How to Start an Amazon Store with Less Than $2,600
Generating passive income has never been more feasible than it is today. By selling on Amazon FBA (Fulfillment By Amazon), you can start a profitable business without the risk of a massive upfront investment. Don’t believe us? We’ll show you how to start, build, and monitor your Amazon business with as little as $2,600! Let’s get started.
What You Need to Start Your Amazon Business
- $2,600 budget
- Two or more dedicated hours of work per day
- Internet or WiFi Connection
- An LLC
- A bank account
- A graphic designer
- Private label supplier to work with
- Freight forward contact for overseas shipments
Above are the only things you need to kickstart your own Amazon business.
Find a Product(s) to Sell
Amazon sellers are only as good as their product. Finding the right product is essential for successfully starting and maintaining your business.
Ideally, you’ll want to identify products with high opportunity and demand but low competition. To do this, you need estimated sales, price, and competition data to make informed decisions.
As an additional start-up cost, you will want to invest in a product research tool to get instant access to rich data about the products that will act as the foundation of your new Amazon business.
After you have established your business and start selling, you will want to use Amazon price monitor software. Moving forward this monitoring software will help make data-informed decisions that will grow your sales and profit margins.
Cross-Reference Selling and Cost Prices
After identifying some of the best products for you to sell on Amazon, you need to find out what your potential profit margins will be. Find the sale price of your tentative products and cross-reference those selling prices with average cost prices.
This process will also give you an idea of how much your first inventory of products will cost and whether it is feasible within a $2,600 budget.
Get a Breakdown of Costs Using Amazon’s FBA Calculator
Take all the data you have collected from your research and input all the appropriate information into the Amazon FBA calculator. This tool will give you an estimated breakdown of costs when selling on Amazon FBA. With the FBA calculator, you can access the following data:
- Revenue (Item Price + Shipping)
- Cost (Fulfillment Cost + Selling on Amazon Fees + Cost of Goods)
- Seller Proceeds (Revenue – Selling on Amazon Fee – Fulfillment Cost)
- Net Profit (Revenue – Cost)
Get Product Samples
Now that you have narrowed things down to a specific product or a few products, it is time to order some samples from potential suppliers. Find suppliers on Alibaba, AliExpress, and other similar companies. Getting samples allows you to test and inspect the quality of the product before it gets into your customer’s hands. Make sure you order the samples with the full branding of your label, logo, and graphics.
Know Each Suppliers’ Minimum Order Quantity (MOQ)
Every supplier sets a limit for the minimum units a buyer can order. Some products may have a steep MOQ that will be too expensive to work within a $2,600 budget. The good news is that you can always negotiate for a lower MOQ. Since you are starting with a smaller investment, a low MOQ is vitally important.
Order Your First Inventory of Products!
Once you feel comfortable with the look and quality of the product, it is time to order them.
Before you do anything, know all your costs and make sure you are within your budget. Below is an example cost breakdown if you are trying to spend less than $2,600.
The Cheapest Way to Start an Amazon Business
- Product Research Tools: $50 – $100
- Product per unit cost (including VAT): $5
- Negotiated Minimum Order Quantity: 250
- Estimated cost per each unit label: $0.07
- Company set up: $29.99
- Graphic design logo: $15
- Average graphic design product label: $50
- Product photography: $150
- Amazon monthly subscription fee: $39.99
- Average shipping cost per unit (China to USA): $3
- Amazon PPC (pay-per-click) Campaigns: $100
Investment total = $2,503
Start Selling & Reinvest
You have done the hard part, but money does not make itself. You need to start selling your product on Amazon and reinvest your profits into your new business. You started small, and now it is time to grow.
Your ultimate goal should be to have your private label product on the first page of Amazon. You can achieve this by diligently monitoring and optimizing your Amazon seller account.
Set-Up Customer Reviews
When fighting for a spot on the first page of Amazon, receiving product reviews on your listings will be a significant help. There is a lot more involved in your success on Amazon than just customer reviews, but it is important. Getting between 15-25 product reviews on your listings is ideal.
Monitor Your Amazon Listings
There are a lot of factors that can positively or negatively influence the rank of your listings on Amazon, and keeping track of everything can be a hassle. To get the most out of your new business, you need to know what factors to focus on, when you need to address them, and how you can effectively take action. Monitoring software can help you optimize Amazon listings by gathering actionable data on your products and alerting you to new opportunities and serious issues.
Don’t lose potential sales! You can continuously monitor the performance of your listings with Amazon text alerts and instantly react to problems and opportunities.
There are a variety of features available with Amazon seller software:
- Buy Box/hijacker monitoring
- Listing leeches/piggybackers
- Negative review monitoring
- Product keyword ranking changes
- Product image changes
- Bestseller badge changes
- Product suppressions
- Keyword ranking changes
- Product price changes
- MAP Alerts
- And more
Amazon Pay Per Click (PPC)
Paid advertising on Amazon might just be what your new listings need to get an extra boost in traffic and sales. The cost of advertising on Amazon is cheaper than advertising on Google or Facebook. The average cost-per-click (CPC) is between 14 cents and 72 cents. Because you are starting out with a smaller investment, this is good news. Don’t let your modest budget keep you from Amazon PPC. You do not have to invest a lot in PPC to see a satisfying ROI.
Amazon Seller Pitfalls You Will Want to Avoid
- Your Amazon Seller Account Needs to Be Profitable. This seems like a no-brainer, but remember that selling on Amazon is NOT free. If you aren’t making money, you are losing money.
- Stickerless SKUs. Each new FBA starts off stickerless. You can send your stickerless product(s) into FBA, but your inventory can become mixed with the inventory of other FBA sellers of the same SKU. Selling a counterfeit co-mingled product to a customer, knowingly or unknowingly, could result in the suspension of your Amazon seller account.
- File and Pay Your Taxes. Your Amazon Seller Account is not exempt from taxes. Failing to take care of all your taxes will risk your entire business and maybe result in fines and possibly prison.
- Identify Suppressed Listings. Amazon will hide or suppress your listings when they do not meet certain standards. Make sure your listings possess complete product information, titles, category (item-type), includes images, etc. Amazon listing suppressed software can identify these issues for you and help to prevent your listings from being suppressed or hidden without your knowledge.
- Default “Repackage Unsellable Customer Returns” Setting. If a customer returns an FBA order and the product’s packaging sustained damage, Amazon will apply its packaging to your product by default to make the unit resellable. However, customers often misinterpret Amazon’s repackaging as your business attempting to sell counterfeit or used products. Unless you sell your product in a generic polybag or cardboard box that is devoid of your logo and brand, turn off this packaging feature.
- Avoid Big Brands. You are just starting out. Play it safe! Don’t enter any market on Amazon that is dominated by big brands, such as Apple, NIKE, Under Armour, Fitbit, etc.
- Track the Recovery Rate of Each SKU. High return rates be a significant financial loss for your Amazon business. You cannot resell most returned items as new condition products. Identify products with high return rates and consider removing them from your existing catalog.
- Sell Products That Are Low Risk and Easy to Ship. To save on shipping costs and avoid potential shipping issues, find products that are small and light. As a general rule of thumb, you want your product to fit into the average shoebox. Additionally, you want to avoid products that come with conditional risks. For example, don’t sell seasonal items or products that customers will only buy once.
- Protection Against Hackers. Amazon seller account hackers will steal logos, product pictures, and descriptions to impersonate existing seller accounts. These fake Amazon seller accounts can attract buyers who unknowingly expose their personal information and pay for a product they will never receive. AMZ Alert’s Amazon monitoring software works around the clock to protect your seller account and potential customers from hackers.
- Search for Duplicate Listings from Competitors. Some competitors can divert traffic away from your product listings by creating duplicate listings on Amazon. These duplicate listings often go unnoticed by sellers. After every two or three months, you should search the whole Amazon catalog for duplicate listings of your product, and consider filing tickets with Seller Support to merge the duplicate listings or report violations against sellers who create these duplicate listings maliciously.
If you would like to learn more about the Amazon seller market, be sure to look through the rest of our Amazon Seller articles. Check out our Amazon monitoring packages, contact us, or request a free demo today!