I get this question all the time:
How Much Money Do I Need To Start With Amazon FBA?
So let’s talk numbers! What are the real startup cost of running a FBA business? I will go over this FBA checklist with all the cost involved of starting an Amazon Business.
There is a huge range in the amount of money people spend on their start up. Some people start their FBA business while they are in college and barely have any money. Other might be living very comfortably and can afford all the essentials for their startup.
If will first cover all the investment you need to do on all required steps ( Product Research, Manufacturing & Shipping ). And later will go over any additional cost that you can choose to skip ( although I don’t recommend this.
Step 1: Product Research
IMO a product research tool is 100% necessary to pick the right product. Picking a product without using all the data that is available out there is a great setup to fail. I use Jungle Scout as they are the market leader and the absolute top when it comes down to doing market research. I have written a review about JS here, and a guide about product research here.
Step 2: Samples
Yes it is possible to skip samples when you are doing small orders. Although it is definitely not recommended, as your supplier can really screw you if you don’t check the quality of the product beforehand.
Step 3: Products
Minimum amount of units: 500. The cheapest product I ever sourced was $1,30. So if I would have to start with the bare minimum I would order 500 x $1,30 = $650 worth of units.
Step 4: Shipping
Shipping depends a lot on size of the product. But as an example we will take a garlic press. Per unit this roughly costs around $0,80 per unit to ship by ocean freight. 500 x $0,80 = $400
Minimum cost to start with Amazon FBA: $1199
The first year I did Amazon FBA I never used an inspection company. And I was doing fine until the supplier screwed me and my profitable product failed. From now on I ALWAYS have my products inspected by an inspection company.
Filing for a TM yourself ( it’s pretty easy to do ) will cost $225. However, if you are just starting out you can wait until you know for sure your product is profitable, and you want to continue with your Amazon business.
The downsides of not owning a trademark:
- People can use your brand name & copy your exact product. They can even register your brand name as a TM before you, pretty much stealing your brand. So make sure you register a trademark as soon as you notice your brand will be successful.
- No access to Early Reviewer Program.
- No access to Enhanced Brand Content.
Designing your packaging is something you can do yourself if you are strapped for cash. Maybe you know a friend who is really good with Photoshop that can help you out with some basic designs. This is how I started out as well. But since a nice design is a major way you can stand out from the competition, I will now gladly pay a professional designer to do this for me.
Pretty much the same goes for product photo’s. Everybody has a camera on their phone that is capable of taking decent photo’s. It will nowhere as nice as a professional photographer, but it will get your started for $0. However, if you are serious about this then I say that is absolutely essential to have pro photo’s.