One hesitation that most people have when starting an Amazon FBA business is they ask how much does it cost to sell on Amazon? That's a good question. And you'll likely find a wide range of answers. However, if you're serious about making money online, and you really want to know how much it costs, tune in to the video.
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If you're looking to start a business selling products on Amazon, then you'll need to know and understand all the costs associated with it and when these costs will likely occur. Yes, you can start making money selling on Amazon, regardless of your experience selling online.
Amazon is one of the best opportunities to make a passive income and earn money from anywhere in the world. Gone are the days of directly exchanging your time for money. That's the old model. The new model leverages the incredible opportunity that the internet affords us.
Whether you want to make money working from home, or just want a side hustle, understanding how much it costs to start selling on Amazon will give you the upward momentum you need to launch your Amazon private label business today!
The best part about selling on Amazon is that the retail giant does all the work for you. You'll never have to pick or pack or ship a product, ever. Gone are the days of dealing with fulfillment or customer service requests. Amazon does it all for you. All you do is collect the income.
But in order to get there, you need to get on the road to building your Amazon FBA business today. Tune into the video now to discover just how powerful of a passive income machine Amazon can be and how you can start making money from it no matter where you live in the world!
How Much Does It Cost To Sell On Amazon? - Video transcript
Hey guys and welcome back to my channel. In todays video I would like cover how much it actually costs to sell on Amazon, so be sure to watch all the way through so you don't miss any of the important details as we do have a lot to cover.
Now, before I hop into this video, if you are new to this channel you're going to want to subscribe as I talk about the best ways to make a full time income with Amazon FBA and always get straight to the point.
So please consider subscribing and turning on your post notifications if you like channels that don’t waste your valuable time, with that said let's get right into this video.
Now, when we talk about selling on Amazon, the focus is often on how much money you can make. And while it’s true that an Amazon business can be extremely profitable, there are also expenses you have to consider.
The cost will vary depending on your business plan, but either way, you’ll need to have some money set aside in order to get things up and running. So, just how much will you need? This video will fill you in on all the costs you can expect to encounter while selling on Amazon.
Now, there are a number of expenses associated with an Amazon business. Some are obvious while there are others you may not have been aware of. So let’s go over all the costs that you’ll have to pay in order to be an Amazon seller.
The first expense is your inventory. This one is the most obvious. In order to sell products on Amazon, you first need to acquire items to sell. And unless you somehow get lucky and are given a large number of products that can be resold you’re going to have to pay for them.
There are a number of ways you can purchase items to sell on Amazon. The first one is retail Arbitrage. This strategy involves visiting local brick and mortar stores and looking for items that are on sale or clearance.
In many cases, you’ll find products that are actually selling for less in stores than they are on Amazon, allowing you to resell them for a profit.
Your second option to purchase your products is from wholesalers. These businesses act as middlemen between manufacturers and resellers.
They buy large quantities of products at a big discount which they then sell to other businesses. With this strategy, you’ll end up paying less per product than retail arbitrage, but you’ll have to buy in bulk which can end up costing you more.
The last option is to buy straight from manufacturers. To get the cheapest price per product you can go straight to the manufacturer. Buying from the manufacturer also means you can ask them to make alterations to products, or create a completely new product based on your ideas. However, like buying from wholesalers you’ll need to purchase in bulk.
If you’re starting with a small budget, retail arbitrage might be the best option for you. You won’t face any minimum order quantities, which means you can just buy a few products here and there while you get comfortable selling on the platform.
For those who are willing to invest more in inventory, buying from wholesalers and manufacturers will be more profitable. Your sales margins will be a lot better and this strategy is more scalable.
However, since you have to buy large amounts of products at once there is a little more risk, so do your research and be sure you’re buying products that are in demand.
So, how much will your inventory cost you? That really depends on what you’re buying and how much you’re buying.
If you’re just purchasing a few items from your local store it could be less than $100. However, if you’re buying in bulk from suppliers expect to pay anywhere from 500 to $5000, depending on your cost per item and your order quantity.
The second expense will be your shipping cost. This is one expense you might not have considered. If you’re buying your inventory from wholesalers or manufacturers you’re going to need to have those items shipped to you, or shipped to one of Amazon’s warehouses.
If you’re dealing with domestic companies then this will be a pretty small expense, likely less than $100. But if your products are coming from overseas things can get rather expensive if you’re not careful.
Now, when shipping your inventory from another country you have two options:
The first option is shipping by boat. This is a very inexpensive way to get your inventory into the country. However, it’s extremely slow. Expect to wait 4-6 weeks to receive your items. If you need to get your products right away then you might have to look into the next option which is shipping by air.
This method is much faster. With airfreight, you can receive your products in as little as two days. Of course, in most cases shipping by air will be more expensive, so you’ll have to weigh that against the money you’d save by sending them via boat.
If you’re using the Fulfilled by Amazon program to sell your items you’ll also have to consider the cost of shipping to Amazon. You may decide to simply have your supplier ship directly to Amazon, or if you’re in possession of your own inventory you’ll have to pay to have it shipped to them yourself.
Like inventory costs, shipping costs will depend largely on quantity. The more you’re shipping the more it will cost you. The size and weight of your products also make a big difference, so keep that in mind. If you’re shipping items from overseas you can expect to pay anywhere from $300 to several thousand.
Let’s talk about the third expense which are your Amazon Fees. Now, Amazon doesn’t just let you use their platform for free. They charge you for this service so be prepared for that. So let’s cover the fees you’ll pay.
When you setup your seller account you’ll have the choice between an Individual Seller account and a Professional Seller account. Individual Sellers don’t have a monthly fee but pay Amazon $0.99 for every sale they make. Professional Sellers pay $39.99 per month but don’t have any transaction fees.
Now, in addition to charging you for your account, Amazon also takes a cut of each sale you make. The percentage they take depends on the category you’re selling in and ranges from 6% all the way up to 45%.
The FBA program allows you to ship your inventory to Amazon to be stored in one of their warehouses. When you make a sale they’ll ship your products for you. In order to take advantage of this service, you have to pay additional fees. Storage fees are $0.48 up to $2.40 per cubic foot, and fulfillment fees are between $2.92 and $137.32 per unit.
So make sure to account for these costs when considering how much to sell your products for. You need to make sure that you have enough money left over after each sale to still make a profit.
This last expense is optional, but if you want to get the most out of your Amazon business you’ll likely want to pay for advertising. Buying ads increases the exposure of your products, helping you generate more sales. They’re also a great way to promote new items on the platform.
Amazon advertising costs depend on your budget and the amount of competition there is for the keywords you’re targeting. On average you can expect to pay $0.81 per click. You can set a limit on how much you pay per day, but the minimum spend is $5 per day.
As you can see, there are a number of factors that can impact how much you’ll end up paying as an Amazon seller.
Now, let me give you some tips to help you keep your costs down. There are a number of ways to help you reduce your costs. So here are a few tips to help you save money as an Amazon seller.
First. buy cheap goods from China: You’ll find that the best prices on products are from Chinese suppliers. Alibaba is arguably the most popular place to purchase inventory and has some great deals. You’ll likely have to buy in bulk, but the low cost per product will be worth it.
Second. Sell small and light Items. If you’re looking for a way to save on shipping try selling products that are small and light as these are cheaper to ship. Steer clear of heavy products as this can often triple your shipping costs.
Third. Sell in Categories that have lower referral fees. Stick to categories that have a referral fee of 15% or less.
Tip number four is avoid buyer fraud. Be on the lookout for scammers who will try to take advantage of you and get items for free. Contact Amazon immediately if you think you’ve been scammed by a buyer.
Remember, by keeping your costs low you’ll ensure your profits remain high, so do everything you can to cut your expenses.
An Amazon business does have a number of fees and costs involved. However, even after all these expenses there’s still an opportunity to make some really good money. And by being aware of how much it costs before you get started you’ll be able to plan ahead and come up with a profitable business plan.
Now, as you can see, there are a lot of steps involved in building an Amazon business. And I wouldn't recommend piecing together everything that you need to learn by simply watching videos on YouTube. This is why I suggest investing your time in a great free training that can guide you through this process.
I recommend this training because this is the best training on the market and one that I have personally gone through. They walk you through step-by-step, every aspect of what it takes to start grow and scale your Amazon business.
This training will build off of what I talk about inside my videos so I left a link for you in the description and if you're serious about selling on Amazon I encourage you to check it out!
Thanks for watching and please make sure to watch the next videos with more Amazon FBA tips that will show up right about now.