This is How Much Money You Need to Start an Amazon FBA Business in 2022
It's The Zab Twins, back with another comprehensive guide on carving a successful Amazon FBA business by learning exactly how much you'll need to get started.
But before we dive into the nitty-gritty of budgeting your startup, let's tell you why you should trust us!
It's simple: The Zab Twins are professional Amazon coaches helping you take your business to the moon! We are the perfect combination of creativity and analytical skills, giving you out-of-the-box ideas and marketing advice to unleash the potential of your Amazon FBA business.
In this article, we guide you in avoiding all the unnecessary costs while setting up your Amazon business. We help newbies and struggling entrepreneurs on their journey to ensure success from the onset.
So, let's get down to business!
What Does It Take to Start Selling on Amazon FBA?
If you're new to Amazon FBA, you might wonder whether it costs money to start selling.
In one word: yes.
Like any other serious business, Amazon also requires upfront financial investment, time, and energy to provide results. However, selling on this platform includes much lower startup costs. That's because Fulfilment by Amazon allows you to delegate time-consuming and expensive tasks that a typical e-commerce operation requires, including shipping and storing products.
But the real question you need to ask yourself is, "how much do you need to launch your Amazon FBA business the right way?" While 69% of sellers reveal they started their business with $500, 16% began with less than $500. So, how much should you set aside?
Here we've broken down the cost of launching your business on Amazon FBA:
P.S. If you're not a fan of reading, you can watch the video format of this blog here.
Setting Up Your Infrastructure
The first cost you must factor in is the one required to set up your business infrastructure. But why do you need one?
That's because choosing an LLC or Corporation gives your business a separate legal identity, distinguishing it from your assets. That means any issues with your business will not impact you personally.
Now, this legal protection can cost only $150 if you do it yourself. The best part? Setting up an LLC or Corporation using LegalZoom or official registry websites is effortless.
Acquiring Your Product
The second cost, and the most expensive one, is acquiring a product that matches the needs of your ideal customer.
Once you find the correct item (ideally by using a specialized tool like Helium10), you can place an order to test its quality. Typically, sampling products require up to $150, costing between $5 to $50 per sample. But you can save money by learning negotiation tactics.
After testing two to three products from different products, you can easily compare and judge quality to find the best fit for your target market. Once you're confident, it's time to invest in bulk inventory.
Suppose you find a garlic press for $1.60 per 10 units on Amazon---if we use a private label approach and add the cost of packaging and branding to make our product stand out, the price increases to $2.00 per unit. Multiply this number by 500 units, and the total expense reaches $1000.
After that, you'll have to consider the cost of shipping your product from China to the U.S. Typically, delivery charges are 20% of your inventory. So, continuing with the above example, 20% of $1000 equals $200.
Pro tip: you should create a virtual bank account by using safe, reliable, and free websites, such as Wise. That way, you can hold, receive, send, and spend money, whether paying a supplier or transferring money to your local bank, while enjoying the peace of mind that your money is secure and free of interest.
P.S. use our discount code “THEZABTWINS6M20” or “THEZABTWINS10” to find an in demand product quickly and effectively, without emptying your wallet!
Creating a Product Listing
The next cost you need to consider is product listing.
Creating an optimised, attractive product page is key to increasing traffic and conversion by ensuring your listing appears higher in search engine results. Moreover, it provides your products better visibility by helping you rank for competitive keywords.
For this, we recommend using FBAStudio's $1500 package to meet all your branding, photography, and product listing optimization needs.
Additionally, you can boost sales by vide and split testing your products with ProductsPinion. That means no more second-guessting, only making data-driven decisions!
Getting Ready to Launch
Now, it's time to launch your first product line!
Typically, this costs 10% of your projected revenue, i.e., the amount you plan to make.
For instance, if we start selling our garlic presses for $15, 500 units will give us $7500. Since we're spending 10% of the projected revenue, the total cost of launching becomes $750.
But before you finalize the cost of a bulk order, remember to run a rigorous inspection. For this, you can connect with a qualified and renowned third-party inspection team like Movely, who’ll provide you an in-depth report of your product and whether it’s worth your money.
Bonus: Click on our link to get a free ebook full of secrets to source and reorder quality products successfully!
Total Cost of Starting an Amazon FBA Business
Now, if you add up the individual costs, you'll find that the money you need to start an Amazon FBA business in 2022 is only $3500!
Ways To Cut Costs when Launching Your Amazon FBA Business
Here's a secret: you can kick-start your Amazon FBA business for less than $3500.
Want to know how? Lucky for you, that's exactly what we're about to tell you!
Outsourcing Services from Fiverr
While FBAStudio does provide high-quality results, it's also pretty expensive. Using this premium-based service can be a big red flag for someone on a budget.
Therefore, we recommend trying Fiverr to hire qualified freelancers offering the same services for comparatively less.
Launching Your Product through Influencers
Another area you can cut costs is by launching your products.
Typically, you'll have to allocate $750 for your first launch if you're using Amazon's advertising platform. But if you work through influencers, you can save significantly more money as buyers purchase from them.
You can also tap into communities and other free resources with warm traffic to cut advertising costs completely.
The Bottom Line
Launching your first product on Amazon can be scary and exciting. But it's important not to get caught up in the excitement and hurry the process. Instead, focus on investing the time, energy, and money necessary to enjoy visibility and grow traffic.
After reading our guide, you probably know the individual and total cost required to start selling on Amazon FBA. But before you go, we want to ask you: will you spend $3500 or try the tricks we discussed to cut costs?
To be successful on Amazon, you'll need to make a budget, follow the right approach, create attention-grabbing listings, and ensure an excellent customer experience. If unsure where to start, you can always reach out to The Zab Twins by scheduling a call here!