Accounting and tax for wholesale and DTC brands.
You can generally claim your stock, logistics, trade show and channel-specific marketing costs against your brand's income, provided each one relates to earning it and you keep the records. This guide covers what wholesale and direct-to-consumer brands typically claim, how GST and multi-currency work when you're selling and importing across borders, and how we keep the numbers straight across more than one sales channel. We're Brisbane based and work with brands right across Australia.
Updated July 2026 · Reviewed by the LINK Advisors team
What wholesale & dtc brands can claim.
Ordered by typical value. Every claim still has to pass the ATO's tests: you paid for it, it relates to earning your income, and you can show a record.
Inventory and landed cost of stock
The cost of stock you manufacture or import, including freight and duty, generally forms your landed cost and sits in cost of goods sold, tracked against what's actually sold across every channel you sell through.
Warehouse and 3PL costs
Storage, pick and pack fees paid to a warehouse or third-party logistics provider are generally deductible.
Trade show and wholesale account costs
Trade show attendance, sample ranges and costs of onboarding new stockists are generally deductible as a cost of growing your wholesale channel.
Sales representative and commission costs
Commissions or wages paid to sales reps who manage wholesale accounts are generally deductible.
DTC advertising and marketing
Advertising spend and content production for your direct-to-consumer channel are generally deductible.
Packaging and branding materials
Product packaging, branded materials and any point-of-sale materials supplied to stockists are generally deductible.
Freight and logistics software
Subscriptions to shipping and logistics platforms used to manage orders across both channels are generally deductible.
Inventory and channel management software
Software that tracks stock across your own store, wholesale accounts and any marketplaces is generally deductible.
Accounting and multi-currency bookkeeping
Fees for accounting support that keeps multi-currency transactions and channel reporting accurate are generally deductible.
GST and BAS, done right.
Wholesale sales to Australian retailers are generally taxable in the same way as your direct-to-consumer sales, so GST applies once you're registered regardless of which channel the sale comes through. Export sales, whether wholesale to an overseas retailer or DTC to an overseas customer, are generally GST-free.
If you import stock, its landed cost, purchase price plus freight and duty, needs to flow through your cost of goods sold properly rather than being expensed as it's paid, since inventory sold this period and inventory still sitting on the shelf need different treatment. This gets more complex the more channels you're spreading stock across.
Buying stock in a foreign currency means genuine exchange gains and losses as rates move between order and payment, and these are real amounts that affect your result, not just a rounding issue. Xero's multi-currency functionality, set up properly, tracks this automatically rather than leaving you to reconcile it manually at year end.
The right structure for the work.
Running both a wholesale channel and a direct-to-consumer store generally means more complexity than a single-channel business: different pricing, different payment terms, stock spread across more than one place, and often import exposure on top. That combination tends to make a company structure worth considering earlier than for a simpler single-channel store, particularly once you've got real capital tied up in stock across multiple channels.
Run the work, we run the numbers.
Inventory or ERP software like Cin7 or Unleashed that tracks stock across your own store, wholesale accounts and any marketplaces, connected to Xero with multi-currency switched on, is what keeps a multi-channel brand's numbers coherent. We set this up so you can see true margin by channel, not just a combined number that hides which side of the business is actually carrying the other.
Frequently asked questions.
How do I handle wholesale vs retail pricing in my books?
Each channel generally needs its own pricing and revenue tracking in Xero so margin by channel stays visible, rather than one blended sales figure that hides whether wholesale or DTC is actually more profitable once costs are properly allocated.
What is landed cost and why does it matter?
Landed cost is the purchase price of your stock plus freight and duty to get it to you, and it's what should sit in cost of goods sold rather than the invoice price alone. Getting this right per shipment is what makes your margin numbers trustworthy rather than optimistic.
How does multi-currency work if I import stock?
Buying in a foreign currency creates genuine exchange gains or losses as rates move between when you order and when you pay. Xero's multi-currency functionality tracks this automatically once it's set up properly, rather than you reconciling it by hand.
Do I charge GST differently to wholesale customers?
Generally no, domestic wholesale sales are taxable the same way as retail sales, while exports to overseas retailers are generally GST-free. The channel doesn't change the GST treatment, the destination and nature of the sale does.
Should my wholesale and DTC business be one entity or separate?
Most brands run both channels through the one entity, with clean internal reporting to separate the numbers, rather than splitting into separate legal entities unless there's a specific reason to. We can model both approaches against your situation before you commit either way.
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