Last Updated on July 14, 2022 by andrewtk
How much money do you need to start Amazon FBA?
Well, one of the main reasons selling on Amazon has got so popular, is because it doesn't cost an absolute fortune to get going.
The thing is, that while it would be great if you have $5,000, or even $10,000 to invest in your start-up…
…I reckon you can probably, just about, get out the gates for $1,000.
Some people even do it for less than that!
And, if you're prepared to work well into the evenings, you can keep the day-job check rolling in, and start your Amazon FBA business as a side-hustle.
Start small, and re-invest back into your business as you get better at what you're doing.
Let's take a look…
- How Much Money Do You Need To Start Amazon FBA?
- Amazon FBA Business Essentials
- Can You Start an Amazon FBA Business With No Money?
- Wrapping it Up!
How Much Money Do You Need To Start Amazon FBA?
Amazon FBA Business Essentials
Even though we're looking at how to bootstrap this whole thing, there are a few areas when getting started with Amazon FBA…
…where you're simply going to have to spend your dollar.
Here are your essential, essentials…
Your inventory (the stuff you're actually going to sell) will be the foundation of your Amazon selling business.
How much you invest in inventory will partly depend on what your chosen Amazon FBA business strategy is going to be.
The Private Label strategy is likely going to suck up significantly more capital for inventory, than the Retail Arbitrage strategy.
What you choose to sell, how much you pay for it, and how much you sell it for, will be the make-or-break factors.
If we're sticking with how much money you need to start and Amazon FBA business being $1,000…
…and if you're starting out with Retail Arbitrage…
…then you need to allocate $500 towards your first round in inventory.
Always make sure you are pricing fees in, whenever you are thinking about what to sell.
Understandably, seeing as your products will be stored in their warehouses, and orders fulfilled by their staff, Amazon charge FBA fees.
As soon as you have some ideas for inventory, be certain to put them through the Amazon Seller App and/or the FBA Calculator…
…to check it's possible to actually make money selling them.
Tools / Resources
I would say that if you're going to start selling on Amazon, with the Retail Arbitrage model, you definitely want to have the following tools and resources available:
- Computer & Smart Phone – hopefully you already have these;
- Scanning App – Amazon Seller App is free;
- Printer – for printing shipping labels and product labels;
- Scales – for weighing what you're sending to Amazon;
- Boxes – must be clean and in reasonable condition;
- Packing Tape – for sealing the boxes you're sending to Amazon.
Providing you do already own a computer and smartphone, and maybe a printer, you're looking at somewhere in the region of $100 for everything else.
Whether you take an FBA training course or not is entirely up to you.
You can totally learn as you go along, if you're really looking to save as much money as possible.
Personally I would say that it's money well spent.
A top FBA training program can save you a lot of money in the long-run, and it can speed up your time to profitability.
If you're looking only at Retail Arbitrage as your strategy, and you're really looking to get lift-off for as little outlay as possible, you could just about get away with the above costs.
But…if you're looking at going with Private Label, you're going to need to budget for the following as well…
When researching a Private Label product, getting samples is absolutely essential.
It's really tempting to skip this part, because it all just seems like additional time and money.
Skip getting your hands on samples at your peril!
You can apply a very general estimate that each round of samples will cost you about $100.
$100 very well spent!
Most Amazon sellers tend to include shipping costs, duties and taxes into their product cost.
So when they talk about a products cost per item being say $10, they're already including not just what they pay the manufacturer, but also everything else in order to get the item imported.
You can work out your shipping costs by going to freightos.com. They’re offer a free estimate, so long as you know stuff like the size, the weight, how many units etc.
Product photos tend to cost in the region of $35 to $50 per photo.
If the budget simply won't stretch this far, you're going to have to make up for it by putting in the time, and taking some great shots with your smart phone.
Plenty of new FBA business owners start out taking their own photos.
Just make sure you put the effort in to making them look sharp and appealing.
Graphics and Logo Costs
Having a logo certainly adds a layer of professionalism to your brand so it's well worth doing.
But seeing as we're focused on bootstrapping our Amazon start-up, this is another area where you can get involved yourself, and produce your own logo for your Private Label brand.
Keep it nice and clean, nothin too fancy. All the best brand logos re pretty simple.
Promotional Giveaways / Deep-Discounts
You don't have to do this, but it's a loss-leader used by a lot of FBA sellers.
Many sellers apply a deep-discount to any new products they launch on Amazon.
This gets some early sales in and that helps Amazon to identify your product as a good match to the search keywords.
This is another potential expense that you don't have to go to if the purse strings won't initially stretch that far.
As your deep-discounts and promotional giveaways cause an increase your products organic rankings, you may want to think about running a sponsored ad campaign.
This can give your sales a quick boost.
But make sure you take care of your add budget. it's very easy to get drawn into gradually increasing the daily limit.
Always set a monthly maximum spend and set your daily limit accordingly.
Can You Start an Amazon FBA Business With No Money?
That won't be possible.
Your only chance is if you are able to put together a compelling FBA business plan and then persuade someone else to put up the working capital for a share of the new business…
…or any other arrangement that enables you to launch with their money, if you really are silver-tongued enough.
Good luck to you if you can pull this off.
But the reality is that if you are serious about getting started with Amazon FBA, you're probably going to need to stump up somewhere in the region of $1,000.
Wrapping it Up!
The Amazon FBA opportunity is nothing short of amazing.
The opportunity of a lifetime even!
Hopefully the estimated $1,000 to get going isn't too much to put you off getting started.
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