Revenue is vanity. Margin by channel is sanity.

Payout-based revenue. Booking Amazon deposits as revenue nets out fees, refunds, and reserves — overstating margin and understating ad spend. Real books gross these up.

Nexus discovered late. Economic nexus thresholds (often $100k of sales into a state) create obligations silently. Discovering them during due diligence for a sale is the expensive way.

COGS as a plug number. Without landed cost and per-SKU tracking, you can't tell which products fund the business and which quietly drain it.

Economic nexus is the defining compliance issue. Since Wayfair, most states require registration once sales or transaction thresholds are crossed — which happens quietly for growing online sellers. Marketplace facilitator laws shift some collection to Amazon, Walmart, and Etsy, but not all of it, and never for your own direct channel.

Inventory method and shrink. Whether inventory is valued FIFO or weighted average affects both margin reporting and taxable income, and reconciling counted inventory to the books quarterly is where shrink, damage, and marketplace discrepancies actually surface.

True unit economics. Gross margin before platform fees, payment processing, shipping, returns, and advertising is a fiction. Contribution margin after all of it — by SKU and by channel — is what tells you which products fund the business and which quietly consume it.

Reconciliation is the monthly discipline. Platform settlements net out fees, refunds, and reserves, so the deposit in your bank never equals gross sales. Without a settlement-level reconciliation, revenue and fees are both wrong — and so is every margin you calculate from them.