Selling on Amazon has the most convenient cost threshold. You need to invest some amount of money to kick start your business and make your first sale. However, selling on Amazon does not cost a ton. Small sellers can invest a little and will still have access to the same customer base. In contrast, large businesses can choose a different subscription plan and sell using many more features. It depends on the product you want to sell and how big you want to start on the Amazon marketplace.
Why is Amazon the perfect place to invest as a seller?
Amazon is by far the largest platform for people to shop from. 9 out of 10 customers visit Amazon to compare prices or purchase items. The edge Amazon provides to your business is the ability to reach customers worldwide. You have the chance to increase your sales by selling globally. Presently, Amazon has a marketplace in nearly every country.
So, how much does selling on Amazon cost? Let’s discuss the charges in detail.
Seller’s Permit to start selling on Amazon
It is commonly known as a tax exemption certificate. It permits you to buy from wholesalers and be free from paying sales tax when you purchase anything related to your business. The fees might differ from one state to another, but you can get your Permit from the country you belong to. The cost of this seller’s Permit or business license is above $50. It is issued to you by the local government that makes sure you are up to the mark. They also ensure if you are fulfilling their requirements, such as collecting taxes for them and zoning.
Amazon cost is divided into three parts:
- Seller plan that you choose
- Fulfillment type
The Initial step is to open a seller’s account on Amazon. Amazon offers two kinds of business plans for its sellers; Individual plan and professional plan. New sellers can opt for the individual seller plan that costs $0.99 per sale. However, you have to pay $39.99 for the professional selling plan. Amazon also asks for a referral fee when you sell your items. This fee relies on the category of things that you sell. Amazon requires 8%-15% of the retail price and applies to $0.30 minimum.
Another cost applies if you opt for Amazon FBA (Fulfillment by Amazon) to ship your orders. This fee depends on the weight of your shipment. The lowest cost is $1.97 for .7 oz. However, if you are willing to fulfill your orders, you shouldn’t be worried about paying for Amazon FBA.
Inventory is where you can invest; how you want to. Decide what to sell and then connect with wholesalers and suppliers to get your items. Do some research and beware of all the scams. Most sellers source items from stores like Walmart or Dollar Tree as well. Your inventory can cost you from $10 upwards, depending on what you decide to sell.
Once you start selling on Amazon, you overlook the cost you spend daily on your business. Even though it’s little, but it still counts. You can divide your running costs into two sections.
The gas you spend on your transport can be added to the procurement expenses. Shipping expenses may include the money you spend on packing material, postage, etc.
Learn more by reading our blog on shipping!
Last but not least, Amazon costs you your time!
Amazon is going to cost you your time. As beginners, you need to be patient and invest as much time as you can to grow your business. Even if you are a small seller; putting your time into your business will help you succeed. You will be sitting in front of your computer, doing hours of research on what’s on how’s related to Amazon. A lot of time will be invested in communicating with wholesalers, marketplaces, and procurement, etc. Listing your items and then monitoring your sales is going to require a lot of time too. The main factor comes when you have to reprice your listings according to your competitors. It costs you a lot of your time and mentally drains you.
However, there are a lot of tools to help you out during this journey. You can search for tools that offer inventory management, bookkeeping, monitoring feedbacks. For repricing, automated repricers are in the market to help you maintain your listings and boost your sales. Just like us! We offer instant repricing for your listings and respond each time your competitors make any changes to their prices. You may want to reprice with us in the future. Check us out!
Costs you need to avoid
Do not waste your money on any courses that charge you a lot and claim to teach you Amazon tactics or sell on Amazon. The price is super high, and you can quickly learn about Amazon from the Amazon seller university or blogs that all the experienced sellers or businesses upload. Sellers can also join groups on Facebook, where seasoned sellers share valuable information regarding Amazon.
To summarize, we have mentioned all the start-up costs to start selling on Amazon. We hope this blog helped you figure out how much you want to invest in your Amazon business and if you want to! After all, it all comes down to what you choose to sell on how you take it from there.