When it comes to selling on Amazon, here is the main question all sellers face: How much money do you need to start Amazon business? Now it’s time to look at the different types of expenses you may need in starting a business on Amazon.
There are different twists and turns at each stage of the journey, and your final destination will differ depending on the decisions you make along the way.
Selling on Amazon is very close to this principle. We also have to choose different paths along which we will go.
To determine the size of the initial costs, we will divide the costs into two categories: necessary costs and desirable costs.
Required costs to launch a product
- Put money in product samples
If you have a foreign supplier, you need to get a sample of the product.
Why?
There can be significant discrepancies between the product listing on Alibaba and the same product in reality. There is only one way to check the quality – by ordering a sample.
After you have selected your product and found different suppliers, narrow your list of suppliers to the three most attractive to you. Choose suppliers who will be able to provide you with a product with the characteristics you need and at an affordable prices.
Once you have selected potential suppliers, order a sample of the product from each of them. You will have to pay for the cost of the product plus shipping.
Plus, if we budget for a higher product cost, each sample will cost you $ 100 to be delivered within five days right to your home.
Thus, you will need nearly $ 300 for 3 product samples
- Inventory
Once you have chosen the best supplier, it is time to purchase the product!
Usually, suppliers on Alibaba have a minimum order quantity, but if you decided to sell 500 units of the product, the product may cost your, for example, $ 4 per unit, which will include cost and airfreight.
If $ 4 is worth a unit, then 500 units = $ 2,000
- Promotional products
Let’s now decide to have 50 units of the product to give away at a discounted price and in return get feedback and quickly improve organic rankings.
The promotional distribution of products will cost you nearly $ 30 for one month.
- Professional Amazon Seller Account
Whether you have an individual account or a professional seller account, you will have to pay Amazon a fee to host your product on its platform. With an individual account, you will pay $ 1 for each item sold, and a professional account will cost you $ 40 per month.
Let’s put together a sales plan and if we can sell more than 40 units a month – in this case, a professional seller account will be more profitable.
Plus, you’ll need a professional seller account for your ad campaigns. However, you don’t have to pay Amazon commission upfront – it will be charged directly from your seller account.
Therefore, the cost of a seller account on Amazon is $ 40 per month.
Desirable costs
- Create a website
To trade successfully on Amazon, you will need to create your own brand website. This website should be the hallmark of your business.
The main sections that should be on the site:
- Landing page
- About company
- Products/services
- F.A.Q.
- Contacts
The website creation will range from $ 500 to $ 1,000.
- PPC ads
PPC ads will boost your product sales.
As you generate more sales (and get more reviews from customer email feedback), your product’s organic ranking for top keywords will increase.
Let’s say you pay $ 10 per day for ad campaigns – $ 10 per day for 30 days – $ 300 total.
- A graphic designer fees
Hire a graphic designer to increase your brand’s legitimacy. A graphic designer can create a logo, catchy marketing materials like packaging designs, and photoshop your product photo. You can hire a freelance designer for as little as $ 50.
Otherwise, you can create your own graphics using free sites like Canva or PicMonkey, or even Google Photos. However, if you want to hire a designer online, you may pay $ 200 for a good designer.
$ 200 for logo design, packaging and photoshop services
- Product photo
The importance of high quality photos of your product cannot be overstated. It is imperative that your product stands out from your competitors’ products.
A potential buyer will never visit your listing if they don’t like your product photo. The purchase-oriented consumer usually builds on the visual representation of the product when making their choice.
You can get high quality photos for $ 25-50 per shot. Let’s say you want 8 images and you agree with a photographer to make them for $ 300.
$ 300 for 8 professional high-quality product images
Here we are
If summing up all the costs, you will need nearly $ 2,000-2,500, depending on the product and its purchased quantity.
Yours, Amaz.Markets.
1