What expense category is Carro?
Collaborative commerce and dropshipping platform connecting e-commerce retailers with suppliers to list and sell products without holding inventory.
Carro is a B2B collaborative commerce platform designed for e-commerce businesses, enabling retailers to virtually access supplier inventory and sell products without upfront inventory investment. The platform includes over 1 million products from DTC brands and charges a 5% fee on new sales generated, plus optional monthly subscription plans starting at ~$50/month. Features include AI-powered merchandising, influencer partnership tools, campaign management, and analytics. Note: the 'Utilities' category in the source data is a misclassification — Carro is a SaaS/marketplace platform. Subscription and platform fees are deductible as ordinary business expenses.
How businesses classify Carro
Tax details
- Carro's monthly subscription fees are fully deductible as ordinary SaaS business expenses under IRC §162.
- The 5% transaction fee charged on sales generated through Carro is also a deductible cost of goods sold or selling expense — ensure it is coded separately from the subscription fee in your books.
- If Carro fees are directly tied to generating revenue (e.g., enabling dropship sales), they may be classifiable as cost of revenue rather than G&A — coordinate with your accountant for proper classification.
- Retain monthly Carro invoices and transaction reports to substantiate both subscription and per-transaction fee deductions.
- If your Carro usage spans both business and personal e-commerce activity, allocate only the business-use portion for deduction purposes.
Business insights
Related expenses
For illustrative purposes only. Results shown are estimates and not guarantees. Based on internal metrics. Past performance does not guarantee future results, which may vary.