If you’ve been considering starting an Amazon FBA business, you’ve probably wondered how much money it’s really going to cost you. Even though it’s very affordable to start an Amazon business – especially compared to more traditional businesses –...

If you’ve been considering starting an Amazon FBA business, you’ve probably wondered how much money it’s really going to cost you.

Even though it’s very affordable to start an Amazon business – especially compared to more traditional businesses – there are still some upfront and recurring costs you’ll have to cover.

I never want someone to go into a new business thinking that it will be “free” only to find out that they can’t afford their monthly expenses.

So I want to give you a realistic look at how much it costs to sell on Amazon. This will cover your startup costs plus recurring monthly expenses. I’ll even share some additional costs that you might want to invest in later on.

I generally recommend that new sellers start small with their monthly expenses. One way to lose profit is to invest in too many recurring expenses. It's ok to start with just the necessary investments and then add more as your business becomes profitable.

So with that in mind, let’s take a look at how much money it costs to sell on Amazon FBA.

Startup Costs for Amazon Sellers

There are a few things that you’ll need to invest in before you even get started selling. These upfront costs should be around $1,000 or less.

If you want to learn more about startup costs, check out this post: How Much Money Do You Need to Start an Amazon FBA Business.

For now, I want to go over these costs briefly so that you can budget for them.

1. Inventory

Your business isn’t going to get very far without some inventory to send in. I recommend that new sellers have about $500 available to spend on inventory.

If you’re doing Retail Arbitrage or Online Arbitrage, this can cover quite a few items! If you have less to spend, focus on cheap products like used books or clearance items.

2. Supplies and Tools

You can definitely start out pretty lean when it comes to supplies. If you already have a computer, smartphone, and printer, your supplies should cost less than $100. This is mostly small supplies like address labels, a shipping scale, and boxes.

You can view my list of recommended Amazon FBA supplies here.

Recurring Expenses

In addition to your startup costs, you'll also have some recurring expenses each month.

These are things that are necessary to keep your business running smoothly.

Amazon Professional Selling Fee

If you sign up for Amazon as a Professional Seller, Amazon will charge you $39.99 per month. This isn't required, but I do recommend it for most sellers. They will charge you this amount on the day you open your account.

The Professional Selling account comes with a lot of benefits. One big one is that you can link your Amazon account to helpful third-party tools (I'll be talking about those soon!). Another big benefit is that you'll be eligible to get ungated in popular categories like toys if you use the Professional account.

If you do decide to go with an Individual account to save the $39.99, you'll be charged $0.99 per item that sells. So if you sell more than 40 items each month, you want to upgrade to the Professional account right away.

Bookkeeping Software

This is another way to see if your business is profitable. With bookkeeping or accounting software, you're looking at the health of your entire business.

This is where you can track big picture information like gross sales, Amazon selling fees, Cost of Goods Sold, and other business expenses.

This doesn't have to be expensive! I use Xero Bookkeeping which starts at $15 a month

Another option is Quickbooks. If you're familiar with QuickBooks, or your CPA has asked you to use it, they have online options for around $15/month or desktop software for a $200 one-time purchase.

I recommend having a monthly bookkeeping routine so that you always know whether or not your business is making money. Plus it will really be a lifesaver when your income taxes are due in April!

Veeqo Software

Veeqo is actually completely free so won’t cost you anything extra each month. It’s an inventory management and ecommerce shipping software that will help you manage your inventory across Amazon and other channels, and is a must-have if you’re shipping through Amazon.

Because it’s owned by Amazon it integrates seamlessly with Amazon’s products and services including FBA, and even offers Amazon’s full A to Z Protections.

Retail Arbitrage Costs

If you want to find inventory by scanning items in retail stores, there are some investments that will make your life a lot easier.

BoloMart Mastermind Group

As a Retail Arbitrage seller, your biggest obstacle will often be lack of inventory. Without inventory to send in to Amazon, your business isn't going to grow!

Trust me – there is more than enough inventory out there in retail stores to grow a business to six-figures in profit. That's what Cliff and I did our first year in business together!

But I completely understand that you will sometimes get stuck in a sourcing rut (it still happens to me anyway).

A BOLO mastermind group is a great way to find new retail sourcing ideas. BOLO stands for “be on the lookout” and that means that each member of a BOLO group shares one idea for an item that can be found in retail stores.

You can search for the exact BOLO leads or use them as a source of inspiration!

Online Arbitrage Costs

If you buy inventory from retail websites online, using paid tools will save you so much time. There are online sourcing tasks that used to take me days that now take just minutes due to automated sourcing tools.

Here are some of the most helpful tools you can invest in to speed up your online sourcing process.

Online Leads List

Although I don't recommend joining a leads list when you very first get started with Online Arbitrage, I definitely recommend using one to ramp up your online arbitrage sourcing.

We offer a very exclusive (limited to just 20 people per month) leads list where we send you 15 profitable product leads per month that you could potentially resell on Amazon.

Source Mogul

This is the big one. Source Mogul is fully automated online sourcing software. You can use Source Mogul to search hundreds of online websites and look for matching ASINs on Amazon.

You can even set your sourcing criteria (ROI, profit, sales rank, etc) so that Source Mogul only shows you winning products.

I have a full review and video demo of Source Mogul in this blog post.

A Source Mogul subscription costs $97/month. You can use this link to start a free 10-day trial to test it out.

RevSeller

I use RevSeller nearly every day in my Amazon business. Even when I'm just repricing or getting ready for a retail arbitrage trip.

But when I'm doing Online Arbitrage, RevSeller is the only tool I need to check an item's profit.

RevSeller is a paid Chrome extension. Once installed, it loads automatically on an Amazon product detail page.

If you've been checking your fees and profit using Amazon's free FBA Calculator tool, this is going to save you so much time. It provides tons of information at a glance and it will help you make better buying decisions online.

RevSeller is billed as an annual subscription. The cost is $99/year, but you can start with a 30-day free trial by following this link. Use coupon code THESELLINGFAM to save $20 on your first year!

For a product that's only about $8/month, it's amazing just how much RevSeller can do. Learn more about RevSeller in this blog post.

IP Alert

This is helpful for both retail arbitrage sellers as well as online arbitrage sellers.

One of the most detrimental things to happen to Amazon sellers is getting IP Claims filed against them, because they can lead to account suspensions that cost both time and money to get taken care of.

IP Alert is a simple extension that you can use right on Amazon.com or from your mobile browser to check if the product you are considering is by a brand that likes to file IP claims against sellers.

This helps you avoid them from the beginning, rather than just having to deal with them later.

Adding Up Your Amazon Costs

That's it for my top recommendations! Remember, it's extremely unlikely that you would need all of the products in this post. That's because different kinds of Amazon businesses have different needs.

If you started with just the basic recurring expenses, you'd be spending about $116/month on expenses. That's a pretty small investment for products that will help you run a profitable business.

Of course, these costs will be in addition to your inventory purchases and Amazon's fees. But this is the part that most new sellers overlook.

Do you have a good sense of your monthly Amazon costs? Write them all down in your Amazon planner or enter them in your accounting software.

The post How Much Does It REALLY Cost to Sell on Amazon? appeared first on The Selling Family.

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