Selling on Amazon is a great side hustle or business to start. Many people see screenshots of sales from Amazon sellers and want to explore if selling on Amazon is legit. You will likely hear that you can start to sell on Amazon for free. This blog post will explore if a brand new seller can actually start with $0 and sell on Amazon for free.
Can selling on Amazon be really “free”?
When most people say something is free, they are meaning that it costs nothing to do an activity. What people overlook is that any activity you can start for free will require a lot of time to get it off the ground. If you started with some amount of money, it will definitely make the process easier. As an Amazon seller myself who started with very little money (<$100), it is possible to grow your Amazon business with little to no money.
What the gurus you’ve likely seen forget to tell you is that actual business side of Amazon. Now that you are in reality, you need to actually know what and how to sell a product on Amazon. The process is simple and goes like this:
- find a good product to sell
- list the product on Amazon
- ship it after it is sold
If you can do all three of those things for free, then you can sell on Amazon. By examining the three main factors above, you will quickly see it’s nearly impossible to have no money and for that to work. You can find a product for free if you already own it. You can also list a product for free, but you will have to pay shipping to get the product to the customer. This is why it’s important to understand the costs of selling on Amazon to get an accurate estimate of whether you can sell for free on Amazon.
Let’s explore the three factors above in terms of cost. This will highlight exactly how much money you can expect to make.
Cost of product:
First, there’s the cost of the product you are selling. There are tons of ways to find free products to sell on Amazon. A popular example is selling used books that can be in your house. If you find some textbooks and other used books in your house, you can make over $100 in sales in the following month. You can keep using that $100 to find more products and grow your business. From the product perspective, you can definitely find free products to sell on Amazon.
Cost of listing:
Many ecommerce platforms have listing fees. When selling on Amazon, there’s no such fee. There are other fees like selling fees. If you select the free plan to sell on Amazon, you pay $0.99 per item sold. This will be taken from your sale before Amazon pays you. At this point, the cost of selling on Amazon is free. You can get a product and list it for free.
Cost of shipping:
Now that you’ve got a product and it’s listed, it’s time to make your first sale. When you are shipping, you have two options on Amazon. You can ship directly to the customer (fulfilled by merchant) or you can ship to Amazon (fulfill by Amazon). When you’re doing fulfilled by merchant, you have to take care of the shipping and customer service. When you’re doing fulfilled by Amazon, Amazon will do the customer service.
Regardless of which method you use, you must pay for shipping. At this point, Amazon has not paid you any money for the sale of a product. Amazon actually pays sellers every two weeks. This means that you will have to pay for shipping out of pocket and wait until Amazon pays you to make a profit. Although shipping costs are usually less than $10, you are not exactly selling for free on Amazon.
Many people are willing to pay upfront if they know they will be paid later. In my opinion, this is just a cost of doing business. You’ll get your money back plus the sale of the item in two weeks, so it’s a win win. You just need to pay the shipping for the time being.
Can you start with $0 and grow an Amazon business?
For someone who’s looking to sell a few products laying around the house, it can be inconvenient to wait two weeks and pay for shipping. If you’re looking to build a business, this should be no problem to you. This is because literally every business requires some upfront investment just to get going. If your biggest problem is paying for shipping and you have guaranteed money coming in two weeks, I think you’ll be alright.
You can start with $0 and grow your Amazon business. What will determine your actual success is how much time and money you put into your business. If you expect to start with $0 and never reinvest back into your business, your Amazon business will remain a side hobby forever. The more you learn and invest into your business, the higher your likelihood of success.
If you start off today with $0, you should not be at $0 in a few months. Keep reinvesting back into your business and you will start hitting good numbers. You don’t need crazy numbers to succeed on Amazon. You can get a 35-40% margin and have an amazing business. To give you some context, a 40% profit on a $1 investment will give you $1.40. If you can keep turning $1 into $1.40, your business is bound to succeed.
Below is an example of what would happen if you keep getting 40% margins on products and you start with $100.
After just 10 reinvestments into your business at 40% margins, you could turn $100 into nearly $3,000. The more money you start off with at those margins, the bigger the possibility of your returns.
In my opinion, I wouldn’t recommend people starting off with $0. I know this isn’t the nicest answer, but you have to be realistic. Taking $100 from your next paycheck or skipping out on eating out for one week can help you start your business. There are many people who are struggling to make ends meet, but if you have a plan, you can definitely start with little money and grow on Amazon.
As I’m writing this blog, I still haven’t made $100 on Amazon in sales. Do I have a $100 to invest in my business? Yes. Is it the best use of my time to just look for products right now? No. This is because I’m being proactive and planning how to best use both my time and money. If I can save up $1,000 from my 9-5 over 2 months, I can really hit the ground running. The profits from investing $1,000 will be a much better use of my time instead of looking for products when I can be making money from my day job.
Whatever you decide to do, it’s important to evaluate what works best for you. Some people may already have money laying around, while others have to save up some. The most important thing is that you learn quickly and keep reinvesting in your business. Continuously reinvesting and learning about your Amazon business is the only way you will succeed on Amazon. Starting from $0 today can be you starting with $20,000 next year. Just get started and get better each day. To learn how to apply to sell on Amazon, check out this blog here.