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Jun 28, 2023

What's the True Cost to Sell on Amazon? It's More than Selling Fees

Brian Connolly February 2, 2023 Accounting & Finance, Selling on Amazon Sharing

Brian Connolly

February 2, 2023

Accounting & Finance, Selling on Amazon

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2023 Update:

In order to provide ecommerce entrepreneurs with all the information they need to succeed with their Amazon ventures—from launch, to first sale, to growth and scaling—we’ve updated our content for 2023.

Looking for more information on starting an ecommerce business? Check out our updated guides for How to Sell on Amazon, How to Sell on Walmart.com, and How to Sell on eBay.

Interested in selling on Amazon but worried about how much it will cost you? Good news! It's not as much as you might think.

Based on Jungle Scout's research, the majority of new sellers spend approximately $2,500-$5,000 to start selling on Amazon — including product costs, Amazon fees, and other necessary initial investments.

However, many Amazon sellers get started with $500 or less, while others pour five figures or more into new business — both extremes capable of finding success on Amazon.

We’ll cover the essential costs of selling on Amazon, and explore how different investments could result in different profits for Amazon sellers.

Jungle Scout — the all-in-one platform for selling on Amazon — surveyed thousands of Amazon sellers to find out exactly how much money they spent when they got started on Amazon.

Spending more money to start an Amazon business does not always mean more success for the seller. In fact, sellers who started with less money tended to find success faster and have lasted longer than those who started with more money.

The remainder of this article breaks down the costs to sell on Amazon into the following three categories:

The majority of Amazon sellers opt to manufacture and brand their own products to sell on Amazon — a business model called private label.

Here's how this method works in four steps:

The rest of this article explains the costs involved with these steps. If you want to dive deeper into selling on Amazon, check out our How to Sell on Amazon for Beginners guide. It teaches you everything you need to know!

Before we break down the start-up costs for an Amazon business, we want to establish the type and quantity of products we’re planning to offer for our initial investment.

When sourcing a private label product to sell using Amazon FBA, samples are imperative.

As there can sometimes be a significant difference in the quality of the product and the specifications you see on Alibaba or other manufacturing sources online, the best way to verify quality and move forward with the best supplier is to order samples.

Once you find potential suppliers, we recommend getting a sample from the top three to keep costs low. (You will pay for the cost to manufacture the product plus the shipping cost.)

A rule of thumb here is that each sample will cost you $100 – could be less, could be more; it depends on the type of product. That's from the supplier to your doorstep in five days or less. If you order the recommended three samples, expect a cost of around $300.

Once you receive the samples, you choose the sample that best fits your vision for the product.

Note: Sometimes a supplier will reimburse you for the cost of the sample, or credit it to your first order, if you decide to place and order with them;. It's worth asking potential suppliers about this beforehand.

Once you choose your supplier, you’re ready to purchase your product!

Suppliers you find on Jungle Scout's Supplier Database, or on Alibaba, will generally have a Minimum Order Quantity (MOQ). In our experience, MOQs tend to be 500 units. So, for the purpose of our estimates, we’ll consider the cost of purchasing 500 units. (You can order a lower quantity if you’re able to negotiate this with a supplier, but generally that means they will charge you more per item; in other words, it may not be worth it.)

We are also assuming our product will cost $4 per unit, including the product cost and shipping. At $4 per unit times 500 units, our expected initial inventory will amount to $2,000.

Note: If the thought of purchasing a large order of products is intimidating, consider dropshipping as your first step into the world of selling on Amazon.

Whatever you choose to sell, you’ll have to pay Amazon for the ability to list products on its site. You can do this with either an Individual Seller Account or a Professional Seller Account.

The Individual Account costs you $0.99 per item sold, and the Professional Sellers Account is $39.99 per month.

Let's plan and hope to sell more than 40 units per month, in which case a Professional Account makes more economic sense.

In order to start selling your product on Amazon, you will need a recognized barcode in order to generate an ‘FNSKU’ (Fulfillment Network Stock Keeping Unit), which is Amazon's proprietary barcode that must be printed on the packaging of all of your products.

And to get your FNSKU, Amazon's TOS requires you to get a GTIN (Global Trade Identification Number), usually in the form of a UPC code.

In 2018, Amazon changed its TOS to state that your barcodes must be from GS1, the leading global provider. GS1 now offers a single GTIN/barcode for just $30.

The following are expenses we recommend adding to your budget to help set your Amazon business up for success.

To help with a successful product launch on Amazon, you will need to use Amazon PPC ads to generate your first initial sales. Since the product will be brand new, customers will not be able to find your product as it will likely be on one of the last pages of the search results.

Promoting your product using Amazon Advertising, will help bring your product to the first page within the search results.

This strategy can quickly improve your sales.

Let's assume you’re running ad campaigns with a lower-end budget of $10 per day. (This is the default amount Amazon suggests.) You can expect roughly 20-30 clicks on your product each day, resulting in 2-3 sales – assuming a 10% conversion rate. While this isn't a one-size-fits-all stat, using PPC will help increase impressions and clicks to your product listing.

A very important step before running ads is to ensure your listing is fully optimized. If you have poor product images or missing information, your ads will not convert into sales – causing you to lose money.

Here are some excellent resources on setting up and managing your Amazon PPC campaigns:

If brand owners want to enroll their brand into the Amazon Brand Registry, you must have a registered trademark. (Note: You do not need a trademark to sell on Amazon.)

The Brand Registry is a program offered by Amazon where sellers can register as the trademark-holding owner of a brand. It helps Amazon identify your product as "official" and awards you additional benefits and selling privileges, such as A+ Content, Amazon Stores, and advanced advertising products like Sponsored Brands Ads and Sponsored Display Ads.

However, sellers need to apply for a trademark and wait for it to be approved before being able to access additional features of Brand Registry. And the trademark process can take several months.

In today's competitive marketplace, other sellers in your niche are likely Brand Registered, taking advantage of the many advanced features. Therefore, your best bet is to invest early and get the trademark process underway. That way, you can get your brand registered as soon as possible.

Just make sure you do your research when creating your brand to ensure you can apply for a Trademark without infringing on any existing trademarks or brand names in the future.

How much does a trademark cost? If you do it through a local IP attorney, it costs roughly $350. You can even apply for a registered trademark yourself through ​​USPTO.gov – for about half the cost of going through an attorney or trademark service.

Note: If you wish to have your trademark registered faster, Amazon recently started an IP Accelerator Program. This program puts you in touch with Amazon-selected intellectual property attorneys and automatically approves your registered brand while you’re waiting for your trademark to be approved by the U.S. patent office. This option does cost a little more though — typically between $750 to $1,000.

The following are costs you do not need to incur in order to start selling on Amazon. But, investing in these areas could help you present a more polished product and launch with a quicker path to success!

A graphic designer is a tremendous asset in adding legitimacy to your brand. They can help you with logos, packaging design, product inserts, photography touch-ups, and infographics for your product listing.

And though it's difficult to put a price on good design, a nice packaging design gives a product a high-end feel and makes it suitable for a higher price point.

For an early product launch, you can find decent rates from talented designers on freelancer hubs like Upwork and Fiverr.

When you are competing against other sellers who may have similar products, it is so critical to have your product stand out from the crowd. Great photos help you achieve this.

So, while we are putting photography in the "extra" section, if you’re going to go with just one extra expense, choose this one!

Here are the key attributes to get right:

If you think you need professional help for this, you can get high-quality product photographs starting from $25-$50 per image. If we assume you need eight images and use the power of negotiation, we can cost this expense at $300.

You can use a different model than private label.

For example, you can sell used books on Amazon or other items around your house, create your own handmade items, or do retail or online arbitrage. (Arbitrage is when you purchase a product from one place — such as a retail store or another online marketplace — to sell on Amazon.)

Many sellers found early success using these business models and eventually switched over to the private label model.

You can reduce your startup cost to sell on Amazon significantly if you source your product on Aliexpress instead of Alibaba, since Aliexpress will allow you to order smaller quantities and test the waters before investing in a bulk order.

The downside to this, though, is that you are paying a higher per-unit cost. It also means you are less likely to get customizations and specifications.

If you can, we advise using Jungle Scout's Supplier Database or Alibaba and spending a little more on your inventory. After all, you are building your own private label brand and it's important to get this part right.

In our example, we chose a product that is $4 fully landed, and we chose to purchase 500 to start.

There are legitimate, high-potential products you can purchase on Alibaba for $0.50. So, assuming a $0.25 shipping fee per unit, you could cut your starting inventory costs to $325 (500 units multiplied by $0.75).

Add in the samples ($300, as mentioned above), and the Amazon sellers fee ($40), and you are looking at a $665 investment upfront.

This is about one-fifth the average cost to start a private label Amazon business.

Another key variable is time. If you’re strapped for time and resources and are unable to perform tasks like product research, design, photography and product listing setup yourself, then it will cost more to get started.

Ideally, do as much of the pre-launch work yourself as you can, particularly if you’re a new seller — or even if you’re an existing seller launching a new product.

When the product has launched and is flying off the shelves, that's the time to start outsourcing.

You do not need to incorporate a business in order to sell on Amazon. Although many successful Amazon sellers opt to establish legal structure for their business (like an LLC), they do this further down the road in their Amazon selling journey, when it becomes necessary and financially viable.

A standalone site may be useful in the future, especially if your brand expands beyond one or two products. However, it's an unnecessary distraction in the beginning, as running your own website takes time, money and resources.

Instead, use those resources to drive traffic to your Amazon listing by optimizing your product listing, using Amazon PPC Sponsored ads, and social media marketing.

In other words, if you’re just starting out, keep this one on the back-burner for now.

There are a lot of self-proclaimed "Amazon gurus" who will charge you thousands of dollars or more to "teach you" how to sell on Amazon. And while some of these courses are certainly useful — especially for those who enjoy a classroom-style environment — many are not necessary.

At Jungle Scout, we offer comprehensive educational resources for free. Plus, our software package includes a Sellers Academy with dozens of videos teaching you everything you need to know to succeed on Amazon.

On top of that, we have lots of great informational videos on the Jungle Scout YouTube channel.

As we saw from the survey results above, Amazon sellers say they spent an average of $3,836 to start their businesses

And based on our breakdown of costs and fees above, sellers can spend between $2,790 and $3,940 (assuming required costs plus $650 recommended costs and $500 extra costs) to start a private label business using Amazon FBA.

Now, how much can sellers expect to make from this investment? Check out our research on how much money Amazon sellers make, and learn how to get started with selling on Amazon with our free course.

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Amazon FBA Fees: How They Work and How to Profit as a Seller

Brian Connolly

Brian is a writer and entrepreneur with over 6 years of experience in e-commerce and selling on Amazon.

Hey Brian,

The article covers a wide range of costs that sellers may encounter, such as account fees, referral fees, fulfillment fees, advertising fees, and more. The breakdown of costs is particularly helpful for those who are just starting out and looking to budget and plan their expenses. Overall, it is a well-written and informative post that can serve as a useful resource for aspiring Amazon sellers.

Great information 👍

Good morning my primary language is French I’m a little confused how to start because I’m trying to read its too much reading for me , do you have any place can I go for training because training online is very challenging for me

Hi,

I suggest looking on YouTube for training in French.

Hi,

Do Jungle scout have FBA calculator extension?

CL SM

Hello,

When using the Extension, click on the "Net" price when researching products and it will bring up an FBA profit calculator.

I am interested in selling only my textbooks. Nothing extraordinary. I might have 30 textbooks. I am not sure where to begin and if it is worth selling them in AMazon, Could someone give me ideas please?

Hi Nancy,

Textbooks can be great sellers on Amazon, especially if they are a newer edition. An individual seller account will probably work best for you since you only have 30 books to sell.

Ebay is another good option if you do not yet have an Amazon account set up, as the verification process can take some time.

When you place an order from a supplier, who does the packaging of the product- I realize the product will come in some sort of packaging, but if you have your own packaging with your logo on it – who takes care of that and how is it arranged?

Hi Chris,

You can see if your supplier can create custom packaging for you with your logo and specs. Most I’ve worked with were able to do this with no problem.

I found the blog to be clear, simple, and focused. The step by step and acknowledging the unnecessary pitfalls really gives me confidence to start today; to take action.

Nice article. Just want to check if you have any information on how to get the best items to sell on amazon?Basically, im looking to start selling on amazon. I have some savings that I am looking to invest for a 2nd income and selling on amazon and ebay is one that i am looking that but dont really know how to go about starting up.

Look into our posts on retail arbitrage! You can get started right away with that business model.

After reading this article I am happy to say that I gain much valuable knowledge to start a business. UPC and FNSKU I have confutione. Hope you explain briefly about UPC and FNSKU in the future.

Hi,

Your UPC is the products barcode.

The FNSKU is also known as the "Amazon barcode." It's the barcode that Amazon will generate for your product

Hello, thanks for the article, very informative. Two questions:

1) When you talk about registering a Trademark, do you do this for each product or one time? What if you sell products from multiple categories, do you just use your one trademark on all the products, is this a one time cost, one time exercise?

2) When you do the product research, don't the sales data change over time, for example, doing research on a widget on 9-15-20 and then going through the ordering process, setup process, fast forward three months until you are actually selling, those numbers could look very different by then?

Hi Louis,

Your trademark will be for one brand. If you plan on selling under different brands, your trademark won't apply to all. You sell in different categories as long as the brand name in Amazon is the same. Of course, you don't need a trademark to sell on Amazon, only to apply for brand registry.

Yes, that is true. That's why it is very important to track the products you are researching and look at the historical sales/price data. You want to be sure you are not selling something that is seasonal in the wrong season or just a short term trend.

Splendid! I believe there are many more pleasurable opportunities ahead for individuals that looked at your site.

Complicated but interesting

i m a pakistani unfourtunatly i have nt a llc in us country….any salution

If your country is not approved by Amazon to sell in the US, then you will not be able to register a selling account, unfortunately.

Thanks soo much for all this information.

Hi,

Great article with some really useful information, even given it was published some time ago. Thanks!!

Recently I’ve started exploring setting up my own Amazon FBA and one thing I came across in a really informative YouTube video was ‘ungating’. I hadn't come across this before in my research and generally speaking nearly all ‘How to set up an Amazon FBA for beginners’ sites fail to mentioned anything about ungating and the associated costs. Yet, upon searching specifically on Amazon Ungating, there are a ton of articles available.

Are you able to provide further insights on your ungating experiences and also explain why this isn't included in your ‘required’ costs? Is it a cost you can avoid having to pay and so not necessary to mention? Curious.

Cheers…. Paul

Hi Paul,

"Ungating" is not necessarily a required cost. It depends on what category or brand you are trying to sell. There are companies you can pay to have you ungated in certain categories but the best way is to provide Amazon what they’re looking for. For example, an invoice with at least 10 units purchased. There are many wholesalers available online where you can purchase a small number of items to get ungated in a certain category or brand.

Hello Brian, are you in Linkedin? Would love to connect.Khadevis Robinson

Hi,

Yes, I am!

Useful information , this is what I was looking for to start selling on Amazon FBA.Thank u so much, God bless you.Some people are charging 5000$ for FBA training for a beginner. I have learned so many things here. Once again thank you.From: Mamie

Hi ,I would love more info on starting up a amazon business.Thank youOscar

Hi Oscar,

What information specifically are you looking for?

Hi There

I’m new & I’m considering selling through Amazon since I lost my job due to COVID-19. I don't have any collateral to start a business but I have enough money that I can use since the government gave the stimulus check. How do I start a business knowing I don't have much collateral? I wanna earn extra cash & eventually own a business to leave a legacy for my son in the future. The videos are very resourceful but I’m too overwhelmed because I wanted to dive in already. I kinda want a one-on-one showing me step by step instead of watching the videos because it's too overwhelming for me. Is that possible?

Please let me know

Hi Maria! I’m so glad you reached out about this as we don't offer a coaching service at this point in time. However, there are two resources we offer that may help (if you haven't checked them out already). The first is the 4th season of our Million Dollar Case Study. It walks you through the steps of starting an Amazon private label business, and you can follow along at your own pace to make sure you don't miss anything.

Or, if you’ve already gone through that study, I would check out either our Academy or our Freedom Builder Bootcamp…though the bootcamp has more opportunities to speak with and get help from experts.

This was great infomation.

Hi Dave,

I read your article online tittle, "How Much Does it Cost to Sell on Amazon in 2020". This article outlined the step-by-step approach to follow in other to be successful as an Amazon seller without going through the furnace. I came across this educative piece of write at a time I was contemplating starting Amazon business as a seller.

These information meant a lot to me because I just lost my job, and I said to myself; I am not going back to the job market anymore. Hence, I engaged in research on how to navigate through to success in an e-commerce business. Thank you for helping people like us who does not have enough to pay those exorbitant teachers.

The saying goes that, "where there is a will, there must be a way" Your write up has flood light on those uncleared questions that has been clouding my mind that needed to be answered – I am so grateful! However, I just completed one of the article, I still need to peruse the "how much money does Amazon sellers make and your free course". I know, by the time I finished, I would be better equipped to commence selling.

That being said, I would seek your candid advice or suggestion on how to acquire those tools that could be of help to me finding high demand products at low cost, including manufacturers – eg Jungle Scout as mentioned in your article.

Thank you, Dave. Please, let me hear kindly from you again.

Warm regards,

Daniel Igbru2819127955

This is a great article but you didn't touch on insurance. Should you have sellers liability insurance if you are selling products to people?

Hey Grrambo,

Great question! Yes, for sure. I currently purchase liability insurance in 3-month chunks.

We’re in the process of updating this article, too, and we’ve got a bunch of cool data on what other sellers are actually spending so keep a look out for that.

This article brought me great relief and a sense of hope. It's very informative as it demystifies the secret behind how much is really needed to start an Amazon business especially someone with a lean budget like me. Thank you.

Thanks for this.

Thank you. I’ve been researching many coaching "gurus" and the courses they offer and am glad I held off paying a large amount of $ for their instruction. While each course I’ve looked at offers their own unique insight and information, none of them felt right. I knew if I kept on my journey and kept researching I would find all the information without the need to spend money unnecessarily.

This is a great guidance write up , I feel very informed about Amazon process. I’m at a preliminary stage of commencing a business and possibly selling through Amazon, therefore, I’m gathering valuable information to enable me to progress to having my own product and selling on Amazon. I’m living in UK but I think your information has given me some useful insight.Thanks a million times,Josephine

Thanks so much Greg for this info, very helpful indeed

Regards Leigh Lendon

How to do I know what product to buy?

Hey Santacia!

Great question. We’ve got a few videos that will show exactly how to find a product.

You can start here: https://www.junglescout.com/how-to-sell-on-amazon-fba/

With all the information i have seen out there on how to sell on Amazon,i have to say this information if the most honest and informative i have seen.Thanks for keeping it real!!

Thanks John!

We also updated this post for 2019, which includes a few more realistic startup costs. You can read that here.

Hope it helps!Melissa

Do you have a guide specific for Canadian Sellers? thanksigor

Igor,

I don't believe we do yet. Do you mean for Canada's marketplace or as a Canadian seller selling in the US?

How long does it take to sell all of the products? I am looking to private label a hot selling item… Like a need type product i think.

Hi Alexander,

It really depends on the demand and supply of your product. Using a tool like Jungle Scout, you should be able to predict what your average monthly sales should be. When starting out, I don't recommend buying more than 3-months worth of product. In fact, you might purchase a test sample first just ot make sure there's demand for it.

Thankyou, I have skim read this whole article. I will now start again and begin to understand how I can begin to sell through Amazon etc.It appears fairly straightforward, however what about insurance? For example public liability if a customer were to injure themselves using a product I had sold to them and they wanted to complain/sue me for compensation, or goods go missing in transit ?Your advice would be gratefully received,Many thanksJan Ashton

Hi Janet, these are two different types of insurance to consider.

Shipping insurance is something you can include in your contract agreement with your supplier. It will likely increase the cost per unit though, but you’ll know that your products are protected as they move through many hands during shipment!

Product liability insurance is separate, and you can choose to only work with suppliers that carry this insurance or carry the insurance yourself. The cost depends on the nature of your product, and you can speak with a broker for more details specific to your business. You should also make sure you include any necessary warnings and instructions with your products.

We also have an updated version of how much it costs to sell on Amazon in 2019 that you can find here.

I hope that helps a bit!

If you purchase from a manufacturer or wholesaler to resell on Amazon, do you have to create your own listing as you do with private label?

For example, if I start my selling FBA, buy a product from a wholesaler who ships directly to Amazon, how does my product get listed to sell?So far, I haven't read anything about that. Thanks, Dixie

The one thing that all Amazon beginner "budget" advice always leaves out is the cost of inventory for the second order… If the product is a winner, and selling at a reasonable pace, you want to avoid a stock outage. The leadtime for manufacturing and shipping to get a second order in to your saleable inventory would usually dictate placing the order before sales have generated enough capital to reinvest. I would add another $2000+ to the startup costs for this purpose. Future orders will probably be covered by the revenue from the first order by then….

This has been a very helpful reading. However, I am still struggling with the question: how much inventory do I need to send to Amazon warehouses for a new launch? Does Amazon establish a minimum depending on the product? What happens if we run out of inventory in Amazon's warehouses? Is there a penalty? If you could help me more to clarify, I would really appreciate it. I am based out of the US. So you can imagine the high importance of having a deep understanding of all the model.

Hi Brenda,

When I started, I only sent 100 units. And I’m glad I did. I accidentally set up a promotion wrong and gave away over 100 free items. So only sending what I needed prevented loss.

Amazon wants you to send enough product to fulfill orders. That number depends on your sales, of course. And with their current push for 1-day shipping, they want to make sure they have plenty of inventory in all their locations.

Of course, if you have too much inventory, you’ll owe long term storage fees–but don't worry, it's pretty hard to get LTSFs. Only one of my products ever gets hit with it and it's a stinker. The rest move too fast to accrue additional fees.

If you run out of inventory, there's no penalty other than lost sales. It can briefly affect your conversion rates, too, which may hurt your sales velocity metrics.

But I’ve been out of inventory for two or three months before and once the inventory returned my product bounced right back.

I think I read somewhere on jungle scout that if you buy upc barcode from some third party website for a cheap price that they will work but over here you said that we have to buy from gs1 for around $250 and have to pay yearly too to maintain. I never heard of paying yearly or paying $250. Never heard of that.

Noaman,

Interesting points.

You’re free to use any service you like. But the one Amazon suggests is GS1. In my experience, it's always best to follow what Amazon says to do.

Very excellent article

Hi Greg and the JS team,

First thanks for all your info and guides, it is by far the best out there.

I have a question, what is the different between trademark and Brand name.

There is any Live Training in Abu Dhabi to learn like class room where i can ask question

Hi and thanks for the great article!

I have a question :

Is it safe to give away products at 90% discount? Can someone buy all inventory and sell them under my listing cheaper?

Thanks

I am completely new to FBA – have not started. Definitely good info but most useful would be a summary table of all selling costs both needed and optional. Info is sprinkled throughout the article – a concise summary or table in one place would be the best reference. Do you know if that's available anywhere. Still not sure if I can make money and what it takes to do that.

Thanks for the idea, Kelly. We might be able to pull together a useful infographic for our readers, but as you can see many of the start-up costs are optional and vary based on the individual. That's why we try to break it down as "Must Have" costs that we estimate as $2580 (using a $4 product as the example), "Nice to Have" costs estimated at $650, and "Luxury Items" that we estimate $500. All in all, that totals $3730, but again that's a general estimate we’ve made. A lot of these costs depend greatly on the product you choose.

Hopefully we can better address your startup cost concerns in a future blog post!

higreat articlebut do you believe the same can be applied to Amazon India store.thankspiyush

Hi Piyush,

I’m my experience, India has much different margins than in the US. Having said that, you’re also a lot closer to manufacturers there in India. I think Amazon's fees are also less, too.

Really covering all aspect of Amazon fba in the article, thanks a lot.Just want to know whether someone can start Amazon fba business if he is an Indian and working in Saudi Arabia.Is just credit/debit card enough for him?I want to indulge in Amazon FBA business.

Hi Habeeb,

Not sure! I know you can sell from Saudi, but you might need to speak with an Amazon representative to figure out how to organize your business in order to sell.

Great article! I think I’ll be starting with the "lower-cost-per-item" option first (approximately $715 to start), then moving to create my own brand by reinvesting the earnings from the lower-cost-per-item option back into it. Let's do it!

Thank you for this article, super helpful and informative for new sellers. My question is on your example, how realistic is $4 landed product? How is the quality for product that cost that low?

Also, I am unclear on brand registry and how trademark works. After selling your PL, I as a seller need to apply and be approved for trademark in order to keep selling on Amazon or is this so no one else steals my brand? Thanks in advance.

Hi,

First, that for all the content you provide. Great Stuff!

My Wife and I have watched just about all of your material and now have the funds needed to start, but are still nervous to pull the trigger. Do you offer any consulting or one on one coaching opportunities? That would really put our minds at ease.

Thanks! -John

Hi

I am Middle east based and would like to start amazon FBA. Just one thing, do I need a US tax id and bank account? I have bank account in my country of residence but we do not have tax here so no tax id?

Thanks ✌

when you sell on amazon buying from walmart, most of items have walmart sticker. so my question is, before shipping items to amazon, do we need to remove walmart sticker? please explain the process

Hi Raj,

That's probably a good idea. Make sure that the products aren't gated/banned either before you try to list.

Hello, I followed the Million Dollar Case Study step by step. In the document it says that the shipment cost is around 25% of the item. It means, if an item costs USD 3 in China, the Total Cost of Shipping will be around USD 1

I am negociating my first order with a manufacturer in China for around USD 2000 . When i use Freihtos,com to stimate the costs of shipping and forwarder, its between USD 1200 and USD 1700, depending of the forwarder and terms i choose.

Even if i choose the USD 1200 option, it is more than 50% of the cost of the total cost of the order.

Am i maybe missing something?

Thank you very much

Hey Juan Pablo,

When we discuss costs related to a % of the item, we’re referring to the retail price of the item, not the manufacturing cost per item. I think that might be what you’re confusing, so I hope that helps to clarify things!

Melissa

Hi guys,

We are based out of india and are keen on trying US market though we will start off our sales in india to see and test the platform. Can I get some information on the import duty and how the direct shipping from to amazon US warehouse from china would work?

Also what is the taxation liability for vendors selling from other countries in US? Thank you

Regarding giveaways, Amazon's TOS states "You may not provide compensation to buyers for purchasing your products or provide claim codes to buyers for the purpose of inflating sales rank."

Does utilizing JumpSend not conflict with this? If so, how does it not?

Don't want to set myself up for a suspension 😉

A landing page should be much appreciated when included since we are building brand and wanted to branch off of amazon in the near future. We should build our list just in case.

This is a masterpiece!!!!! God bless you.Thank you

Not sure how to start

Start with the Million Dollar Case Study: https://www.junglescout.com/blog/product-research-amazon-fba/

Pretty! This has been an incredibly wonderful post. Thanks for providing this info.

Hi Greg and the JS team,

First thanks for all your info and guides, it is by far the best out there.

I have a question which is not regarding the costs but more regarding time frame.

I am currently doing my amazon business plan and i was wondering how long it takes the process of finding a product until it is listed on amazon?, also how long it takes till you start to see profit?

Thanks a lot,Adi

Hey Adi,

On average, your probably looking at 60-90 days from research to launch. My first product I researched in early December 2015, purchased the goods later that month, launched it Feb 2016.

Hi GregThank you for this great informative article. I have a question. As soon as I know we have to pay for the Amazon Fee while doing give aways. So if you are going to do 50 give aways and 4,2 dollars Amazon fee per product then it makes 210$ which is not really neglectable I guess. Then why didn't you count that or did I miss it?

Thank you!

Hi Altan,

Basically, fees come in two types: the referral fee, which is a percentage of the final sales price (even if there's a promotion on it) or at least $1.00 and the FBA fee, which is the flat cost to ship the product.

So if you give away a product at 90% off its normal $25 price, you’re selling it for $2.50. Subtracting the fees $1 + $3 or so for FBA), then you’re at a net loss of $1.50 plus the cost of goods sold. While this may not sound desirable, it does, however, help get your product noticed in Amazon's search engine which leads to higher sales down the road. Consider it a cost of doing business.

Thank you for this great update.I am from Africa how do i get the tax system it is required for me to be able to sell as an FBA on i really want to start but the tax get me thinking.i need help on this.

Thanks

Hey Peter!

Not sure how to get it from Africa (nor can we give legal/tax advice here beyond the simple stuff), but you might see if we have an international business expert on our other platform, https://www.junglemarket.com where there's freelancers that can look into this for you. Hope that's helpful!

Thanks for this great info Greg and Jungle Scout team. Trademark Engine and starting now are the two biggest takeaways I got from this post.

So where do you get the product from? And what are the product websites that people are using?

Hey Zac,

If you’re doing private label selling, many sellers source from Alibaba.com, which is sort of like an Amazon but for manufacturers and suppliers.

My husband and I are looking into selling on amazon. this page is real helpful. Can you please tell us if there is a class that we can take or a program that is not a scam and that does not coast a lot of money would like to save as much as we can to buy product. Thank you so much for your help in advance. I wish every one the best of luck.

Hey Sandy,

We offer a ton of free information right here on the site.

https://www.junglescout.com/how-to-sell-on-amazon-fba is a good place to get started. 🙂

Hello, thanks for a wonderful program and selfless content. I have several questions though,can someone from Africa participate in the private product sale on Amazon as it's to guys in US or UK?If the answer is yes, then what advice do you offer?let's say the answer above is still yes, what advice can you offer on how to get photos of the products for marketing especially for someone on low budget and aiming to utilize the Amazon's FBA program by sending the product direct to Amazon and still maintain quality?pardon my many questions…once the product is manufactured which is the best means of transportation/shipping to Amazon?can you give a deep walkthrough of the shipping process from manufacture to US dock to Amazon stores?what are the US customs requirements once the product arrives/ docks?and last can jumpsend app support sellers from Africa? if not when does this happen or what other alternative can you suggest?

Thank you

Hello Greg and Team,

I read an article before in your site that mentioned the Startup Cost comes around 10000$ and it guided how to raise fund from Kickstart. But here you are mentioning only 2000$ .Which one we have to Consider.

Your tuts are rocking guys. 🙂

Hey Kadar,

The $10k is sort of an extreme example. But you can start up a product with $2000 just as easily. It all depends on how much you want to put into it.

& In my first year: Tax Advisor € 3.300 & Meetings + Online-Courses € 1.476 & Telephone, Internet €800 & Office supplies €358 & postage € 58 & Bank-Fees €116 & extra material for packing (Amazon drop-test failed) €2.137 & Insurance € 826 & travel expenses €1.150 & literature € 120.

You have to sell a lot of items to cover all these "additional" costs – noone tells you that!

Hello Greg and team,

There are no FBA fulfillment and storage fees in your costs calculation, could you explain why?

Hey Artur,

This article outlines the upfront costs associated with getting started selling on Amazon. Things like FBA fees are slightly different because you will only start paying those once you have launched your product and are storing it in the FBA warehouse. If you need more info on the full process, make sure you check out the Million Dollar Case Study which documents each step of the way, including profit calculations that take into account things like FBA fees!

Many thanks,Kym

Great article! Thanks a lot for sharing this info!

Awesome! So encouraging…ready to fly in 2018.

Please explain Costs if you use drop shipping and plan to sell on Amazon

Hi Greg and Glen,

I am in Sydney, Australia and here Amazon just launched, however I would like to start selling in the US. I am watching your Million Dollar Case Study and THANK YOU, THANK YOU FOR IT!

Since I am about to start, could you recommend some resource to help me start selling in the US from Australia? Things like basic requirements I.e. bank and account – if I need one in the US or there is a way around it?, Should I be looking into managing taxes? Etc…

I look forward to hearing from you!

Best wishes!

Roman

Hey Roman,

Awesome – glad you are enjoying the case study and great work on getting started yourself 🙂

Here's a few resources which I think should help you:

1. Our in-house expert Lenny (who also sells in the US as an Australian, covered the topic in this video here: https://www.youtube.com/watch?v=R6rflThl79o2. This post from the Million Dollar Case Study covers legal set up for selling in the US: https://www.junglescout.com/blog/tax-legal-structure-for-amazon-sellers/ As an Australian resident you want to pay attention to the section titled "Non-resident Aliens"

Hope this helps you Roman! This isn't definitive legal advice and we alway recommend speaking to a professional or an accountant if you are still stuck. But those guides should give you an idea of the most common ways to get set up and start selling.

Many thanks,Kym

how much can i start amazon dropshipping and what is the best tools i should use

[…] Now, we will touch on how YOU can find the best products to sell on Amazon and eBay. Keep in mind, starting a business based on Amazon or eBay requires you to invest some time and money. […]

Awesome blog. Should the Jungle Scout Web App and Chrome extension be added to luxury items?

Hey Ozzie,

Glad you enjoyed. We would recommend that you definitely need a reliable product research tool, like the Web App or Extension, in order to find and verify product ideas successfully. This is the cornerstone of building success as a seller. We didn't include it in this list as it was mentioned as a precursor to launching (you need a product to launch after all). But whether you choose JS or not, reliable product research is a must. It really helps minimize your risk and speed up the whole process.

Thanks,Kym

Hi, hope everyone is well.

I have a question about the shipping from China. I am looking at shipping a product from China to the UK and have looked at a lot of resources online and have got quotes also. It says that my shipping would be around £1,000 for 5CBM 375KG which is 600 units worth of products. I feel this is a bit excessive and i’m not sure what to do.

Hey Tom,

That does sound like a lot. Are those quotes for air or sea?

I would advise that you check out this post from our latest case study which covers shipping and duties. From there, try getting quotes from an experience freight forwarder and see if that helps. They should also be able to answer any questions you might have. In any case you will need a freight forwarder for this process so it's worth finding the right one for you at this stage.

Hope this helps!Kym

Thanks Grey for this very Informative and useful article.It really does come in handy for someone like me looking to start FBA.I have a question – would you place getting an amazon FBA course in the "must have", " nice to have" or "luxury items " ?How important is getting a course before starting FBA? Does it contribute to the success rate?Thanks for responding .

Hey Andree,

I would say that for most new sellers, there are lots of topics where it is useful to have a helping hand to navigate your way through it.

There are plenty of paid courses out there, but I would also suggest giving one of the Jungle Scout case studies a try – they’re completely free and offer a transparent step by step guide on what it takes to launch and sell a product on Amazon.

You can find them here:Million Dollar Case Study US Million Dollar Case Study Europe

I would also strongly advise joining our Facebook group, which is the largest group of it's kind and has an excellent community for support and encouragement.

Good luck and let us know how you get on 🙂

Kym

Hi Greg,How do you decide on the size of the 1st order? Do you look into consideration the sales numbers and production timeframe?

Hi Urska,

We decided upon a number that was a reasonable figure in which we could launch with promotional giveaways for some time, start generating organic sales, and prove that the product was a winner before having to reorder. That figure was 1000. Depending on your product and ability to invest in upfront inventory and marketing, anywhere from a few hundred units to 1000 or more could work. all depends….hope this helps!

Gen

Hi Jungle Scout Team,Great article and great case study. Haven't come across this yet, but what is the average start to product launch time for a new branded item? Thanks

Hey Rodney,

It depends on how quickly you work through the process, we managed to launch a product within about 16 weeks for our latest case study and you can follow the steps of what we did each week here.

Sometimes it can take a little longer depending on what product you are sourcing, how long negotiations and manufacturing takes and which shipping method you choose. I’d fully recommend reviewing the case study though to get a real in-depth view of it 🙂

Hope this helps!Kym

Hello Jungle Scout team:

I have a few question in regards to GTIN. I see that Amazon FBA provide UPC service for 20 cents a piece. Is that just a service for them to attached the UPC onto your product individually ? Does that mean we still need to obtain the GTIN from GS1? Thanks a lot!

Johnni

Hey Johnni,

Could you share a screenshot?

I think this might be a UPC labelling service or something like that. I don't think Amazon can sell UPC/GTIN codes, especially not for 20cents.

For more information on how to obtain a GTIN and the new brand registry, check out this post.

Hope that helps!Kym

What about UPC cost? Are UPC's necessary? I thought I read where all products on Amazon required them.

Hey Blake,

Great question and yes you are right! You do need to consider UPC's and associated costs. This article has just been updated for 2017 and we have included information about this and more!

Thanks,Kym

Jungle Scout what a great article and thank you so much

Glad you enjoyed it, thanks!

Hi Greg:

One question that I think needs to be answered when referring to money needed to get started. A more pertinent question is…"how many units of the articles I will sell should be kept in inventory"? Obviously if I am selling a fashion item, what amount of units per style and per color should be inventoried? Clearly if I order X amount of units and they sell out fast, I will be without stock to sell and essentially would mean that I’m out of business. I’m sure that this will be looked at quite negatively by Amazon. On the other hand, bringing in too many units of a style is dangerous because I don't know if they will sell at all. Do you have some "simple" way to start out with inventory to be "safe" and yet not too conservative. The fashion business is dangerous itself because of so many variables in styles, colors, etc., so I’m just trying to get my feet wet so that I can get the business started without making poor decisions.

Thank you for your help.

Hi Greg,To create a own brand does Amazon has any specific requirements such as it should have been posted in your own website or any other legal document requirements.Or we can just make our own logo to list it in Amazon FBA.Please support me i am trying to sell private label product in Amazon but i lost somewhere because of these requirements

Very good article. Your cost breakdown is accurate and realistic. However, is there a way for someone who has much less money or credit to start with to become a successful seller with the help of Jungle scout and Amazon?If you get an American supplier who offers blind dropshipping, you could start first less, no?

I want to find out about subscription policy of the jungle scout .

Feel free to check out all the details on our homepage, or we would be happy to answer any questions at [email protected]scout.com

So, if I invest $2000, I will make $2000. Does this mean that my net profits will be zero, or did I miss something>

$2000 profit for every $2k invested – 100% ROI 🙂 In other words, $4k revenue for $2k of expenses.

Hi Greg!

Great article!

What is the time frame you are looking at to double your initial investment?

Hi Greg, must say I’m a huge fan of everything Jungle Scout does, and I can't wait to get started with my own PL products. With regards to this question on ROI, I’m a little bit confused… if you make $2000 profit from each $2000 invested, won't you then simply have to "reinvest" that $2000, say in new stock, for example? Then won't you be stuck on that same $2000 profit level that you achieved from the first initial $2000; If that makes sense? Please let me know if I’ve missed something obvious 🙂 Keep up the great work 🙂

Hey Mike,

Certainly in the first few months of selling a product you will be working towards a "break even" point. We actually conducted a survey about this with over 2500 sellers and we found that on average, revenue grows by 14% per month in the first few years, and after 18 months monthly profit is equal to 66% of investment. When we launched some of our Million Dollar Case Study products, we found we hit the break even point between 3-4 months, and after that, the profit is significant enough to reinvest in more inventory and still take home a profit.

Hope that helps 🙂Kym

Very nice blog post. I certainly appreciate this site. Continue the goodwork!

Hey Greg,

Thanx for sharing the above info. I’m a little confused, you haven't mentioned anything to do with other Amazon fees nor have you mentioned anything around having a PPC budget, or is this the $300 for sponsored ads.

CheersBrian

Sponsored products is the same as PPC 🙂 The good news about PPC is it isn't necessarily cash out of your pocket, by the time you get the PPC bill, you can just have Amazon remove it from the revenue generated from sales. Yes, it's a cost but likely not negative cash flow.

Hello Greg and team,

It is clear about PPC. But why FBA fulfillment fees and storage fees are not included in the calculation?

FBA fulfillment fees come out of the individual product sales. And storage fees are somewhat marginal until your products have been there for six months or longer. But you can probably say it's roughly 0.5% or less of your sales until you hit long term.

Hey Greg,Another great and informative post as always! I was wondering though, don't you need to pay the money to get a UPC code for your product? Thanks as always for the great info!

Hi Greg

Appreciate very much all your efforts.

But when it comes to professional Amazon seller account, for US citizens, I think it's ok to start without a company but I’m a Sri Lankan in Singapore.So when it comes to us, there is no marketplace here in Singapore, so obviously, it's US for me and Amazon requires a tax id, that leads me to first create a company before everything else simply to have a tax id and a US bank account.

If you can assist on this, it would be great.Already using JungleScout webapp & chrome extension.It's a pleasure using them.

BRNilanka

Hi Nilanka,

I saw your post, my name is Channa Weeraman, I am from Gampola originally . Living in Texas. Let's get in touch. Email me.

[email protected]

Hi, Nick,I found this question in the forum:

"But when it comes to professional Amazon seller account, for US citizens, I think it's ok to start without a company but I’m a Sri Lankan in Singapore.So when it comes to us, there is no marketplace here in Singapore, so obviously, it's US for me and Amazon requires a tax id, that leads me to first create a company before everything else simply to have a tax id and a US bank account."

And your answer:

"I saw your post, my name is Channa Weeraman, I am from Gampola originally . Living in Texas. Let's get in touch. Email me."

The same question bothers me as well – would you be so kind and share your knowledge about this situation? If I’m not USA resident, do I need open LLC for trading in Amazon?

Kinds regards,Vytautas

Hi Greg,Thx so much for all your information and videos, they have been awesome. I am a new user to Jungle Scout and love it. I just have a quick question, in your opinion is it better to have your inventory shipped straight to Amazon from China or do you always have it shipped to you first? Why or why not?

Hey Tony,

Thanks for the comment, great to hear that you are finding value in Jungle Scout!

Greg has recommended in previous webinars to get your initial sample and the first shipment sent to your house (or someone who can evaluate the quality), just to ensure that the manufacturer has met the agreed upon expectations. After that, once initial trust is built between you and the supplier, it is cheaper and faster to send directly to Amazon's warehouses. You can get photos or videos from the manufacturer on subsequent orders to help ensure product quality. Hope this helps!

Gen

Thank you o much for the information. I have JUNGLE SCOUT.

Hi Greg.I appreciate the effort you’ve gone to, to lay everything out. One question though, what are Amazon's payment terms? With my Amazon affiliate site I get paid 2-3 months after the sale. If FBA is the same, wouldn't you also need to account for the cost of keeping your product in stock until you received the first payment?

With FBA you get paid every 2 weeks. Much quicker than with their affiliate program 🙂

Thanks for such a great post and creating Jungle Scout. I could not operate without it.

Hi Becky,

Glad to know that Jungle Scout has been essential to your business, that's great to hear!

Gen

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