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December 8, 2021

How To Start Amazon FBA Business With Little Money

Starting an Amazon FBA business can be quite overwhelming, especially if you are starting with little money. 

There's a lot to learn, and it's hard to figure out where to start. That's why I decided to put together this guide for anyone looking into starting their own Amazon FBA business on a budget.

This step-by-step guide will walk through each part of the process for setting up an Amazon FBA business on any budget. Learn how to choose a niche, find a popular product within that niche, source a manufacturer or supplier, ship products to Amazon fulfillment centers, and more. 

With loads of tips and tricks on how to advertise your Amazon business inexpensively, this article is worth reading for all budding entrepreneurs out there - so let's dive right in!

How Amazon FBA works

Fulfillment by Amazon means that you ship your product to Amazon's warehouse, and they ship it on your behalf. They handle all customer service issues, refunds, returns, etc. 

This means that there are several steps to take to get started with an Amazon FBA business.

First, you need to choose a niche, research products within your niche that are popular and easy to sell on Amazon. 

Next, you need to find a supplier or manufacturer of the product. Then, once your product is ready for sale on Amazon, you will ship it to an Amazon warehouse. Finally, you will need to advertise your product and get it in front of potential customers on Amazon.

Let's go through each step in detail, so you know what needs to be done.

Pick A Niche

One of the most important things you'll have to do when getting started with an Amazon FBA business is to find a niche. The niche should have popular products that are easy to sell.

If you choose a niche where there isn't much competition, it will be easier for your product to rank high on the search results page and get more sales organically. More sales mean a low BSR (best seller rank), making it easier for Amazon to put your product listing in more relevant searches.

If you choose a niche with too much competition, it will be harder for your products to rank high and get customers organically. You may end up making fewer sales than expected.

You want to choose a niche that has enough competition, but not too much. Before you settle on a niche, ask yourself these questions:

  • Who will be my audience, and what problem-solving products are they looking for?
  • Is this something I want to continue doing in the coming years?
  • What is the demand for this niche?
  • Is it easy to source a supplier or manufacturer?
  • How much competition exists in my chosen niche, and what are their prices compared to mine?

By asking yourself these questions, you will understand how difficult it will be to sell your product. If other sellers are getting a lot of negative reviews, read the comments to see what buyers are looking for. Doing this will help you understand what features your product should have.

Find A Product Within Your Niche

The next step of the process is product research within your niche. Let's assume you have picked the fitness niche. Since you want to start selling on a small budget, focus on lightweight and small products. Fitness is a competitive niche with many active products on Amazon. It would help if you narrowed it down further by researching what's trending among similar niches before settling with one particular item.

While choosing between similar items might seem difficult, it is vital to make a final decision. If you are not sure, stick with the most popular product. You can always switch products in the future once you have gained better insights on selling online.

So how can you find popular items within your niche? There are several different ways:

  • Using the Amazon Best Sellers list
  • Searching on Google
  • Searching on Pinterest
  • Using Amazon's search bar

Let me explain each method of finding products. Then I will show you how to narrow it down further and select the best item based on several factors: price, earnings, reviews, and more.

Using The Amazon Best Sellers List

The Best Sellers list is a great place to start because it shows you the top 100 best-selling items on Amazon. You can see how many reviews each product has, what price they are sold, and even which colors or sizes are most popular among customers.

To view the best sellers list, search “Amazon best sellers” on Google or click on “Best Sellers” on the Amazon homepage as highlighted in the image below.

Pictured Above: Amazon Best Sellers

To narrow your search click on the department you wish to sell on and look at the top products. For example, if you wish to start selling smartwatches, click on electronics - wearable technology - smartwatches. Look at the features, colors, and sizes common in the top products. This will give you a good idea of what to sell and how to list your products. 

Pictured Above: Amazon Best Sellers Smartwatches

Using Amazon's Search Bar

Using Amazon's search bar is another way to find products that you can start selling in your niche. Type something like "fitness watches" or "running shoes for women." You will see the most popular items within that particular niche based on customer reviews and ratings.

Fitness watches return over 8,000 items. From here, you can narrow it down even further by looking at the average customer ratings. Click on four stars rating to reduce the results.

You can reduce the results further using price, product condition, and features.

Pictured above: Amazon product page

Once you have found an interesting product, click "other sellers" under the price to find similar items. This will help you understand how much competition this niche has and if you should take further action.

Pictured above: Amazon product page

You can also scroll down the page to see other product suggestions on "More to consider from our brands" and "Customers who viewed this item also viewed" that may be relevant for your niche as well.

Pictured above: Amazon product page

Before settling on products to sell, make sure you first review the list of FBA product restrictions. Doing this will save you time and money in the long run.

Searching On Google

Google is another good resource for finding products within your niche. If you search something like "best selling (your niche) products", Google will return top results within your selected niche. You will see ads for some of the items in your niche.

You will also see sites that recommend products that you can sell. I wouldn't use this as the primary source for finding products, but it's something you can use to see what other people are recommending. You need to be careful because some of these sites will recommend products that may no longer be making sales.

Google will also suggest items you can sell when you type "best selling (your niche)."

From my search, you can see that Google suggests fitness books, bands, trackers, and watches. This means that the products are popular and might be profitable once you decide to start selling using Amazon FBA.

Searching On Pinterest

Pinterest is another excellent place to find ideas for what kind of products you should be looking at when starting an Amazon FBA business. You can search for something like "fitness products," and Pinterest will give you hundreds of results with popular items within your niche.

Pictured Above: Pinterest Search Result for “fitness products”

By now, you should have found a product idea, and you also know there is demand within this market segment. The next step would be sourcing for products.

Sourcing For Products

Now that you know what kind of products to look at, it's time to source for them. You now need to find suppliers selling these products at wholesale prices so you can sell on Amazon FBA and make money. There are two ways to go about finding suppliers.

The first option is contacting manufacturers directly through their website and asking them if they will sell you the products. This can be a time-consuming process, but you can find high-quality manufacturers that can meet your needs and offer competitive prices if done correctly.

Option two is finding a supplier on Alibaba or another wholesale site where many manufacturers list their products. This is usually much quicker than contacting manufacturers because you will have fewer suppliers to choose from, but it comes with more risk since they may not be able to meet your needs or provide competitive prices.

For example, you've decided to sell fitness watches. Go to Alibaba and type "fitness watches" in the search bar. You will see a list of suppliers who sell different versions of these products, so make sure you look at all of them before deciding on your supplier.

When looking at a supplier's profile, you will see their ratings from other buyers. You can also view reviews to have an idea of the quality and service they provide before deciding on who to work with.

It is essential to read reviews as it gives you more insight into how the company operates, if there have been any issues in past transactions, and what you can expect during the process. Narrow down your search based on supplier type, product type, minimum order, location, ratings, and price.

After finding a supplier, it's time to negotiate on price and how much they will charge for shipping. Shipping costs are significant because they determine how much money you are going to make. 

Contact suppliers using Alibaba or email (if possible). Ask what products they can provide, minimum order quantities (MOQ), price per unit, and delivery time. This is also the right time to negotiate the best possible deal.

The negotiation process can be tricky if you don't know what makes a good offer or how much money should go into each part of your costs. The goal is to minimize shipping costs and product price while still getting a good deal.

Here are tips to help you with your negotiation process:

  • Look at the supplier's website or Alibaba to see what prices they list their products for. They may even have a minimum advertised price that you should not go under when making your offer.
  • Don't be afraid to ask for discounts on different parts of costs, including shipping fees and payment terms. If you can pay upfront, you may be able to get a discount for this as well.
  • Avoid mentioning that you're a beginner in the eCommerce world. Some suppliers might see your lack of experience as a risk and may try to get more money from you.
  • Don't quote the supplier's prices verbatim. Don’t say, "I can see your price of $xx.xx is inclusive of shipping."This is usually used against them when negotiating for better deals. You can always say, "I'm sorry, I was not able to understand your price." Then ask if it includes shipping fees, MOQ, etc.
  • Don't give everything away at once. For example, don't tell them you will take $50k worth of products if they offer a 30% discount on all products and free shipping. Instead, break it down into smaller parts. Try saying: "I'll take $20k worth of your products if you can offer a 30% discount on the total, free shipping, and I pay upfront."
  • Be patient during the negotiation process. You may send multiple emails or make many calls before suppliers reply to you.

Once both parties agree on selling prices, place an order with your suppliers. This should be a sample order to make sure they meet your requirements.

Make sure you've settled on profitable products that are within your budget. If they cost more than you can afford, return to the drawing board and go back through your product research process.

How To Calculate Amazon FBA Business Profit

To calculate how much profit you'll make, use the Amazon FBA calculator. There are two ways to get the information needed for this. The first is using the search box, and the second is using your numbers and entering them manually.

The first option works when you want to sell an exact product to what is listed on Amazon. From our example of fitness watches, let's use this product as a reference.

Pictured above: Product sample for calculating FBA profit

We will use the product ASIN (Amazon Standard Identification Number), which you'll find under "product information" by scrolling down the product page.

Pictured above: Product ASIN

Copy the ASIN and paste it in the search bar, then click on search.

Pictured above: Amazon FBA Calculator

The next step is to input these details:

  • Revenue - we will use $25 as an example.
  • Ship to Amazon - shipping costs for shipping product from supplier to Amazon. This might involve a two-step process -  - from China to the US and from your "store" (which is where the product lands) to Amazon's warehouse. We will use $3.55 as an example.
  • Cost of product - we will use $8.65 as an example.

Pictured above: Amazon FBA Calculator

Click on calculate after filling in the information. You will see the image below.

Pictured above: Amazon FBA calculator

  • Amazon referral fee is $3.75 - this fee is around 15% of sales price
  • The fulfillment fee is $3.58
  • The monthly storage cost is $0.03 per unit
  • The profit expected is $5.44, which is a margin of 21.76%.

The other option is using product dimensions, weight, and category. Use this option if you can’t find an exact product listing on Amazon.

For example, let’s use the following figures:

  • Dimension: 4X3X1 inches
  • Unit weight: 0.15 pounds
  • Product category: Electronic accessories

Click estimate and then fill in the item price as $25, ship to Amazon $3.55 and cost of the product as $8, and then hit calculate. You can have a look at the below image for an example.

Using the FBA calculator is the best way to ensure that you will spend money on profitable products.

Testing Products

After receiving your samples, test them to make sure they are of good quality. You cannot just send your products straight to Amazon without first checking them because you will lose money if they aren't up to standard. This is a crucial step that many new sellers fail to do.

The quality of products can make or break your Amazon business. For example, if you are selling watches, and they stop ticking after two days or the strap breaks within a few weeks, this will reflect poorly on your Amazon business. All of these factors need to be tested before putting them up for sale on the Amazon marketplace.

After you've tested the products and are happy with them, it's time to start selling on Amazon.

Creating An Amazon Seller Account

To sell your products on Amazon, you will need to create a seller account. A professional seller account costs $39 per month. Visit Amazon to set up your seller account.

Pictured above: Amazon sellers sign up page

Make sure you have the following:

  • Phone number
  • Tax information
  • Government ID
  • Business email
  • Chargeable credit card
  • Bank account

With an Amazon seller account created, you can then list your products.

List Products On Amazon

To list products on Amazon, you need to log in to your individual seller account. Your product listings should show you're using FBA. Change "fulfilled by" from merchant to Amazon. There are two listing options:

  • Adding products one by one: this option is ideal if you list a few products at a time. You can create a new listing or match an existing product listing.
  • Bulk listing: this option is great for listing large quantities of items all in one go. Amazon provides inventory file templates to save you time.

When listing products, remember you're building your product detail page. Below is an image showing the product detail page.

Pictured above: Amazon product detail page

  • Title - the title should have a maximum of 200 characters and the first letter of each word should be capitalized.
  • Images - your product images should be 1,000 x 1,000 or 500 x 500 pixels.
  • Variations - this means different sizes, colors, scents, etc.
  • Bullet points - these should be short and descriptive.
  • Buy Box - the buy box shows the featured product, and customers can click on "Buy Now" or "Add to Cart."
  • Other offers - this section shows offers from other Amazon sellers selling the same product.
  • Description - describes a product in detail.

The key to building a good product page is images and keywords. Let's discuss these two in detail.

Images

Product images need to be high quality. Amazon recommends that sellers provide at least six product images and one video. You can either take your product photos or hire someone else to do it for you.

If you are photographing products yourself, remember these two things:

  • Lighting - the lighting should be bright and even across all images, so they look professional
  • Backgrounds - try using white backgrounds as this makes the pictures look clean and professional

You can also learn more from Amazon self-service imaging products videos.

Keywords

Keywords are part of Amazon SEO (search engine optimization) and are very important to get right. There are two types of keywords:

  • Long-tail keywords are the longer and more specific keywords such as "men's leather wallet" or "red women's handbag."
  • Short-tail keywords are shorter, more generic words like "wallet" or "handbag."

It is best to use a mixture of both short and long-tail keywords when listing products on Amazon. You can also read our blog about how you can optimize your product listings to rank on the first page of Amazon.

There are three things you need to remember about keywords:

  • Be specific with the keywords used to describe the product. This means saying  "women's leather wallets" rather than just using a short-tail keyword like "leather wallet."
  • Don't make your listing look spammy by repeating keywords.
  • When creating your product listing page, it's essential to include your most relevant keywords in the title, bullet points, and description.

Now that you know how to list products on the Amazon platform, let's talk about shipping your products to Amazon fulfillment centers.

Ship Your Products To Amazon Warehouses

Before shipping your products, you need to prepare them first. Preparing products means properly labeling and using appropriate packing materials for packaging. After preparing your shipment, you can use Amazon shipping services or your own.

After your products have arrived in Amazon’s fulfillment center, they will be scanned and recorded. This now means your products are ready to sell on Amazon.

When you start selling, it is important to plow back any profits to grow your Amazon business. Here is how you can do this:

  • Reinvest funds in buying more inventory
  • Expand your product range - sell additional products or invest in new ones
  • Invest back into Amazon ads
  • Branding (see more on this below)
  • Invest in Amazon product research tools like Jungle Scout and Helium 10

Tips To Increasing Amazon FBA Sales

Branding

Branding is an integral part of any business, and Amazon FBA is no exception. To brand your Amazon business, you need a name and a design that will help you stand out.

A brand name that is memorable, easy to spell, and sticks in people's minds will give you an edge. You can set up a website under your brand name where visitors can buy products via Amazon FBA directly from you.

Your brand design should be simple, clean, and professional. You can use the design by printing it on products or packages. This helps create trust with customers who are not familiar with your Amazon business. Either way, it will help build your brand.

Amazon PPC

Amazon pay-per-click advertising is an effective way to generate targeted traffic. It's important that when you are running ads on Amazon, they are placed under the right keywords so customers searching for your products can find them faster.

Set a daily budget and start with automatic ads to see how they perform. Once you better understand how well the ads are working, you can start to run manual campaigns.

Use Influencers

Using influencers to generate interest in your products is an excellent way of getting more people interested in what you’re selling on Amazon. Influencer marketing works by having influential figures promote your brand for you.

You can use platforms such as YouTube, Facebook, TikTok, & Instagram. When starting, test micro-influencers first to see how successful the promotion is and then use bigger influencers if you find that people are interested in buying your products. Be aware that some influencers will ask for free products and still charge a fee.

You can also use Amazon influencers or sites like Shoutcart to connect with relevant influencers for your niche.

Pictured above: Shoutcart

Get More Reviews

Getting more reviews is a simple way to increase your Amazon FBA sales. Getting reviews takes time and effort, so you must build a good strategy around it from the beginning. Here are a few tips to help you build reviews for your Amazon FBA business:

  • Include a note in your packages thanking them for their purchase and requesting them to leave a review.
  • Email customers after they make a purchase asking them to leave a review.
  • Offer incentives for leaving reviews such as free products or discounts.
  • Use the “request a review” button on Amazon.

Image Credit: Jungle Scout

  • Be patient and don't get discouraged if you do not see results right away; it takes time, but the more effort you put into getting Amazon FBA reviews, the better your seller rank will be. As a result, you’ll get more exposure and more sales.

Use Other Platforms To Get Customers

There are a lot of different places where people buy products online nowadays. It is important to take advantage of these platforms and promote your own brand as best as possible. One of the most effective ways is through social media. There's no better way to connect with people than on their favorite platform. Here are some examples:

  • Use Facebook groups to promote your products by providing value first
  • Post on forums to get feedback and possible Amazon FBA reviews
  • Use Instagram, Pinterest, Twitter, etc.

How‌ ‌To‌ ‌Start‌ ‌Amazon‌ ‌FBA‌ ‌Business‌ ‌With‌ ‌Little‌ ‌Money‌ FAQ

Can I start an Amazon FBA business with no money?

No, a minimum investment in this business is needed. You need to ship products to an Amazon fulfillment center even if you want to start selling what you already have. This will cost money, so you need to have a certain amount of capital beforehand.

What is the best product for Amazon FBA?

There isn't one specific type or style that works better than another. It all depends on your preference and what customers are looking for in today's market. It's important to stay up-to-date with the latest trends and hot items.

How much money do you need to start an Amazon FBA business?

There is no set amount of how much you need to invest, but it's best not to spend all your savings on starting up an Amazon FBA business. You will most likely have some initial costs such as buying products and shipping; as such, you’ll need to have some money available to get the ball rolling.

Bottom Line

As we've seen above, you can start an Amazon FBA business with little money. Let's recap on the tips that help you improve when selling on Amazon:

  • Branding
  • Amazon PPC
  • Influencers
  • Getting more reviews
  • Utilizing other platforms

With the above information, you should be ready to start an Amazon FBA business. If needed, take time to go through this post again as well as the other links that we’ve recommended in it. 

When you have all the right knowledge available, you’ll be well on your way to setting up a successful FBA business and be up and running within a short time.

Ready To Start Your Journey?
Now it is your turn to get started building your very own highly profitable online business. To help you get started, this week we are having a free training on the fastest and easiest way we've scaled from $10/day, then systematically grew to $100/day, then $1,000/day & more…Click the button below to join the training now.

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Mike Vestil

About the Author

Mike Vestil is an author, investor, and speaker known for building a business from zero to $1.5 million in 12 months while traveling the world.

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