Starting your own business is a cherished desire, which for the majority remains a desire. Meanwhile, the Internet provides a lot of tools that greatly simplify the opening of a business, its maintenance and reduce production costs. And to build your own business you need relatively small savings and a damn desire to do something. So how much do you need to start Amazon business in 2022?
How much do you need to start Amazon business in 2022?
JungleScout conducted a study among thousands of sellers to find out how much capital they started their Amazon business with.
The results were as follows:
- 17% of sellers started with a starting capital of $500.
- 12% – with a capital of $500-1,000.
- 13% – with a capital of $ 1,000-2,500.
- 17% – with a capital of $ 2,500-5,000.
- 22% – with a capital of more than $10,000.
Residents of the CIS countries are sure that only large sellers registered in several countries and with well-established logistics can work through Amazon. But to start selling, all you need is to have:
- A package of documents for registering a profile
- Small start-up capital for testing and purchasing the product
- A legal entity or individual entrepreneur in the country of doing business – not necessary at the launch stage, but we will tell you how to register it
Necessary costs to start Amazon business
Sample order: about 100$
Having decided on possible suppliers, it is necessary to evaluate the quality of their goods. This can be done by ordering test samples of products from them.
Keep in mind that in the logistics product line, exports are always cheaper than imports. Therefore, the most rational option is to ask the supplier to pay for the shipment on their side and re-charge you with these costs.
Batch of products – $ 2,000
For the calculation, we take the following parameters as a basis:
- Selling on the Amazon US platform.
- A self-branded product under the FBA model, as this approach provides the greatest opportunities for expansion in the future.
- 100% return on investment.
- The purchase price per unit is $4 (including production and shipping costs).
- Lot size – 500 units (Minimum order quantity for most suppliers on Alibaba).
- 50 units are planned to be used for promotion/advertising.
Product quality inspection – from $ 150
Inspection of the quality of the goods will allow you to solve all possible problems with marriage, defects and incomplete completeness of the batch until the time of shipment.
This is especially important when launching a new product, as high quality is the main guarantee of positive feedback from customers.
Promotion costs – $200
The most common way to promote a product is through promotions with discounts of 50% or more. This will increase sales at the initial stage and bring the product to higher positions in the search.
Professional account fee – $40 per month
Obtaining a UPC code – $250
UPC (Universal Product Code) is a barcode standard used in the United States. Its purpose is to track goods in retail chains.
According to Amazon’s rules, you need to register a barcode through the GS1 organization. To do this, you must submit an application and pay the registration fee – $ 250.
Additional expenses
- Advertising costs: $300 ($10 per day for 30 days)
- Buying ads on Amazon (Amazon PPC) will allow you to promote your product in the search results. The standard cost is $10 per day. This will give +30-40 clicks to your listing, which allows you to count on 3-4 sales.
Trademark registration: $350
You can register your own trademark in the Amazon Brand Registry. The entire process can take up to several months.
Total: Necessary expenses – $ 2740
Additional costs – $650
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