How To Start An Amazon FBA Business With Little Money

 The grandest ideas have died because the visionaries and the entrepreneurs behind the ideas didn’t have enough money to actualize their dreams and to transform their ideas into actual things and businesses.

And while there are angel investors, financial institutions offering loans, and even crowdfunding, the truth is that you don’t have to go through all the trouble by relying on these options since you can start your business with very little money.

And if you remain consistent and patient, you will end up with a profitable venture. What this means is that you must be willing and ready to start.

If you are interested in starting a profitable Amazon FBA business, then you could end up creating a very enjoyable and highly profitable online adventure if you chose to start today, with the little you have. But for you to succeed on this little adventure, you must identify the best stepping stones that will propel you to the greatest heights.

Now, if you are like the rest of us, one of the biggest reasons why you’d like to start and grow a successful Amazon FBA business has to do with the high income earning potential of running your business on the Amazon platform, especially the fact that if you start things off on the right foot, you could earn a good income while sleeping or doing other things.

But what does it take? Which are some of the small steps you need to take to ensure that you are running a successful Amazon FBA business? How do you generate passive income when you have so little to start out with?

Well, let’s start from the beginning

What is Amazon FBA?

Start An Amazon FBA Business

To understand how you can start a successful Amazon FBA business with little money, the first thing you need to do is to understand the intricacies of this business model.

The only way for you to identify the right stones, you should be stepping on is if you understand everything about the business model and when/ where you will need to take certain specific actions.

Amazon FBA or just FBA refers to fulfillment by Amazon. The FBA business model is a unique business model that allows you to leverage the powerful and large Amazon network, as well as its customer base.

This business model involves working with Amazon, but allowing this e-commerce giant to run and handle the biggest aspects of your e-commerce business where Amazon warehouses your products, fulfills customer orders, and also handles the customer services, returns, and shipping matters/ issues for you.

So, while working with Amazon, this eCommerce site will be responsible for navigating the order fulfillment logistics while ensuring that all orders are fulfilled and shipped to customers in a timely manner.

On your end, your primary roles include the setup of an Amazon store, identification of the best products to sell from your store, creation or sourcing of the products, packaging, and the shipment of the packaged and labeled products to Amazon’s warehouses.

This business setup is not perfect, though, since you are cut out of the operational equation, and also, you are unable to keep track of the inventory directly.

However, even with these challenges, this business model offers so much more, which is why most people are sticking to it. Also, the benefits outweigh the disadvantages.

 

Benefits of FBA

  • This business model gives you the opportunity to focus on the higher-level and important tasks such as targeted marketing, conversion rate optimization, as well as the search for and the development of new markets
  • The business model comes with several perks, including a system to handle credit cards, free shipping, quick shipping, and customer service.
  • There are many opportunities for growth
  • The operational expenses are low, and even the warehousing service is considerably cheaper than the private e-business facilities.

So, how can you start your Amazon FBA business with the little money you have?

Getting Started

Before we get all technical, here are the basic things you need to get started in the FBA business:

  • Money
  • A creative mind
  • Internet connection
  • Two hours each day to work on the hustle
  • A legally registered company
  • A bank account
  • Graphics designer
  • Contact for overseas shipments
  • A positive, winning mindset

The FBA Business Process

Now that you know everything you need to get started, here are some of the most important things that you must do to start and run a successful FBA business.

Product Research and Product Selection

product reaserch amazon

Product research and selection is the most important step for your FBA business since you must be able to identify all the products that have a high earning potential.

At the end of the day, you are getting into the FBA business to make money, and this means that the products you choose must show good profit margins.

So, your search for the best products should be comprehensive and intentional. With hundreds of potentially great ideas for your niche, you will be left with a few feasible options after you carefully narrow down your search.

As you can imagine, running product research manually would be impossible, or if it works, it may take more time than necessary, the time you don’t have.

For these reasons, we recommend that you look for and invest in the best tools for product research.

For starters, the tool you choose for product research must provide you with an accurate estimate of your sales data, as well as all the other important metrics like high-demand, low-competition products. Pexda, Viral Launch, Jungle Scout, and Helium 10 are some of the best product search tools, and investing in any of them will ensure that you settle on the products with the highest earning potential.

The right product research tool offers long term benefits, which include the opportunity of staying ahead of the curve, more growth opportunities, and you will also gain insights into some of the products you may want to consider in the future.

We pinned Viral Launch against Jungle Scout to find the best product finder.

Guide for the best products to sell on Amazon

  • Cross-reference the selling prices for the products against the cost price to determine the actual profit margins of the products you are interested in.
  • Make use of the Amazon FBA calculator. This calculator allows you to input specific data about the products you are planning to sell at a specific price point in relation to the price you will sell it at. You also get to add the cost price of that product the use the data collected to determine the suitability of the product. For the Cost of the Product, you may want to head over to Alibaba for the average selling price of the product.
  • Opt for the smaller, lightweight, and easy-to-ship products
  • Always steer clear of the bigger brands since you don’t want to compete with the big boys when your budget cannot allow you to.

Remember that your search for the best products should be guided by the target, product, and niche-specific keywords.

1. Get Samples

samples on amazon

Once you’ve narrowed down your search for your FBA business products, you want to try the products out first before you start selling them. Of course, you have to identify the best suppliers for the products before you request samples.

Remember that you can gauge the suppliers by looking at the number of orders they’ve fulfilled previously, their ratings, and how other people feel about their product fulfillment services.

How the supplier deals with processing your sample order will tell you a lot more about the supplier(s) you’d be working for, the shipping process, fees, and all other logistics matters.

Note that if you aren’t in a position to handle the products’ branding from your home or garage, then you should ask the supplier for a branded sample.

This approach would save you a lot of time and money. After you get the sample, look at all its aspects, test it, and inspect it for quality. This means that you cannot rush the process.

Also, make sure that the colors are right, and that both the branding and the products’ quality are great.

2. MOQ

A word of advice is that before you place an order request for the sample, you must check the MOQ (minimum order quantity) acceptable by the supplier.

For example, you won’t want to work with a business whose minimum order quantity is 3000 units when you are starting out on a small budget.

But if the supplier is willing, then you may want to negotiate for a low MOQ.

If negotiation fails with the Alibaba suppliers, you may want to test out other options, including AliExpress. AliExpress is a lot like Alibaba, but the suppliers often deal with lower quantities hence the ideal fit for startups.

You should, however, be careful not to pay more for the lower quantity orders – find your balance between the right cost per unit and a low MOQ since you have to work around your budget. Alternatively, you could search for suppliers on Google.

3. Place Your Order

Now that you are satisfied with the feel, look, and the quality of the samples, you can get serious and place your orders. Pay your suppliers using PayPal or other reliable payment options like bank transfers.

Total FBA Business Setup Costs (Time and financial costs)

  • Product research tools
  • Unit prices inclusive of VAT, but exclusive of the cost of shipping
  • Negotiated quantities
  • Supplier
  • Estimated production and shipping times
  • Labeling costs
  • Company setup costs
  • Design works and product photography costs (if you can do photography and design works, then you will save a bit more)
  • Monthly subscription fees on Amazon
  • Amazon PPC campaigns

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