BlogSelling on Amazon

Starting an Amazon FBA Business | How Much Money Do You Really Need?

By February 7, 2020 March 16th, 2020 No Comments
 

Guide Contents

  1. Starting an Amazon FBA Business
  2. Costs To Sell on Amazon
  3. Inventory Costs
  4. Shipping Costs
  5. Graphics and Logo Costs
  6. Cost of Product Photos
  7. Advertising Costs
  8. Get Started With Even $500 To $3000

How Much Money Do You Really Need? – Starting an Amazon FBA Business

Hey there, I’m Mike McClary from Amazing.com and today we’re going to answer the question how much money do you really need in order to start selling on Amazon? Well in order to figure that out, you need to look at six different things.

Costs To Sell on Amazon

The first is how much does it cost to actually sell on Amazon every single month? And Amazon gives you two different options. They give you the individual account, which is free, you don’t pay any monthly fees, or they give you the professional account, which costs $39.99 a month.

Now for the free option, you don’t have to pay them anything every month but you do pay them every time that you make a sale, and that’s 99 cents per sale. With the professional account that costs $39.99, you don’t pay them an individual fee every time you make a sale. So if you do the math, if you’re gonna sell more than 40 products or 40 orders a month, it make sense to go ahead and get the professional account.

Inventory Costs

Now the next thing to look at is your inventory, and by far and away, that is going to be your biggest expense starting this business. Now there is no right or wrong or maximum or minimum that you can start with, Amazon doesn’t care.

It’s all up to you. You could start with as little as $500 in inventory if you’re really strapped for cash, or you just don’t wanna take a big risk, or more than likely, you’ll wanna start with around $2500 to $3000, and that’s what most of our students do. And the reason is, you wanna try to get between 300 and 500 units of whatever it is you’re selling. If you can’t get that amount, totally fine. We know lots of people who have been successful starting out with that less amount as well.

Just keep in mind that if you buy a limited amount of inventory with a limited amount of funds, you really have to take everything that you make, all the profits off of every single sale, and put it back in to bigger and bigger inventory orders, because that’s the only way you’ll be able to continue growing your business and growing the amount of inventory that you have. So either option works totally fine.

Shipping Costs

Now the next thing you need to look at is your shipping. Now normally, we include the shipping into the product cost. So if I say the cost for one my products is $5, when I say that, that includes what I pay the manufacturer and that includes anything in order to import that product to the country to sell it. The shipping fees and any kind of duties and taxes. But if you wanna try to figure out exactly what the shipping costs are, you can do that pretty easily by going to a site like freightos.com. They’re a completely free service.

If you know the details of your shipment, the size, the weight, how many units, they’ll give you not only just an estimate, they’ll give you a real quote of what it’s going to cost to import that product.

Graphics and Logo Costs

Now the fourth area to look at for where you may need to spend money would be on graphics and packaging for your logo. You have a lot of options here though. First off, if you have any kinda graphic skills at all, you could just do it yourself. We know a lot of people that start off that way, they start basic and they just wanna go out there and create their own graphics and not do anything fancy.

That absolutely is something that you can do and doesn’t cost you anything. Almost every manufacturer out there that sells products to people like us who are private labeling, they also do basic packaging for you. They’ll have templates and they might even be able to help you design your packaging and not charge you anything. It may not look absolutely perfect the way you want it to be or as customized you want it to be, but it’s a great first option as well. Now if you do wanna get some really good packaging done, you can also go to a site like 99designs.

It’s gonna cost anywhere up to $500, but that’s money well spent because these are professional designers and they specialize in packaging and logos and all kinds of professional products. There are two other sites out there, one is called fiverr.com. It allows you to go out there and find some basic service providers who do graphics and such, and you’ll spend anywhere from $30 to $50 maybe for them to help you with a design, or another site called upwork.com allows you to find freelancers who can specialize in all kinds of things, and one of them is graphic design.

Cost of Product Photos

Now the fifth thing you need to think about is your product photos. These are absolutely critical if you’re gonna have your product make a lot of sales on Amazon. But again, you have a couple options. Nowadays, smart phones take amazing photos, so there’s absolutely no reason at all not to have some really good photos that even you can take yourself. So if you don’t wanna pay for a professional photographer, go ahead, grab your smart phone, set it up in a nice clear, bright area and take some pictures and do your best at making it look as good as you possibly can. Now on the other hand, if you really wanna make your photos and your products stand out, you can hire a professional photographer.

They cost anywhere from $30 to $50 per photo, so you have to keep in mind, how many photos do you really want them to do? On Amazon, you can up to nine photos on your page, so you could spend nine times $50 per photo, so maybe $450 on a full photo package, but you don’t necessarily have to do that either. The main primary image of your product is the most important one, so if it were me and you’re starting out with limited funds, go ahead, have a professional take a picture, the main picture of your product, just one of them to use as your primary photo. Then you can start out taking pictures of the other photos on Amazon, numbers two, three through nine, and don’t pay anything for those, because again, that primary photo, that’s the most important one that shows up in the search results and that’s gonna get people’s attention

Advertising Costs

Finally, the last possible expense with starting your business on Amazon is advertising. You absolutely have to advertise somewhat to get traffic to your product. Just throwing it up on Amazon is not going to get people seeing it right away in order to start making sales, but it doesn’t mean it has to be expensive. If you don’t really have any funds for advertising, you can start off using friends, family and your social network. You can post on social media, whether it’s Facebook or Twitter or Pinterest or Instagram, talk about your new business and your product and try to get as many people liking and sharing it as possible to get exposure and traffic out there.

That could jumpstart your product right there in order to get some sales going. Now another way to get sales is to do something called Amazon Sponsored Product Ads. The great thing about these is while they do cost money, it’s not money out of your pocket. They simply deduct it from your balance, so every time you make a sale on Amazon, they’re adding money to your balance that they’re gonna pay out every two weeks, and so as you use advertising, they’ll just deduct the cost of that advertising from that balance.

Now once you started getting some sales and some traffic in from Amazon Sponsored Product Ads, if you want to, you can start looking at external ways of getting traffic as well, such as Facebook, Google AdWords, Twitter ads, Pinterest ads, and Instagram ads, and maybe even YouTube.

Get Started With Even $500 To $3000

So that’s it, and hopefully you have a much better understanding now of what it costs to actually start selling on Amazon and how you can get going for as little as $500 or spend maybe upwards towards $3000 to get plenty of inventory to really grow and scale your business. Now if you’re looking to start your own successful business leveraging the incredible power of Amazon, then check out the description below for some incredible free resources that we have. You’ll wanna check those out ASAP. Thanks for watching this video, and I look forward to seeing you soon. By the way, are you wondering what to sell on Amazon to make money? Don’t miss out on these 5 easy rules.

Don't miss out!
Subscribe to Get FREE Amazon FBA Tips Straight To Your Inbox!
Invalid email address
We value our relationship with our community and your privacy. 

Ready To Join The Amazing Selling Machine?

The only thing standing between you and your own business is you.

Amazon is a billion-dollar marketplace, with room to grow and room for you to make your mark.

Start today!