How much money should I save to start an FBA business on Amazon?
As we all know that Amazon has gained immense popularity and become the most largest and influential online shopping platform in the world. It is because it extends a helping hand to many new entrepreneurs extremely well so they have little to no trouble getting their businesses off the ground.
In India Amazon is one of the top e-commerce platforms in India where you can sell products online. You can sell a variety of products on Amazon like Beauty, Baby Products, Books, Cameras, Video Games-Consoles, Electronics Accessories, Mobile Accessories, PC Accessories, Jewellery, Luggage, Kitchen, Mobile Phones, Movies, Music, Personal Care Appliances, Personal Computers, Toys, watches, etc.
New entrepreneurs start small and slowly invest more money into their Amazon FBA business once it starts becoming more profitable. You have a general idea that it may require lakhs of rupees to start selling on Amazon, but trust me it is not like that. But if you want to start your Amazon FBA business for a minimum amount, all you need is to understand the process and how to take calculated risks with money.
As per a survey, about two of five Amazon businesses that start with an investment of less than $10,000 were successful. On average, new FBA sellers spend $2,000-$4,000 launching a new product; which in comparison to traditional business is very little. In this article, get an idea of how much money you need for your first product, what additional costs you could incur, and additional costs that may appear as your business grows.
- Inventory Costs
The most important thing to look at is your inventory, and by far and away, that is going to be your biggest expense in starting an FBA business. Now there is no maximum or minimum that you can start with, Amazon doesn’t care. It all depends upon you. You may 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. For your Amazon business, your inventory costs will be the most important upfront investment.
- Shipping Costs
Then the next thing you need to look at is your shipping. Now normally, people include the shipping into the product cost. If you know the details of your size, the shipment, the weight, and how many units, they’ll give you not only just an estimate, they’ll provide you a quote of what it’s going to cost to import your product. The shipping cost is totally dependent on how quickly you want to get your product to Amazon. Depending on several variables, the total cost of product shipping and manufacturing can be anywhere between $1000 – $3000.
- Graphics And Logo Costs
Now another area to look at for where you may need to spend money would be on packaging and graphics for your logo. You can get a lot of options here though. A lot of people that start off that way, start basic and they just wanna go out there and create their own graphics and not do anything fancy. That absolutely depends on you what you can do and doesn’t cost you anything. It’s gonna cost anywhere up to $500, but that’s money well spent because these are professional designers and they specialize in logos and packaging and all kinds of professional products.
- Cost Of Product Photos
Next is that you need to think about your product photos. These are very significant if you want to make your product make a lot of sales on Amazon. But again, you have a couple of options. Nowadays, smartphones take amazing photos, so there’s absolutely no reason at all not to have some really good photos that even you can take yourself. If you really wanna make your products and photos stand out, you can hire a professional photographer. They cost from $30 to $50 for each photo. Having quality product photos will be vital to driving the most sales and getting customers’ attention.
- Advertising Costs
Finally, the possible expense of beginning your business on Amazon is advertising. You have to definitely advertise somewhat to gain traffic to your product. Just throwing it up. If you don’t sufficient funds for advertising, you can start off using friends, your social network, or family. You can post on social media, whether it’s Facebook, Pinterest or Twitter, or Instagram, talk about your new product or business, and try to get as many people to like and share it as possible to get exposure and traffic out there.
- Product Cost
This cost will be negotiated with your supplier. You need to work with your supplier to ensure that you are comfortable with what you are giving and also that you are making money. You need to plug in a few different numbers into the profit margin to watch what gives you the best profit margin and what price is negotiable; this will let you know if this is a product that makes sense to sell or if you need to find a different supplier or product.
Overall, your FBA costs can be as much or as little as you can afford. You can start investing with a small amount and test the product to see if it’s worth investing more in, or you can invest more money initially and experience faster growth. You have the opportunity to start small and make improvements to your product or listing as you continue to grow, and this will let you start the FBA business in a way you can afford to.