AF285 - Realist Expectations: What does it cost to sell on Amazon in 2023

You can start a million-dollar business for $2000

If you have researched the Amazon FBA business model you’ve heard and seen big numbers. Perhaps you’ve seen someone posting about a six-figure month or a seven-figure year and you’d like to try it for yourself.

Whether those numbers people are posting are real or exaggerated one thing is certain, it takes money to make money. 

The question is HOW MUCH? 

In this week's episode of The Amazon Files, I will speak the truth about what it really takes to start and RUN an Amazon business successfully. From start-up to growth every stage required more investment and I will give you the rundown of what you can expect. 

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When you do your hobby as your business, it should be fun. You should enjoy reselling or making bundles or being creative. Business is not only about making money, it is going to be hard. There are going to be things that you do not know how to do and that you do not figure out. There are going to be times you want to pull your hair out and throw your laptop out the damn window. I am just being honest here. I feel like that at least once a week in my business. But because I love what I do and because it is still fun for me to create product bundles and interact with people and run an Amazon business, I still do it. 

You have to pay yourself for doing your business. All hobbies and businesses require time and finance - time investment and financial investment. The difference between businesses and hobbies is that businesses make you money and hobbies cost you money. Businesses cost money, too. They make a profit consistently. They may not make a profit at first but they will eventually do as you reach your return on investment, after a couple of years. Amazon FBA can be a side hustle, but it is not a hobby. It is a business. You have to file tax documents and report your income to the IRS.

The economy has taken a downturn. Interest rates are up, inflation is up, and unemployment is up. Everything is not great. In our economy right now, things are very uncertain, unknown, and difficult. Yet people are coming on some hard times and they want to figure out how to make additional money.  

I started my Amazon business way back in 2008. I opened my Amazon account and started with a hundred dollars in my pocket. 

How do I start an Amazon business with no money? No business is free unless you are starting a consultation using only your knowledge and the internet. E-commerce business is not free. I will say you do not start a business with no money. You get a job or you keep your job and you save a little bit of money to start and keep that job until you start your business on the side as a side hustle. The thing is, you can actually borrow money to start a business. If you have a good solid business plan, complete with your financials, numbers, and projections so you can get an SBA loan. An SBA loan involves a huge process of paperwork. You need to present your business plan with good financial returns to get a loan.

If you need to know how to prepare any of these documents - prepare for a loan or prepare for a business plan, go to mommyincome.com/coaching and grab a coaching call. I can absolutely help you set yourself up for success to even get someone to invest or get a loan for your business. 

How you can start a business for about $2,000? If you do not have $2,000, that is okay. You can save up for it. Look at the cost and figure out how it will work for you. Once you do that, your store is open. All you have to do is repeat the steps. Repeat the steps and come up with the next product, and then repeat the steps again. 

Be aware not to invest too much upfront. There are some people who are swindled by companies who will set up their Amazon accounts and run the business for them. After six months, they will just hang the business out to dry, with no returns or profit.

Be cautious in the beginning, not so overly cautious that you never pulled the trigger, but cautious enough to not make costly mistakes. That is what I am here for, to teach you not to make those costly mistakes so that you have realistic expectations of what you can expect financially and how much time and effort it is going to take you to do this. 

A budget is a budget, but you get what you pay for as well. When someone tells you exactly what you are doing, you do not have to guess. You do not have to make a lot of mistakes. You do not have to stumble, lose a lot of money and lose a lot of time. It is a shortcut for a reason. Someone already went there, done the thing, made the money, and now they are going to teach you how to do it. 20 years of e-commerce experience this year, it is my 20th anniversary selling online. I am an expert. I just want you guys to know I have tried all the business models on Amazon. My method, the wholesale bundle system, has earned me over a million dollars. 

Retail arbitrage is the lowest point of entry into Amazon. You end up building yourself a prison over time and you have to break free from that eventually.

If you wanted to start and have your store up and running within two weeks to 30 days and have it have product for sale, I would say that the minimum that you are going to spend is $2,000.  

Why?

The most expensive part of this is the wholesale bundle system to learn my system, to learn the strategies that I put in place. This is the School of Wholesale Bundling. Over 50 videos in there, step-by-step training, very comprehensive even for people who do not speak English as their first language. Education is part of every new business, new job, new career, new school, and new anything. You need to learn what you are doing. I have literally just updated absolutely everything in the wholesale bundle system.

I have a special discount code for podcast listeners only. 

What else are you going to need? A thousand dollars for your wholesale bundle system training. $500 to start with inventory. Why am I not telling you to spend $5,000? We are going to start really small, build small, and then build big. You start small, you get the hang of what you are doing and then you scale. That is what you do in business. Start small, make some mistakes, get familiar with the process, and get familiar with what is bringing profit and what is not. And then you go big. 

Next, you are going to spend about $150 on custom packaging right out of the gate. You can get poly bags or bubble sticker bags with your logo printed on them with no problems. Really inexpensively for less than a couple hundred bucks and you can have that at your door to start. Just go to mommyincome.com/sticker mule. It is necessary to execute wholesale bundling correctly and to have custom packaging.

Merchant Words is my favorite. It is simple, very easy, and very comprehensive to use. There is not really a learning curve when it comes to Merchant Words. You type a word in and you know how many people are searching for those keywords on Amazon on a monthly basis.

And then of course your $40 fee, your Amazon fee. Do not open your Amazon account until you are ready to start uploading listings because it is going to cost you 40 bucks a month to open your store. Even if you sell not one single thing that month, it still costs you $40 to keep your store open. Same thing on Shopify, and the same thing on any other place.

And then my final is very optional, but in my opinion, very necessary to set you apart from the rest of the Amazon world.  Getting a trademark in at least one class. And that only costs $250. It is optional right now, but I doubt it is going to be optional forever on Amazon.  

Eventually, I feel like they are going to force you to be brand registered, which requires a US trademark. My wholesale bundling system covers all of these step-by-step and in detail how to create a brand for Amazon.

This is more than a job. It is a business that you can own, an asset that you can sell or hire out or pass out and still earn money from.

A thousand dollars for the training, $500 for inventory, $150 for some custom packaging, and a keyword research tool. Merchant Words is my favorite, the monthly fee on Amazon is 40 bucks. And your optional, but very recommended. A trademark in one class cost $250 to file on your own. You can do that and that is your $2,000.  

We can talk about expanding your inventory. I am making an assumption that you already have a computer, the internet, and a printer because you are definitely going to need those things.

If you still have no idea of what you are doing and you still need to learn what you are doing, email us at [email protected].

So even starting small with retail arbitrage, you are going to need some supplies. A hundred dollars for your FBA toolkit, which we have at mommyincome.com/fbastarterkit. That is all the tools you need to start and do a shipment from your house.  

Now a certain cost, like the education cost, you pay one time. So you will never have to invest in that again. That investment is going to pay you over and over and over by saving you from mistakes. Your operating cost which includes bookkeeping and accounting and tech upgrades are part of the business that you are paying to scale. If you do your bookkeeping and accounting, it does not cost money, but it cost time. Getting liability or computer insurance for your phone or computer to avoid issues when your phone or computer dies costs money. 

You have to understand that it is a business investment and business investments have calculated risks that generally bring an ROI (Return on Investment).

So those are the realistic expectations for what it costs to start a wholesale bundle, Amazon business.  

QUOTE:

“I've done over 20 years of e-commerce experience, my personal wholesale bundle system, business model on Amazon, it's earning me over a million dollars a year in revenue on Amazon, just on Amazon, not multiple platforms, only Amazon. ” - Kristin Ostrander

RESOURCES:

• Subscribe Opt-in - JOIN MY LIST
• Courses Products Page - LEARN FROM ME
• WSB BLOG 2023 - Why Wholesale Bundles?
• WSB 3.0 Sales Page - Wholesale Bundle System [New for 2023]
• Resources - Best Tools for Sellers! 

Share your AHA moments with me on our Facebook group exclusive for my students  - the Amazon Files (use the code word TODAY) and tag me so I can celebrate with you! 

Have questions? Email me directly at [email protected] with all your questions, concerns, or doubts. I would love to answer them all for you.

Keep on bundling…

-KO