If you want to start selling on Amazon then you should know the costs that come with it. In this post we are going to talk about what are Amazon FBA business setup costs when starting out so you will have a complete overview of your expenses.
How much does it cost to start selling on Amazon?
I started my first Amazon FBA business with $2500 which I asked from a friend. I didn’t have any money myself. From that point on I’ve started a total of four Amazon brands and sold two of them. In this post I am going to share all the costs I’ve had when I have launched a new brand from scratch.
What are the costs when starting an Amazon FBA business?
I’ll bring out every small cost you need to know when starting an Amazon business. You can also avoid some of these costs if you are creative and resourceful. As you can guess I didn’t have any money when I started my first Amazon business. I was very resourceful and did a lot of things myself and asked for help from friends.
- Good product research tool (approx $100 per month). I use Helium10.
- Good keyword research tool (usually comes with a product research tool. For example Helium10)
- Ordering product samples from the factory (this could be $20-$50 per sample + shipping. Total approx $100 depending what samples you’d order)
- Designing product box (Custom box usually with an extra cost)
- Doing custom changes for the product (Price depends on the changes you are doing)
- Product inspection (Usually around $250-$500)
- Shipping to USA (depends on the size of the product and way of shipping)
- Tariff in the USA, Canada, UK or somewhere else (depends on the product category)
- 3PL warehouse in the USA (Only needed if you are using it. If shipping directly to Amazon then you don’t need it.)
- Designing product instructions, flyers or anything else that you’d like to include with your product.
- GS1 barcodes (approx $30)
- Amazon seller central account fee ($39.99 per month)
- Taking product images and video (budget plan $250-$1000)
- Designing Amazon product listing ($250-$1000)
- Trademark registration ($450 with Amazon IP accelerator)
- Enrolling in Amazon Vine ($200)
- Giving away 50 products for Amazon Vine (cost depends on the product)
- Amazon PPC ($3000 for the first 3 months. Min budget)
- Second Amazon order for inventory (You usually need to have cash ready for that because people usually don’t turn around their first inventory order with enough profit and as quickly as they think)
As you can see then there are a lot of things you need to think about when you start your Amazon FBA business. You don’t need to have all these expenses. If you are resourceful then you can get a designer for a very low rate. Maybe you know someone who can do these designs for you?
How to design Amazon product images on a tight budget?
Honestly one of the best ways to design Amazon product photos with a tight budget is with Canva PRO. We’ve designed multiple listing images with Canva PRO and it’s so easy to use, even if you don’t have any design background. They have templates for most the the design options. Check them out below.
What’s the minimum budget to start an Amazon FBA business?
I’d say the very minimum budget to start an Amazon FBA business is between $3000 – $6000. The final cost depends on the product and category where you are selling. With this budget you could easily sell cheaper items where product landing cost is around $2 – $5.
For example, for my first Amazon FBA brand my friend was doing Amazon listing designs for me and another friend helped me to take product photos. If you’d like to learn more about how to take Amazon product photos then also read this post here.
How to start an Amazon FBA business with a small budget?
The best way to start an Amazon FBA business with a smaller budget is to sell cheaper products or sourcing products locally (for example from the USA). If you source products locally you could make an agreement that you’ll pay for the products once you have sold them on Amazon.
Another way would be to sell through Amazon FBM (fulfilled by merchants). You could contact manufactures and wholesalers in the USA and sell their products. You only pay them once you have sold the product on Amazon. When customers make an order on Amazon, the factory ships the product to a customer.
How to find cheap products to sell on Amazon?
In my first Amazon FBA business I sold products that cost between $1-$3. That price included every cost (product, shipping from China to Amazon and customs). My selling price for these items were between $8-$12. So I made a very decent 30% margin after all the expenses.
To find these products you need to do proper product research on Amazon and look for products that are low priced and don’t have too much competition. We have written another post where we’ll talk about how to do product research on Amazon and what products to sell on Amazon that will guide you.
What are Amazon FBA business setup costs conclusion
As you can see there are a lot of costs you might have when you want to start your Amazon FBA business. A lot of these costs can be avoided or minimized if you are resourceful and creative. If you have any questions about Amazon FBA business setup costs then feel free to leave a comment below and send us a message.