How Much It Costs To Start An Online Store And Should I Dropship Or Carry Inventory

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The exact cost to start an online store can vary greatly depending on the business model you choose. This post will enumerate the costs to start an ecommerce business for the 4 most common business models.

  • Dropshipping From Your Website
  • Selling Wholesale Products On Your Website
  • Selling Private Label Products On Your Website
  • Selling Private Label Products On Amazon FBA

First off, the cost to start an ecommerce business depends on your monetary aspirations. For example…

If your goal is to start the next Ebay or Etsy, you’ll need a large amount of upfront cash to jump start your business.

If you want to start the next Amazon.com, you’ll need to invest a significant amount of money to hire engineers and web developers.

But if all you want to do is make enough money to quit your job and start a lifestyle business making 6 or 7 figures online, then you don’t need much money at all!

In fact, depending on what your income goals are, you can start an online store for less than $3 a month.

The other day, a reader who signed up for my free 6 day mini course asked me the following question.

Your free course is pretty extensive and exhausting to read through. Can you give me some kind of idea in one simple sentence how much this would cost me to start up?

It seems there’s a lot of money to put into this before you even start earning anything! Frankly, I don’t have any money to start this up, that’s why I need to begin earning the money first!

Unfortunately, not everything can be summed up neatly into a single sentence! There are many variables involved which I’ll discuss below.

Your Startup Costs Depend On Your Ecommerce Business Model

When it comes to starting an online store, your startup expenses will depend on several factors.

But the most important factor that determines your overall cost is your online business model. Below is a description of the 4 ecommerce business models covered in this post.

  • Dropshipping From Your Online Store – Dropshipping is a business model where you take orders from your website but your supplier stores and ships your merchandise to the end customer.
  • Selling Wholesale Products From Your Online Store – Selling wholesale is a business model where you purchase inventory up front for brands that you do not own and sell them on your online store.
  • Selling Private Label Products From Your Online Store – Selling private label is a business model where you manufacture your own products and sell them under your own brand on your website.
  • Selling Private Label Products On Amazon – Selling private label on Amazon FBA is a business model where you sell your own branded products on the Amazon marketplace.

In addition to startup costs, each ecommerce business model will also be evaluated based on the following criteria.

  • Revenue Velocity – How long after launch do you expect to make significant money?
  • Barriers To Entry – How hard is it to copy your business?
  • Portability – Do you want to be able to run your business from anywhere?
  • Scalability – Do you want the business to scale easily once it grows?

Business Model #1: Start An Online Store Dropshipping

Dropshipping is by far the cheapest and easiest way to start selling goods online which is why most new entrepreneurs gravitate towards this business model.

Without going into too much depth, dropshipping is attractive when you are willing to sacrifice some amount of profit in order to avoid carrying inventory.

When a customer places an order, you then place an identical order with your supplier and the supplier ships the product to the end customer.

The amount of profit made is the selling price minus the cost of goods sold and a small dropshipping fee.

Related: Dropshipping Vs Affiliate Marketing: Which Online Business Will Make You More Money?

Cost To Start A Dropshipped Store

If you don’t have time to read this entire post and you just want to know how much money you need to start a dropshipping business, here’s the short answer.

Based on data from students in my ecommerce course (~4000 students), you should expect to pay between $3 and $500 on average to start a dropshipped online store.

Depending on your tech and design skills, there will always be outliers who spend more or less, but this is a realistic amount to pay.

On the low end of this spectrum, my kids started their own online store selling entrepreneurship tshirts online over at KidInCharge.com for only $2.99 all inclusive!

Of course I helped with the design, but my kids funded their print on demand dropshipping store for just a couple of bucks!

Here’s a breakdown of the expenses required to start a dropshipping store.

Register Your Domain: ~$10

Registering your domain will cost you around $10 using registrars like NameCheap or GoDaddy.

Your domain is the address for your website and what customers type into their browsers to find your online store.

There’s not much to say about registering your domain except that you should obey the following criteria.

  • Choose a domain that is easy to spell
  • Choose a domain that is memorable
  • Check the USPTO trademark database to make sure you aren’t infringing on someone else’s name.

Some webhosts like BlueHost will give you a free domain upon signup.

Select A Shopping Cart: $3 – $29

Your shopping cart website will cost you between $3 – $29 per month depending on which ecommerce platform you choose.

The cheapest way to start a dropship online store is to use a free open source shopping cart like WooCommerce and host it on a cheap web host like Bluehost.

Below are step by step instructions on how to install WooCommerce on Bluehost for less than $3. Bluehost will also give you a free domain upon signup.

Click Here To Signup For Bluehost For $2.99

If you are not tech savvy at all and would rather focus on sales and marketing, then I recommend going with a fully hosted shopping cart like BigCommerce or Shopify

A fully hosted shopping cart will cost more money but you won’t have to manage the server that runs your website and you’ll receive free technical support.

Bottom line, you are paying the extra money for convenience and peace of mind so you can get up and running faster.

If you are new to ecommerce, I recommend test driving all of the platforms above to see what you like the best.

Meanwhile, here are a few posts to help you make your decision.

  • BigCommerce Vs Shopify – A Comprehensive Review And Comparison
  • WooCommerce Vs Shopify – Which Platform Is Better For You

Get An SSL Certificate: FREE

Your SSL certificate should be included for free for any platform that you choose.

Back in the day, you had to pay for a cheap SSL certificate to secure your website. But almost no one today pays for their certificate.

Bluehost, Shopify and BigCommerce will give you an SSL certificate for free and the only reason to pay for SSL is if you need extended validation.

In general, only established companies and/or financial institutions require an extended validation SSL certificate.

Sign Up For Credit Card Processing: FREE

Credit card processing should not incur a monthly fee. Instead, you will be charged on a per transaction basis, typically on the order of 2.9% + $.30.

When it comes to accepting credit cards online, you will probably choose between one of the big three, Paypal, Authorize.net and Stripe.

All 3 of these payment processors have their pros and cons which are thoroughly outlined in my post on The Cheapest Credit Card Processing Option For Small Business. However, when you are first starting out, you’ll want to go with Stripe and Paypal, both of which carry no monthly fee.

Once your store starts generating more than $5000/month, you can look at other cheaper options but it shouldn’t cost you any recurring fees to accept credit cards when you first start out.

Editor’s Note: Shopify forces you to use their payment processor called Shopify Payments so you don’t need to worry about this step if are using Shopify.

(Optional) Purchase A Shopping Cart Template Or Theme: $20 – $200

Buying a template for your website is entirely optional because there are many free themes that are widely available. However, if you choose to buy a theme, it will run you between $20-$200 depending on your platform.

In general, themes for WooCommerce are cheap and plentiful and you can probably find a good theme to use at no cost. For example, the theme I used for my kids’ online store was 100% free.

Editor’s Note: If you signup for Bluehost using this link, I will send you my theme for free. Just send me an email, attach your Bluehost receipt and I’ll email the theme to you.

If you are looking for a drag and drop page builder for WooCommerce, I recommend a theme called Divi.

Designing a theme with Divi is completely graphical and will allow you to design a great looking site without any technical experience.

Meanwhile, if you are on Shopify or BigCommerce, themes will typically cost you $200.

For Shopify, I recommend the Turbo Theme

(Optional) Design Your Logo: $5 – $299

If you are not artistic, then hiring a graphic designer to design your logo will run you anywhere from $5 to $299.

If you are on a budget, you can try to design your own logo using a free drawing tool like GIMP. But because your logo is important for establishing your brand, you should invest the money and get it done right.

Here are a few places I recommend to get the job done.

  • Outlinematic – I love their personal touch and they’ll do as many revisions as you need until you are happy. Use coupon code: Steve for 10% off.
  • 99 Designs – Crowd source dozens of graphic designers against each other to create a logo that you like. Will cost roughly $299.
  • Fiverr – Get a logo designed on the cheap. Quality control can be a problem here though. You get what you pay for.

Tallying Up The Costs For Dropshipping

Here are all of the costs associated with starting a dropshipped online store.

  • Register Your Domain – $10 (Bluehost will give you a domain for free on signup)
    • NameCheap
    • GoDaddy
  • Install Your Shopping Cart (Choose One)
    • Sign Up For Shopify – $29
    • Sign Up For BigCommerce – $29
    • Sign Up For WooCommerce – $3
  • Sign Up For An SSL Certificate – FREE
  • Sign Up For A Credit Card Processor – $0/month, 2-3% fee per transaction
  • (Optional) Get A Logo Designed – $0 – $299
    • Outlinematic – $99
    • Fiverr – $5+
    • 99 Designs – $299
  • (Optional) Purchase A Template For Your Website – $20-$200
    • Get Divi For WordPress
    • Get Turbo For Shopify

If you tally everything up above, the total comes out to between $3 and $438. $3 doesn’t sound like a whole lot of money does it?

With a free open source cart like WooCommerce, your monthly costs for a bare bones site will be on the order of $3.

Open source is what my wife and I used to start our online store over at Bumblebee Linens.

In fact, we are still on the same open source platform as when we started in 2007 except our web hosting bill is higher due to increased traffic!

However if you are tech averse and don’t want to deal with any website setup whatsoever, you can opt for a fully hosted platform like Shopify or Big Commerce.

The main advantage of a fully hosted ecommerce provider is that they’ll take care of all of the setup for you including payment processing, security etc…

While running a dropshipping store costs much less to start than the other online store business models, there are several disadvantages which I will outline below.

Note: If you want to easily find dropship vendors, consider signing up for a service like Worldwide Brands.

Dropshipping Revenue Velocity

The revenue velocity of a dropshipped online store is much lower compared to a store that purchases inventory up front. After all, not having to worry about inventory or fulfillment costs comes at a price.

When it comes to dropshipping, your wholesale price will be higher. In addition, most dropshippers also charge a small fee whenever a dropship order is processed.

All of these costs add up and the end result is that your profit margins will be much smaller (10-30%).

The other thing to consider is that with dropshipping, you are selling someone else’s product. As a result, you will be competing with many other vendors who are are selling the exact same thing.

And guess what happens when you have multiple sellers of an identical item? The price tends to spiral to the bottom.

Thanks to marketplaces like Amazon, the competition is fierce. And unless MAP(minimum advertised price) pricing is strictly enforced, you will just be another retailer trying to compete for the best deal.

Dropshipping Barriers To Entry

In addition, the barriers to entry will be lower. Because of the low upfront investment involved and the ease of putting up a website, it can be relatively easy for someone else to copy and replicate your exact same shop.

While they still have to discover who your suppliers are, locating your sources can be as easy as making a purchase from your store and looking at where the package came from.

Dropshipping Portability/Scalability

But the beauty of running a dropshipped store is that your business will be truly portable. Since you don’t have to worry about inventory, you can run your business from anywhere there’s an Internet connection.

This means that you can run your online store from a coffee shop in a foreign country or wherever you want!

Because you don’t have to worry about inventory, your business is also extremely scalable. With a computer server taking and managing orders, you will only have to hire additional help as your customer support volume rises.

Business Model #2: Start An Online Store Selling Wholesale Products

Starting an online store the traditional way with inventory carries all of the same costs as starting a dropshipped store except that you also need to set aside money for your initial cost of goods.

Depending on what you plan on selling, your inventory can cost hundreds or thousands of dollars based on the minimum order quantity (MOQ) that your vendor requires.

In general however, when it comes to buying wholesale products within your home country, the minimum order size is typically on the order of $100-$200 depending on what you sell.

Cost To Start An Online Store With Wholesale Products

The only difference in startup costs from a dropship store versus a traditional wholesale online store is the initial cost of inventory.

As a result, you should expect to pay between $3 – $500 on average to start a traditional online store selling wholesale products in addition to the cost of your inventory.

However, just because you are buying inventory upfront does not necessarily mean that you need to physically carry inventory.

In fact, you can use a 3PL or fulfillment center to store and fulfill your goods to the end customer.

(Optional) 3PL Or Fulfillment Center: Varies

A 3rd party logistics firm or 3PL is essentially a fulfillment center.

You ship all of your inventory to a 3PL and they will store and ship your goods to the end customer. Fulfillment centers can also handle basic returns and customer support as well.

Here’s how a typical 3PL works

  • You receive an order on your online store
  • Your ecommerce platform forwards the order to your 3PL
  • Your 3PL ships out the order to your customer in your own branded box
  • Your customer receives their order without you having to touch your inventory

The cost of a 3PL varies greatly depending on the size, weight and volume of your products and your sales volume. And if you are brand new to ecommerce, it probably doesn’t make sense to hire a 3PL until you reach about 100 orders per month.

Tallying Up The Costs To Start An Online Store Selling Wholesale Products

Here are all of the costs required to start a traditional online store including inventory.

  • Register Your Domain – $10 (Bluehost will give you a domain for free on signup)
    • NameCheap
    • GoDaddy
  • Install Your Shopping Cart (Choose One)
    • Sign Up For Shopify – $29
    • Sign Up For BigCommerce – $29
    • Sign Up For WooCommerce – $3
  • Sign Up For An SSL Certificate – FREE
  • Sign Up For A Credit Card Processor – $0/month, 2-3% fee per transaction
  • (Optional) Get A Logo Designed – $0 – $299
    • Outlinematic – $99
    • Fiverr – $5+
    • 99 Designs – $299
  • (Optional) Purchase A Template For Your Website – $20-$200
    • Get Divi For WordPress
    • Get Turbo For Shopify
  • Initial Cost Of Inventory – $100+

The total comes out to between $103 and $538 as a bare minimum investment.

In terms of initial inventory, I recommend that you be as conservative as possible until you know that your product will sell.

A typical wholesale supplier in the United States requires a minimum order value of around $100 which is pretty manageable considering that you can reorder at any time and receive your products quickly.

Selling Wholesale Revenue Velocity

The main advantage of carrying inventory over dropshipping is that you will make a significant amount of money much faster. As with everything in life, more risk carries more reward which is why my wife and I decided to carry our own inventory when we first started out.

Despite having to risk more money(about $630), we were able to make over $100,000 in profit after only a year of being in business. And unlike dropshipping, the profit margins are much higher and you are in more control over your shipping costs and delivery times.

Selling Wholesale Barriers To Entry

Carrying your own inventory has other advantages as well. Because you have to secure vendors in order to source your goods and you have to purchase in bulk, the barriers to entry are much higher than dropshipping.

Since you are in control over your shipping and branding, it’s much harder to copy your online store idea.

Not only would a competitor have to copy your website but they would also have to find your vendors (much harder since you are shipping products yourself) and be willing to shell out more money upfront.

I’m not saying that it would be impossible to copy your business idea, but in general it’s much less likely due to the increased upfront risk involved.

Selling Wholesale Scalability/Portability

Of course the downside is that you have to find a place to store your goods and you have to take care of shipping your product. However there many ways to avoid storing physical inventory.

We already discussed the use of a 3PL which will store and ship your goods on your behalf for a small fee. You can also use Amazon multi channel fulfillment to ship orders as well (more on this later).

But bottom line, when it comes to managing inventory, there are going to be increased headaches compared to dropshipping and you’ll have to weigh the downsides versus the increase in profit.

There are also cash flow issues associated with paying for upfront inventory that you need to consider as well. For example, we routinely invest hundreds of thousands of dollars on inventory every year and don’t see the returns until months later.

Related: 3 Ways To Sell Products Online Without Inventory, Shipping Or Fulfillment

Business Model #3: Start An Online Store Selling Private Label Products

Selling your own private label products offers the highest profit margins and is the fastest way to make significant money with your ecommerce business.

By working with overseas factories, you can create your own branded line of products and keep the majority of the profit.

While manufacturing your own products may seem intimidating at first, it’s actually fairly straightforward once you’ve gone through the process a single time.

In terms of getting started, selling your own private label products requires the same startup capital as starting a wholesale online store except that you need to set aside more money for your cost of goods.

Because you will be working with factories overseas, your minimum order quantities will be in the hundreds or thousands of units.

However, even though you’ll be investing more money upfront, buying direct from a factory will result in up to 10X lower prices than buying wholesale within your country.

For example, buying a handkerchief wholesale in the United States might cost us $4/piece. But a factory will charge us 50 cents per piece in volume!

Editor’s Note: Read the following post if you are interested in learning more about how to import from China.

Cost To Start An Online Store Selling Private Label Products

The main difference in startup costs between a wholesale store versus a private label store is the initial inventory purchase.

Because you will be importing goods from overseas, you will need to pay to transport your goods from Asia to your home country and pay customs.

As a result, you should expect to pay between $3 – $500 on average to start your website in addition to $1000-$2000 for the cost of manufacturing and shipping your products.

In fact, the average cost of starting a private label business for the students in my ecommerce course is on the order of $1000-$3000.

Below is a breakdown of your typical product sourcing costs for private label.

Obtaining A Sample Product: ~$150

Obtaining product samples from the factory will cost you roughly $150.

Even though the cost of your product samples can vary depending on what you sell, you can assume that it’ll run you about 50 dollars per sample for a product that costs 3-5 dollars to source in volume.

The easiest place to find overseas factories is by using a service called Alibaba. And as you are evaluating which factory to work with, you should obtain a sample from at least 3 different suppliers.

Never trust the photos that you see on Alibaba or believe what the manufacturer says. The only way to tell whether your product is well made is to obtain a physical sample.

Buying Your First Bulk Order: $600 – $1500

For a product that costs $3, your first bulk order will cost you between $600 – $1500.

In the beginning, you should order as much product as necessary to validate that your product will sell. And the minimum order quantity will vary depending on the size of the factory.

But you should be able to find a supplier on Alibaba that is willing to sell you between 200-500 units to start.

In this example, we will assume that your product costs $3 per unit and that the MOQ is 500 units.

500 pieces may sound like a lot but it’s a good first order size which will allow you to set aside some units for promotion while still making a decent profit.

In general, I would not go lower than 200 units because replenishing your inventory can take several months.

(Optional) Get A Factory Inspection: $300

A factory inspection will cost you around $300.

Because you are shipping your goods from overseas, you will want to catch any product defects at the factory before it reaches your warehouse.

As a result, you should hire an inspector to inspect your goods before they are shipped.

A factory inspection in China will cost you $300 and I recommend getting an inspection for any large order you place.

If your order size is too low to warrant paying $300, then I would simply have the factory take detailed photos of your completed products and send them to you for review.

We use Qima.com (formerly AsianInspection.com) for all of our inspections.

Freight Forwarding And Transport Costs: ~30% Of Your COGS

A rough estimate of your transport costs is to add an additional 30% markup to the cost of your product.

For example, if your bulk order value is $1000, then you should assume that it will cost you $1300 total after shipping and transport expenses.

You should also check the customs duties for your goods. In most cases, your duties should be in the single digits but sometimes certain materials can incur abnormally high tariffs.

Overall, the cost of freight and customs will depend on the weight and size of your products and your customs duty rate.

To get an accurate estimate, please consult a freight forwarder for a real time quote. But in most cases, adding an additional 30% to your cost of goods is a good, back of the envelope calculation.

Tallying Up The Costs To Start An Online Store Selling Private Label Products

Here are all of the costs required to start an online store selling private label products including inventory.

  • Register Your Domain – $10 (Bluehost will give you a domain for free on signup)
    • NameCheap
    • GoDaddy
  • Install Your Shopping Cart (Choose One)
    • Sign Up For Shopify – $29
    • Sign Up For BigCommerce – $29
    • Sign Up For WooCommerce – $3
  • Sign Up For An SSL Certificate – FREE
  • Sign Up For A Credit Card Processor – $0/month, 2-3% fee per transaction
  • (Optional) Get A Logo Designed – $0 – $299
    • Outlinematic – $99
    • Fiverr – $5+
    • 99 Designs – $299
  • (Optional) Purchase A Template For Your Website – $20-$200
    • Get Divi For WordPress
    • Get Turbo For Shopify
  • Getting Product Samples – $150
  • Purchasing Inventory – $600 – $1500
  • (Optional) Getting A Factory Inspection – $300
  • Freight Forwarding – $180 – $450

The total comes out to between $933 and $2738.

Realistically, most students in my course spend around $2000 to start their private label business with a single product.

Selling Private Label Revenue Velocity

The main advantage of selling private label products is that your margins will be far greater than any other product sourcing method.

Compared to dropshipping which only carries a 10-30% margin or selling wholesale which carries a 50% margin, selling private label products can yield margins as high as 90%+!

Most of the products that we carry in our store have at least a 66% margin and certain products have a margin as high as 95%. This means that you get to keep the majority of the revenue that you generate.

Higher margins also help make Google advertising and Facebook advertising more profitable because you can spend more money to acquire a customer.

Selling Private Label Barriers To Entry

The main downside to selling private label products is the upfront cost. Because you are dealing with factories in Asia, your minimum order quantities will be much higher than acquiring your goods wholesale in your home country.

In addition, importing goods from China carries other disadvantages which include:

  • Longer lead times for manufacturing
  • High costs of shipping and freight forwarding
  • Customs duties and tariffs
  • Cultural and language barriers with your suppliers
  • Higher costs of quality control

But because the barriers to entry for selling private label products are much higher, you’ll have less competition and you can establish your own brand.

You are in full control over your entire supply chain which makes it much more difficult for another store to compete with you.

Selling Private Label Scalability/Portability

Selling private label has similar downsides to selling wholesale in that you have to deal with inventory and fulfillment. However, because your margins are significantly higher, you can sell on Amazon and use Amazon as your primary fulfillment center.

Amazon Multi Channel Fulfillment allows you to use Amazon as your own personal 3PL. When an order comes in, your shopping cart will notify Amazon and Amazon will ship your product to the end customer.

By leveraging Amazon or a 3PL, selling private label products can be as scalable as a dropshipped online store.

Business Model #4: Selling On Amazon With FBA

Selling your goods on Amazon is probably the fastest way to make money selling physical products online. Compared to starting your own online store, Amazon has an ENORMOUS built in marketplace of customers that are ready to purchase your products immediately.

In fact when I first started selling on Amazon, I just threw up a few products and made $3k in the first month doing practically zero work. Yes. The marketplace is that huge!

Now there are many different ways to sell on Amazon that are beyond the scope of this post. But bottom line, Amazon charges you a lot of money for the privilege of selling on their platform.

Cost To Start Selling On Amazon FBA

If you run the numbers, it doesn’t make sense to sell on Amazon unless you have at least a 66% margin for your products. As a result, you need to sell your own private label products to make the numbers work.

In terms of cost, the amount of money to start a private label business on Amazon is roughly the same as starting your own online store selling private label products with a few additional line items.

Here are the additional costs to sell on Amazon as a professional seller.

  • Amazon Professional Sellers Account – $39/month. This is required to list your own private label goods online
  • (Optional) GS1 Barcodes – $5-$250. You need a GS1 barcode in order to create a product listing on Amazon.
  • (Optional) Amazon Brand Registry – $275-$1000. Amazon Brand Registry requires a trademark which will cost you up to $1000 dollars.
  • (Optional) Jungle Scout – $40. Keyword research tools like Jungle Scout are helpful for analyzing which keywords to target for your Amazon listings
  • Amazon FBA Fees – The cost of Amazon FBA depends on your product. But as a rough guideline, you will pay Amazon an additional 10-15% of your revenue.

As mentioned earlier, Amazon’s selling fees are extremely high at 15%. And if you take into account FBA fees, you could be paying Amazon 25-30% of your revenues just to sell on their platform.

As a result, you need to sell high margin goods. If you sell private label goods on Amazon, be prepared to purchase at least 500 units upfront from your supplier. You can get by with less, but you’ll likely run out of inventory and stunt your growth.

On the low end, if you skimp on tools, Amazon brand registry, barcodes, factory inspections and logo design, you can start for as low as ~$1000.

On the high end, if you include all of the costs of product sourcing and tools, it will cost you roughly $4000.

Most students in my course spend between $2000-3000 to get started selling private label on Amazon.

Selling On Amazon FBA Revenue Velocity

The main advantage of selling on Amazon is that you will make a significant amount of money much faster than any other ecommerce business model.

They have a large built in audience and especially over the holidays, it seems like whatever you throw up there will sell. In fact, I’ve had several students in my class make 6 figures in less than a year on the platform. Here are a few examples.

  • Student Story: How Toni Made 100K In A Single Month Selling Jewelry On Amazon
  • Student Story: How Lauren Makes 6 Figures Selling On Amazon And Her 2 Prong Approach To Ecommerce

Selling On Amazon FBA Barriers To Entry

The main downside to selling on Amazon is that all sales are transparent to all other sellers.

For example if you use a tool like Jungle Scout, you can find out roughly how much money a certain product made in the last 30 days.

As a result, if you sell a popular product on Amazon, it’s only a matter of time until copycats come in and flood the marketplace with similar or identical items.

Amazon is a cut throat platform and you have to be constantly on your toes and monitor your listings.

In addition because you don’t own the channel, Amazon could ban you, change the rules or raise the selling fees at any time.

Here are a few posts that I’ve written on the topic.

  • The Dangers Of Selling On Amazon And Horror Stories From Real Amazon Sellers
  • The Future Of Selling On Amazon And Key Takeaways From My Ecommerce Mastermind
  • How To Prevent Your Amazon Listings From Getting Hijacked, Stolen Or Piggybacked
  • How To Launch A 6 Figure Amazon Private Label Product – The Definitive Guide
  • What Amazon Doesn’t Want You To Know About Running An Ecommerce Business
  • Underhanded Tactics Evil Amazon Sellers Are Using To Cheat And Get Ahead
  • The Most Profitable Way To Run Amazon PPC Sponsored Product Ads – A Step By Step Guide

Selling On Amazon FBA Scalability/Portability

Thanks to FBA, Amazon takes care of storing your goods, shipping them to the end customer and handling returns. As a result, selling on Amazon is highly scalable.

You also end up spending less on customer support because Amazon handles the majority of it for you. In fact, the only thing limiting your growth is your cash flow and your ability to keep Amazon’s warehouses full of goods.

Once you have your product sourcing flow nailed down, the sky is the limit.

A Table Of Startup Costs For Each Business Model

Business Model Minimum Startup Cost
Dropshipping $3 – $500
Selling Wholesale $103 – $600
Selling Private Label $1000 – $3000
Selling Private Label On Amazon $1000 – $4000

Decisions, Decisions

When it comes to starting an online store there’s more to consider than just how much it costs to start. You also have to consider your end goals and how much you are willing to risk in order make money sooner rather than later.

After running my own online store, selling on Amazon, and helping many others start their own dropshipping stores, I can honestly say that there are pros and cons to each option.

What’s important is understanding what you want out of it, your tolerance for risk, and what you want your end game to be especially if your goal is to improve your lifestyle.

Related: Private Label vs Retail Arbitrage vs Dropshipping vs Wholesale – 8 Ecommerce Business Models Compared

Want To Learn More?

Did you enjoy this article? If so, there’s more where that came from if you sign up for my full blown course on how to create a profitable online store.

My course offers over 100+ hours of video and includes live office hours where you can ask me questions directly.

If you want to learn everything there is to know about ecommerce, be sure to check it out!

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