So Jeff Bezos is the richest man in the world for a reason. It's because Amazon
takes a lot of money if you're selling a product through Amazon FBA. In this video,
I'm going to be going over some of the costs very specifically of selling
products on Amazon FBA and what you can expect to be paying. So I'll detail
everything. The 4 major costs in this video. So check it out. Let's go. So Amazon
FBA, if you're not familiar fulfillment by Amazon. Amazon FBA is when you as a
seller ship products to Amazon and have Amazon sell them for you. Now there are a
lot of costs involved in selling through Amazon. There's over 6 million people
that are selling products through Amazon's marketplace and there's a lot
of people making a lot of money. But before you believe all the hype and the
gurus saying that it's easy and all you need is a few thousand dollars to get
started. I'm going to detail the real costs of getting started with an Amazon FBA
based business. So you can have more realistic expectations of what to expect.
So the first thing that you need to do when you sign up for Amazon FBA is it's
$39.99 per month, okay? To get started and you can find this on Amazon's
website here. If we go over here, you'll see kind of in small print it says
$39.99 per month and then it says plus additional selling fees. So I'll be going
over those additional selling fees in just a second here and this is all from
Amazon's actual website that I'm taking all of
these numbers from. Now the second cost you should be aware of is the actual
shipping costs. The picking and packing order costs and that runs anywhere from
$2 to $5 here as you can see. Let's just take this for example.
For an average sized item, you'll be spending $2.48 cents to ship
your product with Amazon. So that's an additional $2.48 per
unit to use Amazon's fulfillment services in selling your product. So this
is another cost that you just kind of incur. The third cost you need to be
aware of is when you're shipping through Amazon FBA, there's a storage cost. So
when you start an Amazon business, you're going to buy product well usually from like
China or someplace like that and you're going to ship it from China all the way to
Amazon's warehouse. Now you pay the shipping costs from China to Amazon's
warehouse in Tennessee or wherever that is. But you're also going to pay a storage
fee by the square foot. So every square foot that you use in Amazon's warehouse,
they're going to charge you and if we see that right here we see 69 cents per
square foot. January through September. And around Christmas season, you're going to
be paying more like $2.49 per square foot. But let's use $0.69
per square foot as an example. So you're going to pay $0.69 per
square foot, okay? Now if you're starting a business with any significant volume,
you're going to need a lot of square feet in Amazon's warehouse to ship the
product and while you're building your store, while you're trying to market the
products that you've put on Amazon, it's going to take time. What's likely going to
happen is your products are going to be sitting around in Amazon's warehouse for
a little while while you're waiting for those products to sell. So in all the
while you will be paying money. For every square foot that you were using in
Amazon's warehouse. So keep that in mind. Now the fourth cost you need to be aware
of is a pretty big one. And that's actually what fees does Amazon take for
selling your product. And typically that's 6 to 20%. You know I
just found this through Google. So the fee range is typically 6 to 20%
but the average is 15%. So we can safely factor that
Amazon makes 15% of product, okay? Just for selling your product on
their platforms. So Amazon's making a lot of money. Again, they're
taking very little risk. They're charging a pretty small fee just to sell on
Amazon. You're going to pay a per unit cost for every product that they actually
have to pick and pack and then you're also paying for their their warehousing
space and you're paying Amazon 15% off the top. So you have to
factor all of these costs in before starting an Amazon business. Now the
upsides of Amazon are that you know Amazon basically does all the marketing
for you. You know you put your product on Amazon, they handle the fulfillment, they
handle a lot of things for you. But other things you need to be aware of that are
costs that are not in Amazon FBA is just to sell on Amazon. You're going to need a
number of things. You're going to need to have customer service, you're likely
going to need to have a website, you're going to need to have some sort of
support line or mail box or peel box or something to receive customer feedback
and inquiries from. All of this costs you money. Now the gurus won't tell you this
information. The gurus will say, "You know a man, just spend a few thousand bucks
and you can be selling on Amazon and it'll be going in no time." But the
reality is, that it costs a lot of money to get started on Amazon. Now if you want
to start an Amazon FBA business, I would suggest that you have anywhere from
$25 to $50,000 to really launch your store. And keep in
mind that you're going to have to test a number of different products before you
actually find one that sells well. Now the other issue with Amazon FBA is that
you have to come out of pocket a lot of money. It's considered a negative cash
flow business. And what that means you have to physically buy the products
before you ever sell them. Now what that means is that you might spend $20,000
on buying products before you even see a dime of that back,
okay? So you spend $20,000 to hopefully make 30,000. Now in
that case, you have made a profit. But again, you're coming out of pocket. A lot
of money. The one person who makes money no matter what
is Amazon. Keep those numbers in mind when you are starting an Amazon based
business. Again, you're coming out of pocket a lot of money. It's a longer-term
business. You're going to have to deal with review fraud, you're going to have to deal
with getting marketing and getting reviews for yourself in the beginning.
And you're going to have to go up against competition with over six million other
people who are doing the same thing and selling products on Amazon. So and
possibly more experienced than you. So keep that in mind when you're selling on
Amazon. If you don't have some sort of advantage, it's going to be very hard for
you to get ahead on this platform. So I hope this video was helpful and kind of
explaining what the real costs of Amazon FBA are. I'm an internet marketer. I've
been running an internet business since 2012. I've been making millions of
dollars. I've worked in numbers of different fields but place where I've
made most of my money is affiliate marketing. If you do want to learn more
about making money online and even starting an affiliate marketing based
business, which any products it doesn't require any customer support or
fulfillment or any of that jazz. Now when you subscribe to my YouTube channel,
you'll get a free course. You'll get a free affiliate marketing course right
here. It's 10 videos. If you want to learn about affiliate marketing or just
subscribe and say hey and you'll get other videos about different ways to
make money online. I have some free courses from some of my friends here who
are also successful multi-million dollar internet marketers and they can show you
a various ways of making money online. So subscribe to my channel like and if you
have any comments on if this was helpful in any way or if there's any updates or
questions you have, feel free to leave a comment for me below in this video and
I'd love to hear your feedback. Talk to you soon.