How Much Money Do You Need To Start Amazon FBA In 2019?Jun 09, 2021
What's up guys, Dan here? In today's video I'm going to talk about exactly how
startselling on Amazon and
starta successful and profitable FBA business. Many of you may be confused. about exactly how
needto start selling on Amazon and I was definitely confused when I started a few years ago on Amazon FBA and you know it could be $1,000 $2,000 or maybe you might think it's even $5,000 and for some of you Surprisingly, it could be a lot less than you think and for some of you it could be a lot more than you think so I'm going to break down all the costs for you and I'm going to go ahead and basically talk about all the costs that I need to take into account all the tools that you need and everything that you basically need to expect in terms of starting a successful Amazon FBA business, so let's go ahead and go right to my computer and I'll show you all the numbers.
moneydo you need to start selling on Amazon FBA in
2019? So I'm going to break it all down and I want to start the video by saying that in
2019this year there are more opportunities than ever to start an online sale. business like starting to sell on Amazon and the reason why I say that is because when I started a few years ago with Amazon FBA I also knew and also recognized the fact that it was the best time to start, you all have heard the saying that The The best time to start was yesterday, but the second best time to start is today and you can't be more true than that and let me tell you, sometimes you might feel discouraged, you know, you might think, "Oh, my whole business is discouraging." it's hard, I've never done it before I don't know about this whole ecommerce thing I don't know about Amazon FBA let me tell you I was in the exact same position as long as you follow the right information and as long as you achieve it you will succeed point blank there is just no otherwise there is no other option this is how business works this is how life works right to get what you want you must deserve what you want is one of my favorite sayings but right now there are more opportunities than ever to get started and that doesn't matter how much money you have to start whether you have zero complete zero or a thousand to 2000 or even 10,000 more you don't need 10,000 more I would say it is optimal The amount here in this video that you will see is between one thousand and two thousand dollars, even if you have zero , you can start working to get started on Amazon, if you think Amazon FBA is, you know it's your business the way you want to do it.
If you get it and you'll be successful, then you should start, you know, wherever you are. When I started Amazon FBA to save money for my first product, I was actually cleaning windows and started knocking on my neighbors' doors. and I started, you know, cleaning windows and I was making about $100,200 per house and I'm not telling you to go out and clean windows, but what I'm saying is if you have zero dollars right now, start off right. So you know, maybe you put in a little work or you just know that you can also try retail arbitrage on Amazon, so I'm not going to talk about that in this video, but as long as there's a will, there's a way, so let's go. look at an example of costs and how much money it takes to get started right, so here I broke it down and this is based on years of sales, this is based on probably seeing 200+ invoices, 300 voices for different supplier products, so this it's like a realistic amount here, these are all realistic amounts especially for the unit cost of the product here and this doesn't matter where you start from whether it's the US, Canada, Europe or even Asia, so let's say for a product and By the way, When you start with Amazon FBA, you will order between 250 units. 500 units could be maybe 750 units or a thousand units, although I wouldn't recommend ordering a thousand units at first.
I would recommend ordering maybe 250 or 500. but the initial cost of your product will be at first your product, including shipping, and for this example here I took the average cost of, let's say, 2 to 3 dollars or 3 to 4 dollars, five, four to five dollars. product here I would say this scenario applies to most beginners selling on Amazon. You might find a product that costs a dollar a piece including shipping, although you probably won't be able to sell it on Amazon for more than 15. but here with this example it's extremely realistic because I would say that most of you watch this video, so Let's say your product costs $3 and six sets including shipping, and that's DDP air shipping to the US or Europe, now the DDP is delivered duty paid.
What that means is that basically your supplier and freight are the shipping company, so if FedEx or DHL takes care of the duties and customs for you and if there are customs duties to pay, then your supplier will pay them and then I'll just invoice you so that, as you can see, you don't have to order five hundred or a thousand units. The goal is to order only 250 at first to see and test the market to see if it will sell or not and then in our second order we can order a thousand or two thousand, so right here twenty-five units multiplied by three dollars and 86 cents, including shipping, it would be about nine hundred and sixty-five dollars and then five hundred units multiplied by three point eight. six, including shipping, which costs nineteen hundred and thirty dollars.
Now let's talk about tools, so in terms of tools, there aren't that many tools, there's really only one and there are two parts that you should buy if you want to find a great one. product now you can try to do it without a tool, although I wouldn't recommend that it takes too much time and I also don't know what data you'll get, you know, basically Doing Amazon like sellers did maybe five or six years ago, where they were basically guessing what product was would sell or not, and I wouldn't recommend guessing which product will sell with Jungle Scout, it basically just shows how much revenue the products generate. do and there are also two different parts, so the first one that you will need is the Jungle Scout app and what it does is it allows you to go in there and just put in the reviews and filter by the cost of the product and the category and things like that, so It basically goes through all of Amazon and shows you products that fit that criteria, so obviously it makes product research a lot easier and then the Chrome extension now what it does is it goes to Amazon.
On the list you pull up the Chrome extension and then it shows you exactly how much money that list is making and you can try to have one or the other, although I recommend having both and I think most of you who start this will get both, that's why I factored on both for the sake of this video, so for the web it will be $39 a month now, so you don't have to buy it every month, you can only buy it during the month that you are going to research the product and then you can cancel it if you already have your product and you already know your next product, especially if you're building a brand and that's the way I recommend Amazon build a brand now, part two of Jungle Scout, there you need it.
It's the Chrome extension and like I just said, it allows you to open it to a list and it shows you the revenue that that list is generating right now and it's very, very accurate, in fact Jungle Scout is the most accurate tool. They have done thousands of tests and compared all the tools and I have been using them. You know, if I ever had a reason not to use them anymore, I would stop using them. I would definitely recommend another tool, but It's been great, everything has been great and their support is incredible, so it's thirty-nine a month and then if you want the Chrome extension light, it's 97 a year, if you want the Pro, it's $197 a year now. difference between the light on the pro there is not much difference you can be successful with the light or the pro but if you are a complete beginner and want extra help because the pro has things like the opportunity score that shows you the opportunity in a market particular goal or niche, then I would highly recommend doing the professional one.
Now let's talk about the Amazon seller account, so the individual account is free and the thing was individual, you can't really, we're not actually selling with an individual plan. because individual is basically free but then they will charge us Amazon will charge us for each unit, they will charge us a dollar, so if you sell on Amazon, you always want to do the professional plan because then it costs $40 a month. You don't have to pay for each unit you sell and it's much more scalable and you're not paying all these fees, so there you have to look for professional photos.
Now photos are super important. Anyone who tells you that the photos are not important, you can take them yourself. I mean, you can't take them yourself if you have a good camera and if you have some photography skills, I would recommend that you make sure you take some of the beautiful photographs that you know and want to take. Make sure that at least a white background shows your product, such as the design, logo, how it comes, and things like that. If you can't do that, I would recommend hiring a professional photographer. The best website I recommend is upwork.com I always talk about it being my favorite website for freelancers and you can also use Fiber, although I've had better luck with Up Work.
I just found freelancers who feel more professional there, so you don't want to spend a lot of money on this. Because photos are very important on Amazon, especially the first photo of your product that is going to make or break your sales, so there you have it, I would say enter for free, if you are going to do it yourself, up to two hundred and fifty dollars , maybe you have a friend who is a photographer and they will give you a discounted price, so get ready now for the second half of these costs. Let's talk about logos, so you will need a logo for your product.
Don't even try to sell on Amazon without a logo. I'm still amazed at how many new starters try to sell without a logo because they think it will be cheaper in the long run because you know sometimes you have to pay more to have the logo applied to your product, it's like a few cents. extra, but per unit sometimes they expect that they can just launch a product on Amazon and expect it to sell without creating a logo without creating a box, so for a logo and a box design I would say between 25 and 50 dollars, no I think You should spend more than that, to be honest with you, a logo you can get, there are literally millions of amazing designers on both fiverr.com and upwork.com and you can have that same designer create your box design, which is what I am doing.
We are talking about BA if your product needs a box for example if it goes in a box not all products will come in a box but many of my products now come in a box in terms of UPC and barcode that will cost you . five dollars, so no more than that, it's five dollars from barcodes mania comm or barcodes nationwide. There is also a barcode website called gs1 and that costs a lot more than five dollars, that will cost you between 300 and 400 dollars, but that is not necessary I have never heard a single problem or had a single problem using a code five dollar barcode from barkos mania or nationwide barcodes, so here I go, now it's five dollars for the inspection, this is not required, it's optional, although I recommend it. sometimes, especially if the supplier is new to Alibaba, if you are really nice, maybe you are a little worried about the supplier, usually on Alibaba, they will tell you exactly how long they have been selling exactly what their experience is, what their annual price is .
Income, which is very important, a lot of people talk about that, so for the inspection, I would say it would cost between $50 and $200. You can do this through your freight forwarder or you can hire an inspector through Alibaba as well. They also have three. different levels now for a sample. I highly recommend getting a sample when I first started the song on Amazon. I wasn't really getting samples and the reason for that was because it would delay, you know, I would have to wait two weeks, three weeks to get the sample and then I would have to wait three weeks for the product to actually be manufactured, so the reason why What I recommend the sample now is because you better know that there is no rush, there are so many products on Amazon that if In reality, two weeks will delay your success so much that then you will be able to find another product, it is not a big deal, it is better to have a sample and It's better, you know, to review your product and, in fact, I get samples of my Shopify products as always and so you don't have any surprises, you know you're not investing in 250 units, 400 units of a product that you don't know how it's going to look on you. your hands right and you don't want your customer to be the first to discover that there is a problem with your product, so now the total costs amount to 250 units, which is equivalent to approximately one thousand four hundred and eighty-one dollars and for five hundred units if you order the same product five hundred units based on all the cost we talk about here is around two thousand five hundred and fifty now you don't need to order five hundred units, you can start with 250, maybe you can even reduce the minimum quantity oforder, which is the minimum number of units you can actually buy from your supplier, then you can reduce it to a thousand, and this is if the product costs more than dollars, including shipping, you can find tons of products for two dollars, you can find tons of products for two or three or much more expensive than three, so it really varies.
I would say the absolute minimum to start with is a thousand dollars and then you can factor in all of these costs. Some have started extremely successful Amazon businesses with as little as $500. That wasn't me when I started. I started with 1800, so I started with 1800 and shortly. After that a few months later I was making over 30k a month in income so it really varies. The main point is to focus on what matters and that is taking action and you know you can't wait, you can't see all the obstacles. in the future, but if you can focus on what matters to get your product up and running, then that's what matters, that's what will make you money, don't focus on all the little things like whether the sample is taking a month, then forget about the sample, just get the product, come on, you know, that's what matters, how to make money online, real dollars, not, you know, just sit there theorizing and just not take action, like that So now I want to talk about a high ticket.
There are a lot of products and I don't think anyone has talked about this on the Internet or on YouTube. Now there is another extremely profitable section of Amazon that is high priced products and I actually got into the high tech of their products shortly after I started selling them. Amazon and this is much more expensive than you know. The first example like this scenario is an option, it won't necessarily apply to you, but I just want you to understand exactly what the costs are like. with Amazon depending on the price of the product and the kind of similar prices of the product here that you are investing in, so what does the high price of the product basically mean?
You know, I would say let's say $40 $35 that you're signing up on Amazon for the price of the product, so as the cost of the product I took 1183 for the purpose of this video and I would say that's accurate, including shipping, if you're investing in a product that's electronic or something like that that you can sell for $40 if you actually do it. a list and great if you have amazing photos and if you follow the rest of the tips that I talked about in my videos, then 200 units multiplied by 1183 includes DDP shipping to us, that's almost three thousand, that is two thousand fifty and seven five hundred units. of the same product is almost six thousand, so 5115 that is just for the product.
Now remember you don't have to do this, this is just a high price example, but with high price products you can make a lot more because you know if they are selling at $70, $80 or $50 as price on Amazon, there are a lot less competition, so it's not that you can't make money at low prices, of course you can, but I just found out. With those high tickets, you know you really need more startup capital and most people don't want to invest that money, so the tools cost the same 39 a month or 197 a year, same for Amazon seller account, $40 a month and the same for photos, and then.
We also have the same cost basically for the rest of your UPC logo, inspection and sample, which brings the cost to three thousand five hundred and thirteen for 250 units and then for 500 units of 6565. Now this probably won't apply to 99% of you guys because like I said most people don't have 3000 or 6000 and you definitely don't need that to start Amazon but when you have your first product up and running you are making money 10,000 20,000 30,000 a month investing in high quality products price of That money you are making on Amazon is an amazing idea because then you can make a profit of $20 per unit.
A profit of $30 per unit. A profit of $40 per unit and then you don't have to sell as many units to make the same amount of money. Let's look at some examples here, so I have some products here that I pulled out and I want to show you exactly how much they get on Alibaba and how much they sell for on Amazon to show you. These costs that I talked about are accurate so let's go to Amazon okay so we had the rise of alpha grillers and I'm in Brooklyn. I don't know why you say that, but okay, so we have alpha grillers. the meat thermometer so 1997 there you go and I mean they have a ton of reviews and in no way am I saying this is a product worth investing in right now but I'm just showing you an example from someone who decided to follow the private label model and decided to start selling this product and create a brand and they found it in a meat thermometer.
There you have it, they found it on Alibaba and by the way, the price they get it at is much lower than the price. You're looking here, so it's pretty much this one here, as you can see, boom, exactly the same song for 20 and here it's $5 to 560. Remember you can actually get this thermometer for half this price. I guarantee it and I guarantee it to you. You buy it for $2 or $3, maybe even 150 because you know they're probably one of their biggest buyers, so you have to remember that one of the biggest mistakes people make with Amazon is that they think this price is the lowest. that exists. they can get and they go and start investing in the product at this price and then they say: wait a second, I can't start Amazon with just a thousand or 1500 hours, well, it's because you don't know these basic things that Could you give you this information?
Then you would know that hey, well, this price here can be reduced, so maybe you'll get that information in my videos or like in a course, so there you have it, there's a lot more to Amazon surface level, I would say now another car seat protector example this one is even better as you can see it is just a simple car seat protector and it sells for twenty four even here it is a pack of two for four dollars i.e. $24 .99 and if Go here we type in the car seat protector I think the same price as the thermometer is fine so if that didn't work the car seat protector is fine let's look at it boom about five $450, even cheaper than a thermometer.
As you can see, and like I said, this seller here probably has a good deal with their supplier because they're their biggest buyer or they negotiated a really good price at the beginning, which is what I value the most. I recommend you do it and they are obviously making a huge profit on this product and as an example of a high priced product, here we have a bamboo sheet. In fact, I just found this product this morning and decided to use it for this. video, so bamboo sheet set bamboo sheet set there you have it and if we search for the same on Holly Baba, I'm sure you're already familiar with Alibaba, it's the largest manufacturer website in the world, this is where We find our manufacturers. for Amazon, as you can see, the bamboo sheet set has to do it right, not just a sheet, so it costs about twenty dollars, so you can buy any of these sets for about twenty dollars and as you can see, it they're selling for about $90 for anywhere between forty and six hundred so that's an example of a high priced product and of course you know you can see the profit becomes exponential the higher the price goes, so if you can find a way to apply what I'm teaching you here to that and then once you have more money to invest, you can make a lot more money than everyone.
Now let's talk about some last minute tips that are crucial to your success on Amazon, so the prices you see on Alibaba, as I just mentioned, are not the prices you want to pay and I would say that most beginners make that simple mistake: they pay the prices that are on Alibaba. It's a big mistake. You should also make sure that your product is not just a product gimmick that you want to make sure of. that you know you are an entrepreneur, you are becoming an entrepreneur, so you want to create a real improvement and bring value to a particular market and, most importantly, solve a problem.
The key to making money is selling problems for other people, so if you can. do that, then you will make money no matter what, no matter what product, if you can find a way to solve a problem, if you probably solve a problem, then obviously, and if you solve it better than everyone else in the target market, and you discover it. how to do that, then you will earn guaranteed money now. I want to cover something extremely important here that unfortunately many people overlook when starting out on Amazon. Many people want to be successful but they make very, very costly mistakes, and if you try.
To do Amazon yourself, you're going to make mistakes that set you back months, years, and thousands of dollars, so I made a lot of mistakes when I started over the last few years, more in the first year, not the second and you. I don't know recently because you already know what they are, so as a beginner, I would have been lucky if someone actually went and you know, tell me all these mistakes and make sure I didn't make them, maybe I. I'd like a mint or something of course in terms of mistakes I made, I first invested in proprietary or band restricted products which cost me over five thousand dollars and it's actually quite embarrassing because a lot of the products should for be like, I would find the patent as soon as it got to Amazon and then I would get a cease and desist letter and, you know, that cost me five thousand dollars and if I could go and ship my product and have it reviewed by a mentor who really knows what what you're doing, you really know what Amazon has done and has been doing it for years, then obviously you would have saved that money.
I could have achieved success much faster and although I was successful quickly on Amazon between the time I started and the end of that year. I still lost money due to stupid mistakes, even though I was still generating cash, so I kept reinvesting in my business. Now, number two, they overcharged me. product and shipping now the shipping is like one of the you know if you get shipping quotes you will see that a lot of the shipping quotes are very different in the variation between the three different shipping coats that you will get so it's just you know, because the Chinese suppliers, some of them will try to overcharge you for shipping, some of them will be honest, so you know, if I didn't know, if I knew, hey, you want to make sure you get more than one shipment. quote and want to make sure you are not overcharged for your product.
I would have said $2,000 because at least I lost that money, at least just because of that mistake, and I also didn't understand that PPC wasted over $3,000 and chose the wrong shipping method and one I actually had to ship the product back to China because it didn't have the right customs requirements so I had to pay a thousand dollars for that just to ship it back to China and then we shipped it and then the last mistake. I was ordering very few units, so I ordered 200 units for a particular product and it was not enough because they sold out in about three days because it was actually a very successful product and that cost me at least $5,000 or more. in lost profits from the money you could have made if you ordered more units and as you can see, all of this can be offset by the cost of a course like the economic freedom course, which is four hundred and ninety-seven dollars, it's a no-brainer. investment and it would save me a lot of pain, so if I access something like the financial freedom course that also comes with my desired mentorship, I actually made financial freedom after years of doing Amazon and after making all these mistakes and also basically I committed I'm sure it's a complete step by step process so you have everything you need to know to build a profitable business on Amazon, quit your nine to five job and live the life of your dreams, so if you had access to that, I wouldn't do it.
I admit to these mistakes and I would have made almost $20,000 not to mention all the time wasted so the link for the financial freedom course is below and once you join there will be a link below to access my one on one mentoring so I hope. You guys enjoyed this video because of how tutoring is going to be removed soon and I'm replacing it with coaches so if you join right now as I say this you will have access to it and the reason why tutoring is going away is Because my goal It's freeing 10,000 people, it's complete personal financial freedom and I can't do that.
You know, if I'm getting all the tutoring myself, the link is below to join. I'll see you there. There will be a link below to access the tutorial. I hope you enjoy. I hope this has clarified many questions for you. The most important thing is to take action. Subscribe to the channel. I will see you soon.
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