How Much Capital Do I Need to Start Selling Private Label on Amazon? - 2024

How much money do I need to launch my own Private Label product on Amazon?

It's safe to say that you can start your Private Label business on Amazon for an average of $4000. This is the minimum amount needed to launch your first product. However, if you want to succeed, you have to be willing to spend a bit more. In this article, I'm going to give you a quick explanation on how to launch your Private Label product with just $4000 to $10,000 in startup capital, so you're less likely to get surprises on your entrepreneurial journey.

Let's face it, the Private Label Selling model on Amazon has the potential to generate hundreds of thousands of dollars in revenue for you even in the first year. But with increasing competition, it's getting harder to launch your first product successfully.

“Approximately 60% of new Amazon sellers quit their jobs because their startup investment starts to exceed their budget.”

Why is this kind of mistake so common among sellers? It's simple. Often entrepreneurs start a Private Label business on Amazon without knowing all the costs involved. You should know all the costs that will be incurred throughout the entire process, starting from the beginning. You need to get your launch right, especially since it can take at least 3 months from product selection to your first sale on Amazon.

Now, let's focus on that. There are 12 different types of costs that you need to budget for when launching a Private Label product: (Let's examine these costs).

Maliyet Tipi

Minimum Bütçe

Maksimum Bütçe

Zorunlu Maliyetler - Min. = $2295 Max.= $4105

Ürün Maliyeti	1500$	2500$
Nakliye Maliyeti	750$	1500$
Amazon Aylık Hesap Ücreti (Profesyonel)	40$	40$
Barkod Satın Alımı	5$	65$

Temel Maliyetler - Min. =$350 Max. = $1800

Numune Ürün	50$	150$
Ürün Araştırma Süreci	30$	150$
Fotoğraf Çekimi	250$	1000$
Liste Optimizasyon Servisi/Aracı	20$	500$

Opsiyonel Maliyetler - Min = $260 Max = $750

Logo	30$	100$
Ambalaj	80$	250$
Denetleme	150$	400$

Lansman Maliyetleri

1200$

4000$

Toplam Gereken Bütçe - Min. = $4105 Max. = $10655

Product Cost:

When choosing the first product, it is advisable to go for a low-priced product. There is no rule, but for low costs it makes sense to choose a product that sells for $25 or less. Ideally, the cost of the product should be between 20% and 30% of the selling price. For example, if a product sells for $10 on Amazon, the amount you should pay the manufacturer for that product should be 20% of $15, or $3.

Most sellers on Amazon source their products from China, through Alibaba, because of the advantage of low-cost manufacturing.

Recommendation: Negotiate the price and accept the minimum order quantity (MOQ).

If the MOQ is 500 pieces, you will pay a total of $1500 (500 pieces x $3/piece). Similarly, if it is a higher cost product, for example, if the unit price is $5, then your cost for an order of 500 units will be $2500 (500 units x $5/unit).

Transportation Cost:

Shipping cost varies depending on weight, mode of transportation (air, sea) and destination (port, gate). On average, it costs between 1.5 and 3 dollars per item.

Recommendation: Arrange shipping through one-to-one contact with a freight forwarder. The manufacturer's offer may be more expensive or unreliable.

Note: With FBAPro Private Label 2.0 Training, you can learn the details of the information to be considered when arranging a shipping company for your product, recommendations for reliable shipping companies and special shipping tactics that can save you thousands of dollars.

Amazon Monthly Account Fee:

When signing up for Amazon, you have the choice of either Individual or Professional. There are many advantages to choosing the Professional option, such as the ability to run ads. Therefore, for the US Market, it makes more sense to choose the Professional account and pay $39.99 per month. For other countries, the price may vary.

Barcode Purchasing:

To set up your own branded product in the Amazon seller center, you will need a UPC barcode issued by GS1 or a UPC reseller (UPC code vendor). You can find affordable barcodes using websites like Speedy Barcodes or Nationwide Barcode.

Speedy Barcodes Price: 5 dollars/barcode

Nationwide Barcode Price: 10 dollars/barcode

Sample Product:

It is a good idea to request a sample before starting a serious investment. This sample is shipped by air for fast delivery and can range in cost from 30 to 100 dollars.

Recommendation: Get the first sample when you first start testing the product and get a second sample after all customization, logo embroidery and brand labeling has been completed by the manufacturer.

Product Research Tool:

If you want to find a potential product that could make you thousands of dollars, you may need a tool for product research. Such tools can offer product ideas with high sales potential and little competition, or they can provide a competitive benchmark for a product you prefer. Either way, without such a tool, it can initially be a bit difficult to distinguish good products from bad ones.

Two commonly used tools are SellerSprite and Viral Launch.

SellerSprite: Web App - $79 per month

Viral Launch: Web App - $99 per month

Recommendation: Join the FBAPro Private Label 2.0 Training program and leverage the power of the community to use Viral Lunch for free and SellerSprite for $17/month.

Additional Note: While software plays a key role in product research, you don't have to use software. To learn more about non-software product research techniques

FBAPro Private Label 2.0

Photography

Unless you are an exceptionally good photographer, it is recommended that you seek professional assistance. Amazon sellers sometimes try to save money on professional quality photos, which can slow down sales. Have your product photos taken professionally to boost sales and attract customers. Fiverr is a good place to find freelance photographers and they can charge from $25 to $80 per photo. Alternatively, you can find more affordable freelancer offers on “bionluk.com”.

If you want our professional team to manage all your product photography processes, you can contact us by clicking the button below for our cooperation.

Contact

List Optimization Service / Tool :

This is yet another area where a professional can work wonders. If the listing is fully optimized and a qualified list writer has written your product description, your product will rank on the first page and then you can watch the sales graph on the rise.

There are tools like Merchant Words and Keyword Inspector that can help with keyword research, but the keywords that these tools provide need to be strategically selected and placed. Also, the product description writing is still up to you.

Merchant Words $30 per month

Keyword Inspector: $20 per month

A professional listing optimization service will cost around $500 (excluding photography), which can be a bit steep to start with. If you're a first-timer, you'll want to outsource as much work as possible to professionals.

Of course, there are ways to cut these costs.

You can join the FBAPro Private Label 2.0 Training program and

You can use the AMZ E-Commerce Product Analysis Tool for free.

Product Packaging :

Like a logo, this is an optional cost. The label determines how the packaging or box of your product will look. You can leave this to the manufacturer and most of the time you won't have a problem. However, the manufacturer may also be selling the same packaging to other sellers. You can find one on a platform like Upwork or go to 99 Designs. The benefit of 99 Designs is that you submit the requirements for your label and a group of graphic designers will send you samples. You usually pay for the design you choose for your product. Please note that this is a costly endeavor and on average costs between 80 and 250 dollars. Again, you can minimize these costs by using local freelancer sites or doing small design jobs yourself.

Inspection :

For the first order, either inspect your shipment yourself or have it inspected through an inspection company. Producing and importing products from a foreign country can be a complex process. Your relationship with the manufacturer develops over time. It takes at least one order for the parties to understand issues such as proper packaging, product defect rates, material quality, and the need for proper packaging to prevent damage.

It may be cost-effective to inspect the products yourself, but it will be time-consuming. There will also be additional shipping costs as they will need to send the products to you for inspection first and then ship them to Amazon. There are companies like V-Trust or Asian Inspection that have a global presence and can charge between $150 and $400 for shipment inspections. It also lists third-party inspectors that can be paid through Alibaba Trade Assurance.

Again, you can also go more risk-free with the right supplier sourcing techniques you will learn in the FBAPro Private Label 2.0 Training.

Amazon PPC Ads :

Amazon's ads work on a pay-per-click basis. Each seller runs ad campaigns on keywords that customers are searching for. This is completely up to the seller's preference. However, successful sellers see ads as mandatory at launch so that their products can compete with successful brands. At first, your profit margins will be greatly reduced, but this is more of a long-term strategy because once your product is ranked among the top sellers, you will make organic sales and there will be no need for advertising. A daily budget is set for PPC ads and not all of it will always be used. For this reason, you should take care to create campaigns for at least 1 week or 10 days so that your product can gain rankings and your ads can run more efficiently.

Recommendation: Ad campaigns for keywords should be manually selected for optimal performance. These keywords will also be included in the listing optimization services and will help your product gain rankings quickly, saving you advertising costs.

Note: Amazon PPC advertising costs are not included in the required start-up capital as they can be deducted from your Amazon balance after you start selling.

Final thoughts

You are now ready for your product launch. These are all the costs that will be incurred during this process. Depending on your budget, you should determine which costs you want to keep to a minimum and which ones you want to spend more on.

A useful strategy that many sellers use is to identify other costs before determining the cost of the product download. This helps you avoid struggling in other areas of the launch. It is better to cover all these costs for a successful launch. But your focus should be on the unavoidable and essential costs mentioned above. Use the resources and tools available to you and optimize your process from start to finish.