Many aspiring sellers wonder about the initial investment required to launch an Amazon store. This article breaks down the key costs to help you estimate startup expenses and avoid unnecessary expenditures.
1. Business Registration: The First Legal Step
To sell on Amazon, you must register as a business entity—individual or sole proprietorship registrations are insufficient. Amazon increasingly favors corporate sellers, and individual registrations may face limitations in the future. Recommended business types include trading companies, e-commerce firms, or technology companies with sales categories in their business scope.
While business registration is free through local administration websites, monthly tax filings are required post-registration. Those unfamiliar with tax procedures can hire accounting agencies that often provide registration assistance.
Why register as a company?
- Risk reduction: Amazon prefers corporate sellers for higher credibility.
- Access to support: Only corporate accounts can register through Amazon's dedicated account managers.
2. Monthly Store Fees: Vary by Marketplace
Amazon charges monthly subscription fees: $39.9 for North America, £25 for Europe, and ¥4,900 for Asia-Pacific. Contrary to common misconceptions, sellers don't pay separate fees for each marketplace. Amazon's unified account system consolidates charges across regions, distributing the $39.9 fee proportionally based on sales distribution.
Recommendations for new sellers:
- Focus on one marketplace initially: Concentrate resources for better results.
- Expand gradually: Consider additional marketplaces after 3-6 months of stable operations.
3. Product Costs: Selection Determines Investment
Inventory represents the largest startup expense. Initial FBA shipments require sufficient stock, with costs varying by product strategy—from budget items ($15-20) to premium products ($50+).
Product selection advice:
- Beginners: Lower-priced items minimize trial costs.
- Established sellers/manufacturers: Higher-value or specialized products may be preferable.
Price comparison:
- Premium products: Less competition, higher margins, but require greater capital and expertise.
- Budget products: More competition, lower margins, but reduced risk for newcomers.
4. Shipping Logistics: Bridging Domestic and International Markets
Initial shipping costs to Amazon warehouses typically constitute one-third of product investments. For example, a $10,000 inventory shipment might incur $2,000-$3,000 in logistics fees.
Shipping methods:
- Early stage: Air freight ensures faster listing and testing.
- Later stage: Sea freight reduces costs for established products.
5. FBA Fees: Amazon's Storage and Delivery Services
Fulfillment by Amazon (FBA) includes storage and delivery fees, typically $2.5-$3 per item. Benefits include:
- Efficient delivery improving customer satisfaction
- Handled customer service reducing seller workload
6. Advertising Costs: Fuel for Product Promotion
Amazon ads are essential for product visibility and sales growth. Budgets should align with product type and marketing strategy.
Estimated Startup Costs Summary
| Expense Category | Estimated Cost | Notes |
|---|---|---|
| Business Registration | $0 (excluding accounting services) | Monthly tax filings required |
| Monthly Store Fee | $39.9 (unified account) | Distributed across marketplaces |
| Product Inventory | $1,000-$10,000+ | Varies by product type and quantity |
| Shipping Logistics | ~30% of inventory value | Higher for air freight, lower for sea freight |
| FBA Fees | $2.5-$3 per unit | Includes storage and delivery |
| Advertising | Variable | Depends on promotion strategy |