if you’re looking to get into Amazon FBA, or you already have an Amazon FBA business, and you’re looking to grow it, you’ve come to the right blog.
Okay. So I’m going to run down on all the costs that you need in order to get started with Amazon FBA. The first thing you want to do, is you need to register a business. Now, this could cost you $0 or it cost you on average $127. So let me explain, if you want to create a sole proprietorship, that’s where you are doing business as a fictitious name, so Rya doing business as ABC Company. Now, there’s really no protection in that model as a sole proprietorship. If there was something that happened with your product, somebody could sue you personally. Now one of the advantages of starting an LLC or a corporation is that you have that protection in place. So if somebody sues you, they’re suing the business and not you personally. Now, it does cost to register an LLC, and across all 50 states in the US, the average price is $127 to start an LLC.
Amazon Seller Central account.
The next thing you’re going to have is the Amazon Seller Central account. That’s $39 a month to get started with that. Then you’re going to need to do product research. You got to figure out what product you want to sell on Amazon, and there’s software that’s involved there. The two most popular pieces of software are Jungle Scout and Merchant Words. Now Jungle Scout is a Chrome extension where whenever you browse Amazon, and you’re looking at different search terms, say like garlic press, and you want to see is this competitive? Is there enough demand here? You can use Jungle Scout to do that. Jungle Scout is a one-time fee of $97. They do have a web app that gives you even more insight into how to select products, and that’s $29 a month.
Now, Merchant Words gives you search volume on different search terms. For example, if I’m looking to sell garlic press on Amazon through Amazon FBA program, I want to know how many times do people search for the word garlic press? Is it 10 times a month or is it 100,000 times a month. Well Merchant Words will give me that information and let me know about how many people per month are searching for that exact term on Amazon. So you combine that with Jungle Scout and you have a winning formula to select products that will sell on Amazon.
Now, the next thing you want to do is you’re going to need a logo. You’re going to need a domain name, web hosting, and a logo because you’re creating a company, a real brand here. So a logo you can get created on a website called Fiverr.com. That’s F-I-V-E-R-R.com. The average price there is around $35, and that will get you several revisions to get you the logo you want.
Next, you’re going to have cost from GoDaddy, which to registered a .com domain is around $11.99. Sometimes you can get it for a little bit cheaper, $9.99 or even $7.99 depending if they’re running a promotion, but normally, it’s $11.99. The next thing you need is once you have that domain name, ABCcompany.com, you need a place to host it. So you’re going to need to get hosting. And a popular platform for that is called BlueHost where they charge $2.95 a month in order to host your domain.
Next, whenever you send product to Amazon, you have to put labels on it. So every product needs a UPC label. And you can get a UPC label from SpeedyBarcodes for only $5. Then you have product sample. So once you find a manufacturer, somebody who is going to produce your product, you need to get a sample of that. And usually they charge you the air shipping to send it from China or wherever it is in the world to your house in the US. And the average cost there is anywhere from $30 to $50. So we’re saying $40 for that.
The next part is when you actually get your first product sent to Amazon’s warehouses, you want to get a product sent to your house too with your logo on it. You want to get the final product because you need to take pictures of it so you can put it up on Amazon. And you can take great pictures with just your iPhone and a light box kit. Now, these light box kits are available on Amazon for $39.99 where it’s a square box of white cloth, and then you have lights that illuminate it from either side, and then you can put your product in the center, take some pictures of it, and you get outstanding pictures with a white background that meets Amazon’s guidelines for a main picture.
Finally, the most expensive part of starting up on Amazon, is the actual product. Now, the average price of all the products that I sell on Amazon is $2.37, and that includes shipping. I have products that range from as low as a $1 up to $4.50, but the average price is around $2.37. So we’re going to use that as an example.
So when you contact the manufacturer, normally, they want you to order 1,000 units. But a lot of the times you can get away with ordering just 500 units to start. So if you order 500 units, at $2.37 on average, that’s the cost of the product, plus the cost of shipping from the manufacturer to Amazon’s warehouse. That’s around $1,185. So if you add all of these costs up, your initial up-front fees to get started selling on Amazon, your business, the Amazon Seller Central account, The Jungle Scout web app, everything that we just talked about is a little under $1,500, so $1,486 to be exact. Then you’re going to have recurring monthly fees. And those fees are right around $72, $71.95 to be exact.
So hopefully, this gave you some insight into the process on how much it costs to get started on Amazon, and if you want more information and you want a getting started guide, I’ve created one, just click on the link in the description below. It will give you all these costs laid out for you, and it will step you through all the different things that you need to go through in order to sell on Amazon at a very high level from product research, to sourcing your product, to product launch, to managing your product, inventory control, all those things. So take a look at that. A lot of great information in there, and we’ll see you in the next video.