and Beyond, or your neighborhood grocery store.
- Wholesale: Selling products in bulk, often with an intermediary business that sells directly to consumers. This includes businesses like Costco and Sam’s Club.
- Crowdfunding: Collecting money from consumers for a product in advance, to raise the necessary capital to create the product. This is often seen on websites like Kickstarter, GoFundMe, and Patreon. Crowdfunding projects can run the gamut from products like video games and board games, to passion projects, to entire business ventures.
- Subscription: The automatic purchase and payment for a product on a regular basis, until the subscription is canceled. This is especially popular with companies like BarkBox, Dollar Shave Club, and StitchFix. Many programs run on a subscription-based model as well, including Adobe and Intuit QuickBooks.
- Services: Basically, this is being compensated for offering a service or set of skills online. This can include IT and technology firms and even accounting firms, among many others.
- Digital Products: The purchase and download of digital goods. This can include products ranging from programs and templates to media like music or stock images.
- Dropshipping: Selling a product that is manufactured and shipped to a consumer by a third party.
While it can be simple to define eCommerce, there’s a lot more to it than just the buying and selling of products. Who buys from whom can be just as important as the business model itself.
The Types of eCommerce Models
There are four main types of eCommerce models. Each of these describes the different kinds of transactions that take place between all kinds of different sellers from the large company to the consumer.
- Business to Consumer (B2C): B2C eCommerce is when a consumer buys a product from a business— such as someone buying home goods from Amazon.
- Business to Business (B2B): B2B eCommerce occurs when one business purchases a product or service from another business. This can include a wholesaler, a business selling software, services, or expertise to another business.
- Consumer to Consumer (C2C): When a consumer sells a product to another consumer, like a person selling baseball cards to another person on eBay, or an artist selling from an online store on Etsy.
- Consumer to Business (C2B): This isn’t as common, but it’s still important to note. This occurs when a consumer sells their services or a product to a business. This can include someone selling collectible coins to a coin shop, or selling goods to a pawn shop.
So eCommerce isn’t just internet juggernauts selling items to everyday consumers. Individual sellers and small businesses are a huge part of what makes eCommerce what it is. And there are many platforms available for sellers of all sizes to reach their desired audience.
What eCommerce Platforms are Available for Small Businesses?
The sky’s the limit when it comes to choosing the right eCommerce platform for your small business. Whichever platform you or your business use are entirely up to personal preference though. Different platforms may be more effective for different businesses. Some of the most popular platforms include:
- Big Cartel
- Wix eCommerce
No matter which platform you choose, it’s important to keep everything from inventory to sales orders to cash flow as organized as possible. That’s where the right accounting software comes in.
Managing an eCommerce store is no easy task. The sooner you can integrate your front-end selling platform with your backend accounting platform, the more effective you will be. Ideally, you’d start with a fully integrated system, but let’s face it, sometimes we don’t have the luxury. If you’ve already begun selling without integrating your backend systems, do it as soon as possible.
Manual data entry is difficult, time-consuming, and leaves a lot of room for error. Integrating QuickBooks into your eCommerce platform of choice not only makes keeping track of your business’ profits much simpler, but it can also save you time and money!
Here are a few of the great features that QuickBooks Online offers for eCommerce:
- Keeps track of payments, fees, sales tax, expenses, online sales, and returned items throughout your eCommerce store.
- Securely accepts payments through 128-bit SSL encryption. Also includes credit card security fraud prevention.
- Utilizes inventory sync to keep all orders, order statuses, and inventory management organized in one location.
- Keep track of expenses, sales orders, landed cost, and customer information.
- Automates your accounting so that you make the most out of your business transactions.
Which QuickBooks Programs Work for eCommerce?
Intuit QuickBooks’ lineup of online programs will have whatever features your business needs for eCommerce. Different programs will have different features, depending on the price. Some of these programs include:
- QuickBooks Pro
- QuickBooks Enterprise
- QuickBooks Online Advanced
- QuickBooks Online Simple Start
- QuickBooks Online Essentials
If your current QuickBooks version doesn’t have what you need to run your eCommerce store, upgrading is quick and simple. You just need your QuickBooks online account information and an idea of what features you need for your business to succeed. If you need help choosing the right QuickBooks solution for your business, we are here to help. Simply email or call and we’ll walk you through the process.
Can I Use QuickBooks Desktop for eCommerce?
A QuickBooks Online subscription is required to use QuickBooks eCommerce. However, starting in 2022 all QuickBooks desktop programs are moving to an online subscription model. You’ll still be able to use all the familiar features of your chosen program, but with some new features added thanks to the online model. This even includes eCommerce features that were previously inaccessible to Desktop users, like revenue tracking and inventory tracking.
Which eCommerce Platforms Integrate Into QuickBooks?
QuickBooks offers integration with many popular eCommerce platforms, including:
Remember, there’s no “one size fits all” program for your eCommerce business. Like any program, the level of integration to your existing systems and the ability to provide you with critical information to make sound decisions is a key consideration.
Additionally, the different memberships, fees, and features may not work as well for your business as they would for another. It’s important to explore what products and features work best for your business. If you are unsure of what to choose, it’s also important to get professional guidance so that you don’t over-buy or under-buy in terms of functionality and expense.
Want to Make eCommerce Easier? MISSION Accounting Can Help
The best tools are only as good as the hands using them— and it’s impossible to use the best software to its fullest capabilities unless you know what to do.
But don’t worry— everyone at MISSION Accounting is here to help! Our specialized team of accountants can help you with your eCommerce business’ bookkeeping needs— so the only thing you’ll need to worry about is keeping your customers happy.
Bernard Roesch, MISSION Accounting’s founder, is a Harvard MBA and a QuickBooks ProAdvisor. He has over 25 years of experience in advising his clients and helping them make smart and profitable business decisions. He and his team of QuickBooks experts can also help you choose the right QuickBooks version and help your business unleash the full power of QuickBooks to help your business and its finances thrive.
Contact us at Mission Accounting today to schedule a complimentary consultation for your QuickBooks software needs. We’re here to help you find solutions to all your business’s financial needs and make keeping track of your finances easy.