You might think it’s impossible to start an Amazon FBA business for under $1,000. Isn’t it much more expensive when you factor in things like buying products from manufacturers and suppliers, signing legal and tax contracts, creating a brand, developing an advertising and marketing strategy, paying Amazon fees, storing and shipping items, and so on?
Spend a lot of time researching and learning because your margin of error is really small
How is it that rich people seem to have their money grow so much faster and easier than other people? It’s not that they have more (although that may help), it’s that they have more room for failure. In the event that one venture doesn’t succeed, there’s enough money to spread around in other ventures, increasing the likelihood that one will succeed.
You don’t get that much margin for error if you start a business on Amazon for under $2000, so you’ll have to be smart, methodical, and selective right from the beginning.
Until you grow more capital and can afford shipping overseas, you may want to restrict sales to your country only. Would it be possible or feasible to ship to an Amazon fulfillment center in another country if one of the suppliers you are shortlisting is based there? There might be more complex dealings, but higher profits and sales are also possible.
The Inventory You Choose Must Be Quite Selective
Despite Amazon’s vast selection, only a small percentage of those products will fit your small-budget needs. In spite of the fact that paying for a tool like Jungle Scout may seem like an unnecessary expense, it can provide a better return on investment than going it alone. Since it can help you narrow down your list of profitable items you can sell on Amazon, it can provide valuable and time-saving information.
FBA Revenue Calculator is one of the free tools you should definitely use before investing in any product idea. Input the highest cost price you find private label sellers listing it for in order to get an accurate estimate of your revenue potential.
You should always refer to the following list when looking for products:
- Size: If it fits into a shoebox or similar box and is light enough, you can minimize your shipping costs.
- Seasonality: If you have a $2000 budget to start an Amazon business, choose products that are sold on average throughout the year.
- Usability: It is believed that a product is more likely to succeed if it is used often or regularly. Stay away from niche products.
- Risk: Keep fragile or breakable items away and stick to products that can transport well and handle a little rough handling. This isn’t the right place for that, but there is a market for it.
- Brands: It’s tough to make a living selling the big-name brands. Besides strict branding and selling rules, you would also have to deal with stiff competition.
- Category: Electronics is a category that is more competitive than others. Wholesale product prices can be low, but you’ll need to invest in other areas if you want to stand out. $2000 is not enough.
Think of every product idea you can come up with and record them all, no matter how outlandish they may seem at the time. You want to get a lot of choices so you can narrow them down to a shortlist that makes sense.
Check Prices on Alibaba
Cross-reference Amazon’s price with Alibaba’s price for the same product. By doing so, you will have a good idea of each item’s potential profit margin. You can use Alibaba’s price multiplied by the number of items you plan to stock up on, such as 250-500, to determine how many purchases your budget allows.
After you’ve chosen a list of cheap items, you should order samples, whether you purchase them from Alibaba or elsewhere.
You should find out what the minimum order quantity is before ordering (especially if you’re ordering from Alibaba), negotiate for smaller quantities that are within your budget, and be firm if you cannot get what you want. Both sides are doing business.
You’ll need to be on your game when it comes to suppliers, since you’re a small business.. After testing the samples, develop a business plan highlighting how many products you’ll need to order, backed up by research on sales and profit projections for the next year.
PayPal is an excellent way to pay your suppliers (especially for small orders). Because of its fees, it might not work over the long run, but for security and quick transactions, it’s hard to beat.
Other Costs to Consider
Keep an eye on your budget for setting up a professional Amazon account, Amazon fees, packing, shipping, and legal needs, as well as brand labeling and marketing. Even if you are budget-poor right now, your time should compensate for it.
In order to get up and running on such a tight budget, speed is key. Do not spend too much time on special packaging or a fancy logo. Those things can come later in the process as you refine them and compound sales.
At this point, focus on building a social media presence, creating advertising campaigns to boost visibility, putting together email campaigns for reviews, defining your keywords, and optimizing your listings.
Don’t forget to thoroughly familiarize yourself with Amazon’s Terms and Conditions so you won’t run into any tangles down the road that could jeopardize your chances of success or even your account.
If you start gaining traction, investing in more products is one of the first things you should do. When you place orders in bulk, you can reduce the per-product price, increasing your profit margin. You can continue to invest in other areas as you grow, like packaging, brand aesthetic, email marketing, etc.
Quick Links
- The Importance Of Amazon Product Research
- Know In Detail About Amazon FBA Fees
- Pros And Cons Of Amazon FBA
Final Thoughts: How To Start An Amazon FBA Business With Little Money
It is a great business model if you have never dealt with products or run a business before.
Once you have listed your products, maintaining the business is relatively easy. The time I spend checking my stats is optional. I spend about a half hour or less per day.
You may initially find the setup process confusing, even though it is simple. Fortunately, Amazon offers 24/7 support. Often, you will be contacted by them by phone and they will discuss any issue with you.
Last but not least, FBA training will give you a huge shortcut and a significant advantage over other sellers who didn’t invest any time into professional development.
