Bookkeeping for Book Sellers: Tracking COGS, Fees & Mileage
Disclosure: This guide contains affiliate links to a free training. We may earn a commission at no cost to you. Learn more.
Bookkeeping for book resellers comes down to three records: what each book cost you (cost of goods), what Amazon charged and paid you (fees and disbursements), and your other business expenses, especially mileage. Capture cost at the moment you buy, reconcile Amazon's reports once a month, and log every sourcing trip, and tax time becomes a short, predictable task.
Key Takeaways
- Record each book's cost when you buy it. Trying to reconstruct it later is where most book bookkeeping falls apart.
- Amazon deposits are net figures. Book the gross sales, fees, and refunds separately so your profit is accurate.
- A mileage log is a must for book scouts, because sourcing trips add up fast.
- A spreadsheet works fine at first; software helps once volume or complexity grows.
- Use a separate bank account and card for the business from day one.
Why Bookkeeping for Book Sellers Is Different
A typical small business buys a product many times at the same cost. A book reseller buys hundreds of unique items, each at a different price, from dozens of sources: $1 at a thrift store, $0.50 per book in a bag sale, $40 for a box lot, $18 for a single online arbitrage buy. Then Amazon sells them over weeks or months and deposits a net amount every two weeks or so.
That combination of many unique, low-cost items and net payouts is why sellers who "just look at the bank balance" usually do not know their real profit. This guide gives you a simple system. It is part of our business, taxes, and account health hub, and it feeds directly into the tax picture in our pillar guide to taxes on selling books on Amazon.
Not tax advice. This page describes general bookkeeping practices. How you report income, inventory, and deductions on your return depends on your situation and current rules. Confirm your setup with a tax professional, especially in your first year.
The Categories Every Book Business Needs
You do not need a complicated chart of accounts. These categories cover most textbook-flipping businesses.
| Category | Type | What goes in it |
|---|---|---|
| Product sales | Income | Item prices of books sold |
| Shipping credits | Income | Shipping paid by buyers on FBM orders |
| Refunds | Contra-income | Money returned to buyers |
| Reimbursements | Income or offset | FBA lost or damaged inventory payments (ask your preparer) |
| Inventory purchases | Asset until sold | Books bought for resale |
| Cost of goods sold | Expense | Cost of the books that actually sold |
| Amazon selling fees | Expense | Referral fees, closing fees |
| FBA fees | Expense | Fulfillment, storage, placement, removal |
| Subscription fees | Expense | Professional plan, apps, repricers |
| Postage and shipping | Expense | Media Mail labels, inbound shipments to FBA |
| Supplies | Expense | Boxes, mailers, tape, labels |
| Vehicle / mileage | Expense | Business miles at the standard rate or actual costs |
| Equipment | Expense or asset | Printers, scales, shelving |
| Professional fees | Expense | Tax preparer, bookkeeper, legal |
Amazon-collected sales tax should stay out of income entirely. Our guide to sales tax for Amazon book sellers explains why.
How to Track Cost of Goods for Each Book
Cost of goods sold is the heart of a book seller's books. The goal is simple: when a book sells, you know exactly what it cost.
Method 1: Cost in the SKU or listing
Many sellers store the cost in Amazon itself. When you list a book, you assign a merchant SKU. Some sellers build the purchase date and cost into the SKU (for example, a code that includes the month and the dollar amount) or enter cost in a listing tool that supports it. When an order report shows the SKU, you can read the cost.
Method 2: A purchase log spreadsheet
Keep a row for every book you buy with these columns:
- Date purchased
- Source (store, sale, seller name)
- ISBN and title
- Cost (including your share of any lot price)
- SKU assigned
- Receipt reference (photo filename or folder)
- Date sold, sale price, fees, and net (filled in later)
Our book profit tracking spreadsheet guide walks through the formulas.
Method 3: Inventory or listing software
Listing and inventory tools for book sellers often capture cost at the point of listing and produce profit reports. See our overview of inventory and accounting software for book sellers for the categories of tools and what to look for.
Hypothetical example: allocating a lot. Say you pay $30 for a box of 40 books at an estate sale. You keep 12 that are worth listing and donate the rest. A common approach is to spread the $30 over the 12 keepers, so each carries a $2.50 cost. Whatever method you choose, use it consistently and write it down.
How to Record Amazon Sales, Fees, and Payouts
Amazon pays you a disbursement, which is your sales minus fees, refunds, and adjustments for a settlement period. If you record only the deposit as income, you understate both your sales and your expenses. Your profit may look right, but your tax return and margins will not.
The settlement-based approach
- Download the settlement report (or summary) for each period from Seller Central.
- Record gross product sales and shipping credits as income.
- Record refunds separately.
- Record referral and closing fees, FBA fees, subscription fees, and any advertising as expenses.
- Record the net disbursement as the transfer into your bank account.
- Confirm the entry balances: income minus refunds minus fees equals the deposit.
Bookkeeping software with an Amazon connection can do this automatically, but review the categories the first few months. For a deeper understanding of each fee, see our guide to Amazon fees for selling books; the FBA fee breakdown for textbooks covers fulfillment, storage, and placement charges.
Tracking Mileage and Other Expenses
Mileage
Book scouting means driving to thrift stores, library sales, estate sales, and the post office. Those business miles can be a significant deduction, but only if you log them. For each trip record:
- Date
- Starting point and destinations
- Business purpose (e.g., "sourcing at three thrift stores")
- Miles driven
Mileage apps that track trips automatically make this easier. If you use the standard mileage rate, look up the current IRS rate for the year rather than reusing an old one.
Receipts
Photograph every receipt the day you get it and save it to a dated folder. Name files so they connect to your purchase log. These receipts serve double duty: they support your deductions and help you answer authenticity complaints on textbook listings.
Separate accounts
Use one bank account and one card for business only. It makes reconciliation fast and supports the separation an LLC needs, if you form one. See our guide on whether you need an LLC to sell books on Amazon.
A Monthly Bookkeeping Routine for Book Sellers
Set aside about an hour a month. Doing it monthly keeps each session short and catches mistakes while you still remember the details.
| Step | Task | Time |
|---|---|---|
| 1 | Record each Amazon settlement for the month | 15 min |
| 2 | Match bank and card transactions to categories | 15 min |
| 3 | File receipts and update the purchase log | 10 min |
| 4 | Total the month's mileage | 5 min |
| 5 | Review profit, inventory spend, and cash on hand | 10 min |
| 6 | Move your tax set-aside to savings | 5 min |
Step 5 is where bookkeeping turns into decision-making. Our guide to key metrics for a book reselling business explains which numbers to look at, and the guide to cash flow in a book business covers how much to reinvest versus hold. Timings above are rough estimates for a small operation.
Year-End: Counting Inventory and Closing the Books
Unsold books at year-end are generally inventory, not an expense, which affects your cost of goods sold. At year-end:
- Export your Amazon inventory report (FBA and FBM) as of December 31.
- Add books at home that are not yet listed.
- Look up the cost of each from your purchase log or SKUs.
- Total the cost of ending inventory.
- Give your preparer the beginning inventory, purchases, and ending inventory so cost of goods sold can be calculated.
If a book is damaged, unsellable, or was disposed of through a removal order, note that too. Ask your preparer how to handle write-downs or disposals.
Spreadsheet vs Bookkeeping Software
| Option | Best for | Pros | Cons |
|---|---|---|---|
| Spreadsheet | New sellers, low volume | Free, flexible, teaches you the numbers | Manual, error-prone at volume |
| General bookkeeping software | Growing sellers | Bank feeds, reports, preparer access | Monthly cost, setup time |
| Amazon-connected accounting tools | Higher volume | Automates settlement entries | Another subscription; still needs review |
| Bookkeeper | Sellers with little time | Done for you, fewer mistakes | Ongoing fee |
Software prices and features change, so compare current offerings. Many sellers start with a spreadsheet and switch once they are processing hundreds of orders a month. If you are getting ready to grow, our guide to scaling a textbook business covers when systems like this pay off. And if you are still setting up the business itself, start with the beginner's guide to selling textbooks on Amazon; the Book Profits free training overview explains a structured option for learning the model.
Bottom Line
Good bookkeeping for book sellers is not complicated, but it must be consistent. Capture each book's cost the day you buy it, record Amazon settlements as gross sales minus fees rather than just deposits, log every sourcing mile, and keep receipts organized. Spend an hour a month reconciling and reviewing, count inventory at year-end, and hand your preparer clean records. You will pay a fair amount of tax instead of a guessed one, and you will know which books and sources actually make money.
Frequently Asked Questions
What is the easiest bookkeeping method for a new book seller?
A simple spreadsheet with a purchase log (one row per book, with cost and SKU) and a monthly tab for Amazon settlements and expenses is enough for most new sellers. Pair it with a dedicated bank account and a mileage app. Once you are handling hundreds of orders a month, consider bookkeeping software with an Amazon connection.
Should I use cash or accrual accounting for my book business?
Many small sellers use the cash method for income and expenses, but inventory has its own rules that can affect timing regardless of the method. Some small businesses qualify for simplified inventory treatment. Because the choice affects your taxes, ask a tax professional which method you can use and set your books up accordingly.
How do I track the cost of books bought in bulk?
Divide the total price by the number of sellable books you keep, or use another reasonable allocation method such as weighting by expected sale price. The important part is applying the same method every time and documenting it. Record the per-book cost in your purchase log or SKU when you list each book.
Do I need a separate bank account to sell books on Amazon?
It is not usually required for a sole proprietor, but it is strongly recommended. A separate account makes reconciliation faster, gives you a clean audit trail, and keeps personal spending out of your business records. If you form an LLC, separate accounts are important for maintaining the liability separation.
How long should I keep receipts for my book business?
A common rule of thumb is to keep tax records for at least three years after you file, and longer in certain situations, such as when inventory or assets carry over between years. Digital copies are generally acceptable if they are legible and complete. Ask your preparer for a retention policy that fits your situation.
Can I deduct books I bought that never sold?
Unsold books remain inventory, and their cost is generally recovered when they sell. If books become worthless, damaged, or are disposed of, there may be ways to account for that loss. The rules are specific, so document what happened to each book and ask your tax professional how to handle it.