How much does one really need to start a successful Amazon FBA business? I am certain every single one have asked this question before, which is why I’ve decided to take you through a realistic number before you even begin.
Disclaimer: This article is written from a perspective of going the route of the private label model or as I like to call it, brand building.
Fulfillment by Amazon (FBA) is one popular arrangement used by many Amazon sellers because of its convenience, flexibility, and minimum requirements.
When you start Amazon FBA, there is no need to design and spend enormous budget on marketing any website from the beginning. There are a tons of benefits to getting involved with Amazon FBA as outlined in this article.
This is as simple as letting Amazon take care of your product shipment. You rely on the e-commerce platform to fulfill your responsibilities as an Amazon seller.
To new sellers, let me walk you through the top essential items you need and some optional, but really good to have items to begin Amazon FBA.
Essential Items
Inventory
Let’s talk about the huge elephant in the room first. This item should be the most obvious one on the list as you do eventually need to spend money on inventory.
I know of “gurus” who recommend going in for $500 for inventory. Let me tell you what’s the problem with that. You will get out of stock real fast.
After selling that $500 inventory on a successful launch, then what? You’re going to then spend about $3,000 which will take about 1 month to reach Amazon to restock. by then, you will probably lose the honeymoon period (A period where new listings can get organic rank easily with initial sales volume) and spend a lot more in PPC to gain the rank again.
I would personally recommend about $3,000 to $5,000 to begin comfortably. This includes the shipping cost as well. This will give you buffer time to restock and gain momentum in the market.
What if my product is a dud? Then make sure you minimize the risk in the product research stage.
Advertising via Amazon Pay-Per-Click
This essential item is most commonly missed out in the tally for new sellers.
Yes, you’re going to need to advertise your product, if not how else will customers know your new listing exist?
Do commit at least 33% of the inventory cost to PPC in your initial launch. So this will take about $1,000 to $1,670.
UPC Barcode from GS1
When you a creating a listing, Amazon will ask for a UPC number. Read more about GS1 barcode if you are not sure what it is.
This cost about £119 per year for 1,000 barcode if you buy it from GS1 UK. That is my recommendation to help you save cost.
Sure, you can save money from another barcode site, but I personally don’t think its worth the risk for private label products. Amazon have been coming down hard on UPCs recently and they only recognize GS1 barcode officially.
Essential Item Cost
So the total tally for the essential items is about $4,150 to $6,820 to begin.
You: “What? No one told me that!”
Of course no one told you that because they have a course to sell you. Now, let us take a look at some optional items, but I still consider them important in your success!
Optional Items (But still important)
FBA Training
Sure, Amazon FBA can be done without paid courses and training. However, it is recommended that you undergo training first so you can be as efficient and productive as you can. Learn from proven mentors who have been there already.
The training doesn’t have to be somewhere else. You can have it while you sitting comfortably in your home. Amazon FBA traininng doesn’t have to be costly, you can always substitute it for knowledge from Youtube for free.
If you can afford it and I would recommend this route as it cuts short your learning journey, do invest in an Amazon FBA course. After so many course that I have reviewed, I still personally would vouch for this FBA course.
Trademark for Brand Registry
Another good to start ASAP is applying for trademark. I personally have worked with and written a review for Trademark Angel in my USA trademark application with USPTO. This route will cost you about $700 to get your trademark registered.
This is good to start early as the application process takes up to 9 months to get approval and this is a reasonably cheaper route compared to getting enrolled in the Amazon IP Accelerator program.
That program will easily cost you in $2,000 and above while giving you brand registry approval in as fast as 2 weeks. So if you got the spare cash, maybe you can go for it.
Optional Items Cost
This is a huge variable as different courses charges differently and depending on the route for your trademark.
The ball park figure for most people would probably by in the $2,000 for this if you want a number for your planning.