Amazon Sellers Working Capital: A Compact Guide For Newbie Sellers

The pandemic has rendered many people retrenched from their jobs. Because of this, several individuals have resorted to becoming entrepreneurs to make up for the loss. You might want to become a seller yourself since you have an idea of what to sell. But where and how do you start?   

Like any business, big or small, you need working capital before you can begin selling anything. Additionally, you also need to find a platform to sell your products easily. Amazon, among other sites, is an excellent platform for newbie sellers to earn money while staying safe at home. However easy it sounds, online selling takes a lot of patience and planning.   

If you’re thinking about becoming an Amazon seller, read this brief guide on your initial costs to help you start on your journey:  

1. Amazon Subscription  

You can become an Amazon seller with a free account. The professional version requires you to pay a monthly subscription fee of USD$39.99. Although, with a free account, you’ll pay 99 cents for every successful sale.

This arrangement appears the best option for starters, but let’s say you sell a hundred products each day. You’ll be spending more daily than you could monthly with a professional account.  

Even before you make that account, you’ll need to prepare a budget. If you’re unsure where to begin, you can request financial assistance for Amazon sellers working capital. Your capital should cover the basics of your online business. Most novice online sellers start with a USD$300 to USD$4,000 capital. Depending on how fast you want your little shop to grow, you can invest less or more, but you can get started with a low investment amount.  

An Amazon subscription fee won’t make much of a dent in your capital. So, if possible, make the most out of creating a professional account. A paid version also comes with perks, aside from the absence of any deductions per sold product.  

2. Inventory  

Your products and inventory should take up the bulk of your working capital. These are the items you’ll be putting up for sale, after all. Inventory may cost up to approximately USD$2,000.   

The best way to work around a limited budget when starting is to buy products in bulk instead of retail. Bulk orders often cost less, thanks to a discount. New and experienced salespeople alike take advantage of buying wholesale products to save up on costs.   

Take note, though, that some suppliers have a limit to how many or how few items you can order. They could have a maximum amount of 200 pieces, for example, for discounts to apply. So, if you plan to order below or beyond that, expect to buy each item at their retail price or fees per additional piece.   

3. Packaging And Customization  

Some new sellers make the mistake of leaving out packaging in the planning process of their business. The proper packaging can spell the difference between items getting damaged in transit and arriving at their destination in one piece.  

Like your products, you can buy packaging materials in bulk. They come cheaper due to discounts. Ensure that your supplier is reputable so you won’t receive any weak and low-quality shipping boxes. Also, don’t forget about shipping labels, address labels, packing tape, and bubble wrap. It would help if you have all of these accounted for, too, in your Amazon sellers working capital.

Once you gain enough revenue, you can customize your packaging if you wish. You can add personalized stickers that show your brand name and change the color of your boxes to match your business’ theme. For more options, check out these creative small business packaging ideas to get you started.  

4. Shipping

While shipping fees seem more like a customer matter, it also matters to sellers. You’ll be receiving your wholesale orders via shipment, as well as ship packaged orders to the Amazon warehouse. As such, your capital should include coverage for shipping, too.  

Costs are dependent on a few factors:  

• Delivery time  

• Transportation method  

• Item weight  

Slower deliveries, shipment-by-sea, and lighter products are the cheapest. As a newbie seller, you may take advantage of the more affordable option. The only con to that is the time it takes to go from point A to point B. Faster times and delivery methods can incur additional charges, but at least you get what you need and ship out your orders at an earlier time.  

5. Advertising   

Your products won’t get anywhere without a little bit of advertising. Make it a point to take high-quality photos of your products. It’s a simple way to increase sales because most customers will lean more towards professional-looking product photos.   

You can find many independent professional photographers with varying commission fees and sometimes offer photography package deals. Invest in an experienced photographer to ensure you get stunning photos of your products from all possible angles.   

Once you get your photos, post them on your social media accounts. That way, you’ll gather potential customers from different parts of the Internet. If your Amazon sellers working capital can cover it, you could post some paid ads on places like Facebook and Instagram to get some traction. You can also check out this guide on social media marketing for Amazon sellers for more information.  

Conclusion  

To earn money is to spend money first. As a newbie Amazon seller, you need to understand that businesses start with capital and sound investments. You don’t have to work alone if you lack financial wisdom since you could always ask for aid from experts when you need it.

You may encounter a few bumps along the way as you begin your journey in the online marketplace, but mistakes help you learn and grow. And you’ll soon earn back the capital you started within no time.