If you're a retailer who is selling products on the internet, you can either choose to pack and ship your goods directly to your customers or hand this part of the process over to a drop-shipping company that ships the products for you. The benefits of using a drop-ship supplier make this method of shipment quite attractive. It requires less capital, allows you to get established and start your business quicker, provides a low overhead cost and gives you the flexibility to operate your company from just about anywhere. However, if you do decide to drop-ship your goods, there are accounting and tax details you should be aware of. Our team of e-commerce accountants are able to assist with drop-ship accounting and understand the complexities associated with this method of shipping.
E-commerce Sales Tax Challenges
While drop-shipping looks like an efficient method when you are introduced to the general concept of the process, it does have some tax challenges that should be addressed before you jump right in. When you choose to have a supplier ship your products to your customers, sales tax must be addressed. This isn't extremely complicated if you are registered in the state that you reside in. However, it becomes more complex when the state you live in is not the state your drop-ship company is operating in. Our e-commerce CPAs and tax specialists have the knowledge and experience to work with this type of situation and provide accurate accounting for your financial records.