Amazon FBA startup costs are between $100 and $20,000+. This is according to Amazon FBA coach Camron James of Amazon Wealth Accelerator. These startup costs go into mandatory costs, some recommended costs and optional costs. The Professional Seller account is recommended for long-term success. This costs $39.99 per month, while the Individual Seller account charges $0.99 per item sold. Additional startup costs include product research tools like Jungle Scout ($49/month). You also need to order product samples ($200) and purchase initial inventory (at least $3,500). International shipping, import duties, and storage fees may range from $1,000 to $3,000 or more.

Many factors go into Amazon FBA startup costs. This includes the Amazon FBA business model used, production cost, and product source. Of these factors, the business model used has the greatest influence on the startup costs. Of the three Amazon FBA business models, private label has the highest startup cost and the lowest startup cost in retail arbitrage.

The competition level of the products' niche can also influence the startup cost. The more competitive it is, the more difficult to get your products noticed. So, you might end up paying for advertising. Jungle Scout recommended spending $5-$10 per day on ad campaigns and increasing it gradually. According to SellerSnap, approximately 17% of sellers start their Amazon venture with $500 or less. Over 54% of Amazon FBA sellers report using the private label business model. This is according to a 2023 survey of over 2,600 Amazon sellers by Jungle Scout.

As such, the startup costs displayed here will focus on Amazon FBA for private label sellers. Top Amazon sellers like Kevin King of Freedom Ticket and Tim Sanders of Private Label Masters also endorse this model. It provides an opportunity to build a long-term business on Amazon Marketplace. Additionally, it is the business model with the highest profit margin potential.

This article covers the Amazon FBA startup cost, from the minimum amount to the optimal cost. Some costs listed below are mandatory or recommended, while the rest are optional. I have been earning online for over 10 years now and I have seen the growth of Amazon FBA over the years. I understand fully that it has pros and cons, but one thing I recognize is how the fees have increased over the years. 

Amazon Professional Seller Account ($39.99/month)

The Amazon Professional Seller Account cost $39.99 per month. When selling on Amazon, you can choose between two plans on Amazon Seller Central. These are the Individual Seller account and the Professional Seller account.

If you want a sustainable Amazon business, use the Professional Seller account. This plan allows you to list and sell an unlimited number of products for a fixed monthly fee. This makes it cost-effective for sellers with high sales volume.

In contrast, the Individual Seller account charges $0.99 per item sold. Although it seems small, this can quickly add up. It can become more expensive for those selling many products.

By choosing the Professional account, you gain access to extra tools and features. This can help you scale your Amazon FBA business more effectively. 

Product Research Tool ($49-$129/month)

When starting and Amazon FBA, use product research tools like Jungle Scout, starting at $49 per month. It gives valuable insights into market demand, competition, and profitability. These pieces of information help you decide which products to sell.

Launching an unsuccessful product on Amazon is both risky and demotivating. It can make you lose money, time, and effort. That is why it's necessary to use a reliable product research tool.

Alternatively, you can also consider Helium 10. It offers a range of plans from $39 to $99 per month, depending on the features you need. Both tools are popular among Amazon sellers. Their functionalities help enhance your product research and improve your chances of success.

Product Samples ($200)

You need to spend $200 on your startup costs on product samples. This is a key step in avoiding unprofitable and low-quality product choices. Seeing a sample helps you make an informed decision on whether to sell the product. This is especially helpful if you are getting something customized.

Order samples from different suppliers selling the same product. Then, check the quality, features, and value of each option before you make a choice. This helps you identify the best supplier and product. Choose the ones that meet your standards and customer expectations. Ultimately, leading to a more successful product launch on Amazon.

First Order of Inventory ($3,500) 

Set aside at least $3500 for your first order inventory. Most manufacturers require a minimum order quantity (MOQ) of 500 units. So, you can expect to purchase at least this amount in your first order of inventory. Quartz estimates the average price of a product on Amazon to be $26.86.

The average profit margin for a private label product is around 25%, according to the Motley Fool. This means that the per unit cost of an average Amazon product is under $7. Using this price, you probably need to spend at least $3,500 on your first inventory. 

However, some suppliers require new distributors to invest at least $5,000 or more. This number could easily go up, accounting for other fees. Also, you can negotiate for a cheaper or wholesale price if you're willing to invest in a bigger inventory. 

International Shipping ($1,000 to $3,000)

Amazon sellers usually spend around $1,000 to $3,000 on international shipping. Many Amazon sellers import products from overseas manufacturing hubs. Around 71% of Amazon products are sourced from China, according to Jungle Scout. So, you need to pay a hefty international shipping fee to bring these products to you.

Luckily, there are many freight forwarding services available, like Freightos or Guided Imports. The shipping costs can be highly variable. It also depends on factors like the product’s weight, dimensions and the season. 

Import Duties and Taxes($35 - $100)

Be prepared to spend around $35 - $100+ per overseas shipment additional costs. If you’re importing your Amazon products from overseas, it is subject to import duties and taxes. There are 4 types of duties and taxes to consider when importing goods into the United States. This includes the following:

• Customs Duties. This is implemented by the U.S. Customs and Border Patrol (CBP) on imported goods worth $800 or more. Customs duties can be between 0% and 37.5 %, with 5.63% being the average, according to DHL. 
• Excise Tax. This is collected by the Internal Revenue Service (IRS) for excise goods. The excise tax applies to products like tobacco and liquor. 
• Merchandise Processing Fee (MPF). This fee is levied by CBP, depending on the type of entry into the United States. For formal entries, there is a fee rate of 0.3464% of the shipment's value. This usually involves commercial shipments valued at over $2,500. However, this fee is subject to a minimum of $31.67 and a maximum of $614.35.
• Harbour Maintenance Fee (HMF). This fee should help cover the costs of maintaining and improving U.S. ports and harbors. The HMF is calculated at 0.125% of the value of the cargo being shipped.

UPC Barcode ($30 for a single UPC barcode)

Amazon requires all products on its platform to have a unique product identifier which can cost $30. It is typically provided by a UPC (Universal Product Code) barcode. Amazon recommends purchasing UPC barcodes directly from GS1 (Global Standards 1). It is the official organization that issues and manages UPC codes worldwide. Amazon verifies the authenticity of UPC barcodes against the GS1 database.

If it does not match, your product listing could be removed or flagged. To avoid issues with your listings, make sure they are properly registered. Comply with Amazon's requirements to continue selling on the platform.

Storage Fees ($25-$100+/month)

FBA sellers pay around $25-$100+ storage fees per month to keep their products in Amazon's warehouses. Think of it as a rent until the products are sold. It is based on the daily average volume it occupies in Amazon's fulfillment centers. The cost of storage also varies depending on the time of year and the size of your products.

Typically, Amazon charges FBA storage fees ranging from $0.56 to $2.40 per cubic foot. During the non-peak season, fees are usually lower. Meanwhile, they increase during the holiday season. This is because of the higher demand for storage space.

Product Liability Insurance ($99/month)

A product liability insurance cost around $99 per month. Amazon requires sellers with over $10,000 in monthly sales to get product liability insurance, with a minimum coverage is $1,000,000. This insurance protects sellers against claims related to product defects. It also covers injuries or damages caused by their products.

According to AdvisorSmith, product liability insurance typically costs around $99 per month. This cost is for small business owners in the US. Getting this insurance is essential for maintaining compliance with Amazon's policies. More than that, it protects your business from potential legal and financial risks.

Amazon Ads ($300- $500/month)

Amazon FBA sellers spend around $300.00  to  $500.00 per month on Amazon ads. Running an Amazon PPC ad campaign is the most efficient way to drive traffic on Amazon platform. This is especially necessary for a brand-new product listing that has no rankings yet. Most times, you need to run PPC for a while so that you get reviews to rank.

The Amazon platform offers a range of advertising options. This includes Sponsored Brands, Sponsored Products, and Sponsored Display ads. Sponsored Products is the most popular ad type, accounting for 75% of Amazon PPC users. This ad type is effective in promoting individual product listings.

Investing in PPC also gives you access to the Amazon Advertising Reports. These reports provide valuable data on product performance. help you plan, optimize, and measure your marketing strategies more effectively. This helps you maximize your return on investment. 

Promotional Giveaways ($200)

Be prepared to shell $200 for promotional giveaways. As a new seller on Amazon, getting product reviews and building customer loyalty is critical. The quickest way to gain traction and boost product visibility is through giveaways. There are different promo options available that don't break your budget.

Many sellers opt to offer a 100% product rebate on a few products. These are considered freebies that can attract early buyers and encourage reviews. Alternatively, some sellers prefer to provide a deep discount for a limited time. This can be done right after product launch to drive sales and increase visibility.

Trademark ($350–$600)

A trademark provides legal protection for your brand and cost around $350-$600. It helps safeguard your Amazon product against counterfeits that steal your sales. A registered or a pending trademark application is needed for Amazon Brand Registry. It is Amazon's program that prevents others from selling counterfeit versions.

It gives you more control over your listings and provides tools to make it more professional. It also comes with advanced search tools. In short, it is a proactive measure to protect your intellectual property.

LLC Formation ($35 - $500)

It can cost around $35 to $500 to file an LLC or Limited Liability Company, a legal business entity. Many Amazon sellers elect to operate their Amazon business through an LLC. This is because it provides benefits like:

• Liability protection
• Tax benefits
• Enhanced credibility among suppliers
• Improved ability to separate business and personal finances

According to Forbes, aside from the initial fee, you also need to consider the ongoing yearly LLC maintenance fees. 

Quality Control ($299/working day)

Quality control services cost around $299 per working day for factory inspection in China. Quality control means ensuring that products meet the agreed-upon quality standards before purchase. It is recommended to use this service before buying products to sell on Amazon. Low-quality products can lead to bad reviews, affecting sales. It can also get your Amazon account suspended.

Amazon has a customer-friendly return policy, which means it's favorable to them. You can expect lots of product returns, especially if it doesn't function properly. This can negatively impact your business. Thankfully, many product inspection services can verify product quality before shipping. This helps you maintain high product standards and protects your business on Amazon.

Freight Insurance ($50+)

Sellers need to spend $50+ for freight insurance to protect their cargo during transportation. The cost depends on the product value and it covers your Amazon products against risks such as theft, damage, and accidents. It protects against unforeseen events that may occur while in transit. Getting freight insurance provides peace of mind since you are financially protected.

The cost of freight insurance is typically 1% to 2% of the value of the goods being shipped, according to Freight Run. This is a good way to guard your products and minimize potential losses during shipment. 

Design Work ($200–$400)

Design costs around $200-$400 and includes expenses for logos, packaging, product inserts, and other branding materials. Many people have the skills and software to handle basic design work themselves. This is not very mandatory for an initial product launch and can be postponed until later.

However, if you want your brand to look more professional, you need to invest in quality design work. Since design costs can vary widely, new seller must consider their unique budget. Determine how much you're willing to spend to enhance your brand’s presentation.

Amazon A+ Content Assistance ($175- $780)

Amazon A+ Content is a feature available to sellers with trademarked products and costs around $175 to $780. It gives access to advanced options for product listings. This includes rich text, high-quality images, HD videos, banners, and more. This enhanced content allows sellers to showcase their products more effectively. It also engages customers with a visually appealing presentation.

According to Amazon, using Amazon A+ Content can increase sales by up to 20%. You can hire professional designers and videographers to create high-quality images or videos. Platforms like Fiverr and Upwork offer these services at affordable rates. 

Professional Photography ($300–$500)

Most professional photography services cost around $300-$500. Using professional photography for your Amazon product listings helps your products stand out. This is crucial in a highly competitive marketplace like Amazon. According to Helium10, high-quality photos can boost your sales. Use images that can capture the attention of customers. It has to convey the value and features of your product effectively.

You can find qualified Amazon photography services through Amazon's Service Provider Network (SPN). You can also use freelancing marketplaces like Fiverr to hire at competitive rates. 

Second Batch of Inventory Budget ($3,000+)

You should have $3000+ capital set aside for a second batch of inventory before your first order sells out. Ordering additional products supports sustained growth while waiting for revenues. This allows you to maintain sales momentum while you're ahead.

Additionally, you don't want to go out of stock while just starting. Running out of inventory can hurt your Best Seller Rank (BSR) and organic keyword ranking. Having consistent product stocks preserves your visibility and competitiveness. 

Accounting Software($25/month)

Amazon sellers need to invest in accounting software that would cost around $25 per month. Although, many new Amazon sellers handle their accounting in the beginning. If you have basic business skills, this is certainly manageable. However, if you want to grow your FBA business, you'll need better financial tracking. You need to manage expenses, taxes, and other financial aspects effectively.

A good option for new sellers is QuickBooks "Simple Start". This easy-to-use software helps you keep track of income, expenses, and taxes. Maintaining accurate financial records as your business expands is crucial for success. 

FBA Training Course ($500–$5,000)

There are many Amazon FBA courses ranging from $500-$5000. In my experience, the best way to begin is by taking a quality course, regardless of price. My recommendations are Private Label Masters or AMZ Champions 4.0.

After reviewing many Amazon courses for years, we have come up with our list of the best Amazon FBA courses. These courses can help sellers succeed in building and growing their FBA businesses.

Social Media Marketing Budget ($0-$500+/month)

Before you start, set aside around $0 to $500 per month for social media marketing budget. According to Jungle Scout, 41% of Amazon sellers use social media for promotion. Social media marketing involves sharing engaging content to increase organic traffic. It can also entail running paid ads, such as Facebook Ads or Instagram Ads, to reach a wider audience.

Some sellers also collaborate with influencers to promote their products. This helps generate more brand awareness and sales. By working with influencers, you can tap into their already established audience.

Inventory Management Software

($0- $250+/month)

Inventory management software costs around $0-$250 per month. It helps to automate inventory management tasks and enables efficient reordering. Amazon sellers with large amounts of multiple products can benefit from these tools.

Softwares like Skubana, or Zoho Inventory, can keep track of inventory levels. This ensures there are enough products stocked in the Amazon fulfillment centers. This helps prevent stock-outs, reduces overstocking, and optimizes your inventory management.

3 Real Seller Experiences With Amazon FBA Startup Costs

1. Camron James Spent $27,110 on  Amazon FBA Startup Costs

2. Ariana Spent  $9,925 on Amazon FBA Startup Costs

3. Material-Pudding-974 spent $500 on Amazon FBA Startup Costs

Reddit user Material-Pudding-974 claimed spending $500 to start selling wholesale on Amazon. The product was sold in Amazon Canada in early 2023, with a net profit of $11 on each sale. They worked on their business for at least 4 to 5 hours every day to get the product selling on Amazon.

Their biggest mistake was allowing themselves to run out of product inventory. They got the product listed in Amazon Choice, but did not maintain the proper inventory levels to keep it. 

How to Lower Amazon FBA Startup Costs? 

Can I Start Amazon FBA With No Money?

No, you can't start Amazon FBA with no money. You'll need some initial capital to cover essential costs. This includes initial inventory costs and shipping fees. The most affordable way to get started is through the retail arbitrage. This is when you buy discounted products from local or online stores and resell them on Amazon for a profit.

Why Do People Fail on Amazon? 

Is Amazon FBA Still Profitable in 2024?

Yes, Amazon FBA is still profitable in 2024. Data from the Jungle Scout's 2023 State of the Amazon Seller Report said that 89% of Amazon sellers are profitable. However, it is becoming more challenging to maintain profitability because of several factors:

• Increased Competition. The marketplace is more competitive than ever. It has around 4,000 new sellers joining Amazon daily. This makes it harder for individual sellers to stand out and gain market share.
• Rising Fees. Amazon's fees have been increasing over the years. This includes fulfillment, storage, and referral fees. These fees will continue rising, squeezing profit margins for sellers.
• Amazon’s Private Label Brands: Amazon now has at least 118 of its own private label brands, according to CNBC. This means third-party sellers often compete directly with Amazon. They have the advantage of greater visibility and placement in many product categories.

Despite these challenges, sellers who can adapt to the competitive landscape can succeed. You need to invest in product differentiation, optimize costs, and use data-driven strategies. Those who find success with Amazon FBA can enjoy flexible working arrangements. Sellers can generate hundreds of thousands of dollars in income each year.

However, attaining this level of success on Amazon isn’t too common. Data from Jungle Scout shows that around 72% of Amazon sellers make just $25K or less in monthly revenue. Note that revenue does not equate to profit. Additionally, over 59% of Amazon sellers only generate a profit margin between 1% - 20%. Most Amazon sellers can expect to bring home no more than $5,000/month in profit. 

What is the Most Cost-Effective Way to Build a Long-Term Online Business?

The most cost-effective way to build a long-term online business is local lead generation. Building a long-term Amazon FBA business requires huge startup capital. This can range from $100-$20,000+. It also takes years to see profits and success. As such, Amazon FBA isn’t suitable for everyone, especially those without the money to put in. Local lead generation is an online business model that has a higher level of flexibility. It also has an income potential at a fraction of the cost and timeframe of Amazon FBA. 

Local lead generation entails creating websites to attract customers for local service businesses. These websites typically take 6 weeks to 6 months to rank on Google for local search. Once ranking, you can partner with a local service business to take the leads for $500 to $3,000/month. Unlike Amazon FBA, a local lead generation business can earn you passive income with ease. Once you set up your local lead gen site, it requires minimal effort to continue ranking on Google.

Local businesses typically stick with local lead generation agencies for the long run. Local lead generation website usually offer a more reliable and affordable marketing channel. Since you can make a consistent income with minimal work, you can spend more time scaling. You can create multiple websites to create an online income machine. In fact, I’ve scaled my local lead generation agency to over $50K in profit per month. You can learn the exact process I used to create my online business. So, check out how you can earn passively with local lead generation.