Whether it’s insufficient business experience, lack of a support structure, or poor timing, people have several reasons not to pursue their entrepreneurial ambitions. Don’t let a lack of starting funds be one of them! Read on to learn how you can get started on Amazon without going into debt.

Types of Amazon Business

Not all Amazon businesses are created alike. Before you set up shop (figuratively, of course), learning more about the three main types of Amazon businesses will help you determine which is perfect for you. Let’s take a quick look at your options below.


With dropshipping, you can purchase products from a manufacturer and sell them online for a profit. The catch here is that you don’t actually keep these products in your possession since they’re being shipped to your customer directly from the source.

Are you unsure if this is a sustainable business model? Statistics show that over 34% of Amazon sellers’ orders are fulfilled via dropshipping.

A big plus with dropshipping on Amazon is that you save on AMZ storage and warehousing fees, while still being able to offer your customers unparalleled product choices. The only drawback is the research and hard work it will take to find a reliable manufacturer or supplier that can provide you with quality products and ship orders on time.

Online Arbitrage

With this model, you can purchase goods from physical stores (online or offline) and sell them at a higher price elsewhere—in this case, Amazon. This means the products are already in your possession, which of course means that you don’t have to worry about third-party sources shipping out on time or packaging them correctly.

Does this sound practical? Do remember that this model is more suitable for individuals who can afford an upfront cost for purchasing inventory from established stores. You’ll also need a space to keep inventory at hand.

Private Label

As the name suggests, this means you take an existing product from the manufacturer and design your own box, label artwork, and distribution methods. Most Amazon sellers like to look at top-selling products with few reviews, buy those, and rebrand them for selling on their own store. Are you unsure if this is a feasible business model? 

Survey statistics indicate that as many as 67% of all sellers on Amazon prefer this business model.

How to Start on a Budget

Below are the steps you need to take to get started on your Amazon seller journey without going into debt.

#1 – Find a Product to Sell
AMZScout pricing estimate

You can use tools like AMZScout to identify trending or hot products on Amazon. This is where you’ll get to use features such as reverse ASIN searches and take a look at market trends to see which products are in high demand. Are you wondering what AMZScout will cost you? Between $19 to $50, depending on the pack and what features you want access to.

#2 – Estimate Your Costs and Profits

When we talk about selling on Amazon, one of the first things we tend to look at is the manufacturer’s cost vs. seller’s profit. To calculate this, you take the manufacturer cost (the cost to produce a product) and subtract that from the full retail price. You then divide that by how many units you estimate selling to arrive at your average profit for every unit sold.

This way, you have a rough idea of how many units you need to sell to earn a profit. Plus, you also get an overview of how profitable the product really is. What’s the cost to you? Just a little time.

#3 – Source Products

Now that you know what product you want to sell and how much to sell it for, it’s time to look for suppliers. If you’re taking the dropshipping route, you’ll need to find a supplier, whereas if you’ve decided on online arbitrage, you’ll need to find a manufacturer.

You need to keep in mind when looking for a supplier or manufacturer that you might not get it right the first time. Your best way forward is to ask the right questions and pay close attention to how they work to see if they’re the right fit for you. Don’t forget to check for product quality and consistency in quality.

#4 – Add to Amazon Listing

Now that everything’s sorted, it’s time to create your Amazon listing. When creating a listing, it’s important to be mindful of your SEO strategy, Amazon’s prohibited keyword, and listing guidelines. Do consider investing in a copywriter who will create engaging copy for you to maximize your sales. Are you wondering how much freelance copywriters charge? They charge somewhere in the range of $19 to $80 an hour, depending on quantity and quality of content.

#5 – Make Sales

If you’ve played your cards right, your marketing, SEO, and listing copy strategy should bring in sales in no time. All that’s left now is to track which products are doing well (sell more of these) and which ones aren’t (remove these from your listings).

#6 – Ship Products to Customers

Depending on your business model (remember dropshipping?), you may or may not need to package and ship orders yourself. Either way, it’s a good rule of thumb to fulfill orders as quickly as possible if you want to remain in Amazon’s and your customers’ good graces. Otherwise, you risk getting bad reviews, and who needs that kind of negativity, right?

Starting an online business can feel overwhelming, but it is by no means impossible, and it doesn’t have to cost an arm and a leg. All you need is the proper guidance and a viable business plan, supported by your dedication and perseverance.

With the right tools at hand, you can take control of your financial future without burying yourself in debt or blowing all your savings on a risky investment. We hope this article has helped shed some light on how you can start an Amazon business on a budget.

Happy entrepreneurship to you!

Have any more tips on how to build an Amazon business on a budget? Let us know down in the comments.

This article originally published on GREY Journal.