How much does it cost to start Amazon Business?

You might be thinking that it may require lakhs of rupees to start selling on Amazon, but trust me it is not like that. You can start your Amazon business for a minimum amount. All you need is to understand the process and how to take calculated risks with money.

You might have heard that selling products on Amazon is easy and is a good opportunity to earn money. Yes, you are right. It is as simple as that provided with some basic understanding and knowledge.

Before that, let us know about Amazon and the business opportunities it provides.

Amazon is one of the top e-commerce platforms in India where you can sell products online. Now there are more than 120,000 Business Accounts in Amazon in India, selling millions of goods. By the time you read this article, the number of sellers on Amazon will be even more.

The interesting fact is that once you start selling your products on Amazon, you can sell them to any part of India. Just imagine, with a population of 1.3 Billion people, what a big opportunity you have in your hand.

You can sell a variety of products on Amazon like Baby Products, Beauty, Books, Cameras and Video Games-Consoles, Mobile Accessories, Electronics Accessories, PC Accessories, Home, Jewellery, Kitchen, Luggage, Mobile Phones, Movies, Music, Personal Care Appliances, Personal Computers, Tablets, Toys, Video games, watches, etc

Why is selling on Amazon better than having an E-Commerce store?

Starting Amazon Business to sell your product online is a better option than setting up your e-commerce website. Because if you are creating your e-commerce website, you will have to take care of many things like building and developing your e-commerce store, you maintaining an online marketplace, logistics handling, payment processing, marketing, and many more.

On the other hand, if you decide to sell on amazon, all these things will be taken care of by Amazon on your behalf.

Basic requirements to kick start your Amazon Business.

By now, you would have understood the importance of Amazon in making your business profitable. Besides understanding the importance of selling on Amazon there are several things that you should be aware of, like the money needed to set up the Amazon business, initial cost, Amazon FBA

Don’t worry, we will understand each step required to kickstart your Amazon business. Right from your initial investment to the delivery of your product to customers. 

Now, let us see the basic requirements to start your business

Laptop/Desktop

First of all, you need a laptop or desktop to manage your Amazon Central account. You may be thinking that you can do it with your smartphone. But it’s not possible because there are many features on the Amazon Central account which you can’t manage on a smartphone.

GST

If you are planning to sell your product across India, then you must register for GST. You can generate your GST application form with the help of your mobile number. After generating the GST form, you have to fill the form and generate your digital signature certificate and then you will have to verify the form and submit it.

It will take 3 to 5 days to download your GST registration Certificate from the GST portal, and it will cost you 1500 rupees for the registration.

Hold on, if you are planning to sell 0 % GST products on Amazon, then you don’t need to register for the GST.

Most of the product categories don’t require any license. If you are planning to sell food items, it is necessary to produce an FSSAI license which will cost you nearly 1500 rupees per year.

Product Inventory

It is the part where you need to act smart and optimize your budget for starting your Amazon business. Managing product inventory has everything to do right from your product stock, packaging, and delivering it to your customers.

You can start your product stock with just one product. There are no criteria for having a minimum quantity of products (i.e, 50 or 100 products). You can start with just one.

So what should you do? How much quantity of a product should you keep in your inventory?

To completely understand how your investment in Amazon Business works, let us look at an example.

Suppose you have a product that costs you 500 rupees per piece, then you should keep up your inventory for 20 to 30 products at a time. So if you have 20 products at a procurement price of 500 rupees, then your total inventory cost will be 10,000 rupees. 

Now, if a customer buys your product on Amazon,  it has to be delivered to the customers, for which you have multiple delivery options available 

1. Amazon FBA – Amazon FBA stands for Fulfilment By Amazon. In this delivery system, you will just have to send all your 20 products packed in one box with your label in it, to the Amazon warehouse. Then it is Amazon’s responsibility to deliver it to customers.
2. Easy Ship – In this method, you will have to handle the packaging and labeling of the product and, Amazon logistics will help you to deliver the product to the customers.
3. Self Ship – In this method, everything is your responsibility, from packaging and labeling to delivering the product with the help of your chosen delivery partner.

You may be thinking that in Self Ship and Easy Ship, packaging and taping of the product boxes must have Amazon written over them. No, it’s not mandatory.

Marketing

When you create your Amazon seller central account, you will get 2000 free credits on Amazon. With this 2000 free credit, you can surely make your sales if you launch the product properly. If you are willing to spend more on ads, then Amazon will debit that amount from your sales of the product.

You don’t need to spend extra on Ads, as they will be debited from your sales automatically.

Remember that:

By now you have come to know that you can just start your amazon business even in 15000 rupees. You must keep an extra 15000 rupees because suppose you have to run ads to boost sales of the products and expect the 10000 rupees products to sell at 15000 rupees, this will go into ads. Suppose the next order for the product comes in the meantime, then you won’t have products in your inventory.

To maintain the rotation of the product in the inventory, you will need that extra 15000.

By now, you came to know very well how about starting your Amazon Business with 30 thousand to 50 thousand rupees, to keep the sales of your products going and maintain the rotation of your inventory in the meantime.