To start Amazon FBA on tight budget:
- Choose the Amazon business model that fits with your budget.
- Set Up with the best Amazon seller account for your pocket.
- Find a profitable product to sell on Amazon.
- Source your Amazon products and make deals with suppliers.
- Set up your Amazon product listing.
- Test your Amazon product’s popularity and boost traffic.
Starting Amazon FBA on a tight budget is possible, but it requires strategic planning, since typical startup costs range from $3,500 to $13,000. Limited funds mean you'll need to focus on low-cost products, use retail or online arbitrage, and carefully manage your budget. While this approach can help you launch your business, expect slower growth and a need for meticulous resource management.
This article will guide you on how to start Amazon FBA on a tight budget with just 6 powerful tips. Also, we'll provide insights from successful Amazon FBA sellers. We'll also recommend an Amazon FBA course for you to try if you're on a tight budget. Finally, we will present an alternative option to Amazon FBA that you can start with limited funds.
1. Choose the Amazon Business Model that Fits with Your Budget
Choosing the Amazon business model that fits your budget helps you grow sustainably. It also enables you to manage risk well. It can be retail arbitrage, online arbitrage, wholesale, private label, or dropshipping.
There are many Amazon FBA business models, and some may allow you to at least start on a smaller budget.
Tamara Tee emphasizes the critical need to manage budgets in Amazon FBA. This is especially true for beginners with limited money. She highlights that starting on a budget is possible. You can do it by focusing on cheap product ideas. She uses tools like Helium 10 for quick product research and sources cheap products on Alibaba. By sticking to a strict budget, new sellers can cut risks. They can also boost profits and grow their business slowly without overspending.
2. Getting Set Up with the Best Amazon Seller Account for Your Pocket
To set up the best Amazon seller account for your budget, find and make the cheapest account that fits your finances. You select an account type (Individual or Professional). It offers the best balance of features and costs. It ensures you can manage your selling activities efficiently without overspending. A Professional account costs $39.99/month for unlimited listings. Normally, this is the best choice at the start of your Amazon business.
But, if you have a tight budget, an individual Amazon FBA seller account might work best. After all, you shouldn’t have a large inventory of listings if you can’t pay for it. You can save some cash by listing fewer than 40 products on the Amazon platform. And you’ll save on both inventory costs and Amazon FBA fees.
3. Find a Profitable Product to Sell on Amazon
Finding a profitable product to sell on Amazon is researching market demand, competition, and profits. It ensures the product aligns with consumer needs and offers a competitive edge. It maximizes sales, enables growth, and secures a strong market position.
To find profitable product to sell on Amazon:
For a more in-depth breakdown, look at our full Amazon FBA product research tutorial.
Warner Fields explains how to find over 20 products daily to sell on Amazon using online arbitrage and tools like SellerAmp and Keepa. He advises to get discounted items from retail websites, like Walgreens and Walmart. Then, analyze their profitability and sales speed. He does this by examining other sellers' storefronts. He finds winning products and stresses the need to keep it simple. Fields also emphasizes avoiding bulk purchases from China. He says to start with profitable items from well-known brands and retailers.
4. Source Your Amazon Products and Make Deals with Suppliers
Sourcing your products means finding reliable suppliers. You must also negotiate to get on good terms. This is how you secure high-quality products at low prices. It keeps profits up, margins high, and the supply chain smooth for your Amazon business. With retail and online arbitrage, search the clearance sections of your retailer, or their website. Selling clearance items at maximum price will make your profit margins much heftier.
If you’re selling on Amazon using wholesale or private label, order inventory with a low minimum order quantity, or MOQ. Some suppliers will allow you to order just a few hundred items. If not, you might cut a deal. However, this can be difficult because suppliers won’t make a lot of money from fulfilling such a small order. Plus, they may not take you seriously or consider you a good investment for the future.
To combat this, get a sourcing agent from UpWork for $10-$20/hr. They’ll complete about 5-10 hours of work, making your investment significantly cheaper than purchasing an unnecessarily large quantity of product. If you’re sourcing from China, an agent that lives there will understand the language and customs. Also, a sourcing agent will have other clients that they can bring to the manufacturer, making a more lucrative deal.
Flips4Miles emphasizes starting with online arbitrage. Source name-brand products from well-known websites like Kohl's, Walmart, and Dick's Sporting Goods. He suggests using tools like SellerAmp and Keepa to analyze product profitability and sales velocity. He also advises to leverage discounted gift cards and coupons to increase profit margins. For beginners, Miles recommends storefront stalking. In it, you examine other sellers' storefronts to find profitable products they are selling. This approach helps in identifying and sourcing winning products efficiently.
5. Set Up Your Amazon Product Listing
Set up your Amazon product listing by creating a detailed, accurate, and optimized product page. It includes high-quality images, compelling descriptions, and relevant keywords. It attracts buyers, boosts search visibility, and hikes sales.
If you are selling someone else’s product, you won’t have to worry about Amazon product listing optimization. But, if you created a private label product, you will need to make a listing that sells. (Click that link to see an in-depth guide to this strategy)
Here are a few cost-effective strategies to optimize your listing:
Do You Need a Business License to Sell on Amazon?
No, but some suppliers will only work with wholesalers that have a business license and/or resale certificate. To keep costs low, search for suppliers that do not have these requirements. Aliexpress, Tradegala, and others do not require a seller’s permit. Some states require this regardless, so research your location.
Thomas Tran provides a pro tip regarding Amazon product listing. According to him, you can list your products on eBay, Walmart, and other third-party platforms. Then, you can use Amazon's Multichannel Fulfillment (MCF) to fulfill orders from these sites. This maximizes your reach and sales potential without incurring additional inventory management costs.
6. Test Your Amazon Product’s Popularity and Boost Traffic
Test your product’s popularity by running targeted ads and monitoring customer reviews, while boosting traffic through optimized listings and external marketing efforts. This is important for understanding market demand. It also refines your marketing strateg, and driving higher sales.
Do not start your product launch with an auto Amazon PPC campaign. This can drive your ad spend into the thousands while pushing Amazon visitors from keywords that make no sense with your product.
Instead, start with your own keyword research. Choose keywords based on search volume and buyer intent (much like when you optimized your listing). Then, pick 5 high-relevance keywords to focus on, and at least 60 long tail keywords. Finally, 2-4 weeks into your product launch generate an auto campaign. That way, Amazon’s auto campaign will take in the sales data you have already collected.
On a budget, you can’t throw thousands of dollars into PPC. But, that doesn’t mean you can’t use this feature at all. Set a budget of $5 to test your ad campaigns. You won’t see much growth, but you will see which ads work the best.
Other cheap ways to boost traffic to your Amazon product listing include:
Marie Serrao outlines effective strategies for driving traffic on Amazon listings. She emphasizes keyword optimization, leveraging micro-influencers, and creating high-quality, emotionally engaging images. She also recommends boosting sales velocity through strategic ad spending or price reductions. Also, use Amazon Sponsored Ads to ensure products appear prominently in search results. These tactics enhance visibility, attract more potential customers, and ultimately increase conversion rates.
The Course: How to Start an Amazon Store on a Tight Budget
“How to Start an Amazon Store on a Tight Budget” is a very popular Udemy course. This bestseller has over 95,678 students. Total, Theo McArthur teaches 156,073 students.
Theo McArthur's Presentation
The course is a complete guide to every step of setting up an Amazon wholesale or private label business. From finding Amazon account support, to understanding the BSR, to figuring out new requirements for product approval, it’s in this complete Amazon selling blueprint.
Price
$109.99 or lower, if you have a Udemy coupon
Course Started
2015, most recently updated in March 2022. She adds new content often.
Coach
Theo McArthur started selling on Amazon in 2013, but began her online career in 1995. She has marketed e-learning products, still works as an affiliate, and scaled her Amazon business onto an independent eCommerce store. She created this course to help newbies avoid common Amazon FBA mistakes.
Group
Yes, there is an active Q&A board within the course.
Training
Aimed at complete beginners or those who need to revamp their store from the ground up. If you are a veteran seller, you will still find value in this online course. But there will definitely be some surface level parts you can skip.
Lives
No.
Some other things we liked:
This course covers over 11 hours of content in bite-sized pieces. You can easily return to content you wish to review.
Course content includes multiple handouts.
Some things we didn't like:
At times, there seemed to be a little too much fluff.
There’s no real video of the presenter.
She could include the use of more tools that automate some processes.
Does Starting Amazon FBA on Tight Budget Directly Affect Your Success as an Amazon Seller?
Yes, starting Amazon FBA on tight budget directly affects your success as an Amazon seller. The more you invest in your new Amazon FBA business, the greater your chance of success. But also, the more you invest also heightens your risk.
There is a free Individual Amazon Seller Central account. You’ll pay $0.99/ listing with a limit of 40. Then, you could sell things you don’t need, paying only shipping costs (which is Amazon FBM, not FBA.) Eventually, you’ll run out of profitable items to sell. You won’t be able to scale much higher, even if you reinvest what you made.
So, while you could start with very little, you won’t make millions off of a strategy like this.
How Much Is the Amazon FBA Startup Costs?
The Amazon FBA startup costs range from $3,500 to $13,000. There are ways to start a store even lower, but spending less than $3500 affects your chance of Amazon FBA success.
JungleScout says existing sellers spend @ $3836 to start. Here’s their breakdown:
Stats courtesy of: JungleScout
Note: You could use a credit card. Many Amazon automation agencies suggest this while waiting for Amazon’s 2 week payout. But this can build debt fast and destroy your credit score, especially if Amazon suspends your account.
Conclusion: Why Local Lead Gen Is Better to Start Than Amazon FBA on a Tight Budget?
Local lead gen is better to start than Amazon FBA on a tight budget because you can start for about $500. It is more budget-friendly than the Amazon FBA, which cost between $3,500 and $13,000. The lower initial investment covers essentials like domain, hosting, call tracking software, and third-party tools. This makes local lead gen accessible to those with limited funds.
In terms of competition, Amazon FBA is highly competitive, with 1.9 million active sellers and many giant brands. Standing out is challenging. Local lead gen, however, involves competing with only 10-20 local companies. This makes it easier to gain visibility and attract clients. Also, local lead gen is more passive. It requires less ongoing effort than Amazon FBA. FBA involves constant inventory management and customer service.
If you’re an aspiring online business owner with a tight budget and want to earn $500 - $3,000 passive income monthly, then a lead gen biz is definitely for you.
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