Low-Risk Guide to Starting an Amazon Private Label Business in 2025

Low-Risk Guide to Starting an Amazon Private Label Business in 2025 Speaker 1: Now, do you need $3,000 or $20,000 to start Amazon FBA? And could you do it in one to two months? Or are you going to be doing product research for one year, two years or just passively lurking at videos? Hello, my name is Karina at intomily and today I'm going to be discussing with you how much money is it really going to take to start Amazon FBA private label and also the length of time. We're going to cover some very important points on both aspects to make sure that you stay for the duration of the video because it will save you a lot of time and understanding. The first thing I want to mention is the amount of money it takes really depends on your goals. Now I talk about this a lot and that is the high risk model versus the low risk model. There are very niche markets that are low risk where you can afford to spend a small amount of money, order a lower MOQ and begin to see the progress Of the product versus high risk markets, which yes, you can be successful in them. However, they do take a lot more investment, right? You are going to need to invest much, much more money to make this successful. On top of that, you will also need to have the proper knowledge because you can't just jump into these expensive markets without knowing how to do it. And that, of course, takes practice and learning and experience. And I really don't recommend those high risk markets, especially when you are first starting out or even intermediate level, because a lot of mistakes accompany those markets. The problem is that it looks like a shiny object that everybody wants because, you know, typically the sales are much higher, the monthly revenue. It ranges anywhere from $30,000 to $500,000 or $1,000,000. But honestly, I don't think that should be the priority goal when starting Amazon FBA. So I definitely think you should be aiming towards the lower risk markets when you need a smaller investment and also a smaller amount of time. To really get running with these types of products, the thing I do want to say is don't put your life savings and your only money into Amazon. Of course, it is a business, so you need to be ready to spend. Some people come into this business model expecting to make money without spending money and unfortunately, that cannot happen. You do need an investment. So you can kickstart your progress and of course that's for inventory, but don't be putting in everything. And again, going back to the low risk model of things, you don't need a crazy amount. You honestly can start with $3,000, but it is a $3,000 that you are not scared to lose. Because from personal experience, I've had failing products as well. And yeah, I invested money and it fails. Sometimes you can make your money back by selling the product at breakeven price, but sometimes you also have to bear the losses. Now, I'm not saying that's going to be the case. That's why I very strongly advocate that you think about starting this business model low risk, maybe not investing as much into inventory, not ordering a very high minimum order quantity and really going for those Low revenue markets that are doing maybe $5,000 in sales as opposed to $30,000 or $100,000. And actually, I honestly don't think there's another way of doing this unless you're really willing to invest tens and thousands of dollars, which is the amount it costs to be successful in those specific markets. So if you are kind of stuck, know that you can do this low risk, but you do need money. I would suggest Setting some money aside specifically for Amazon FBA, I guess that's what they say when you lend people money or when you go to gamble. It's kind of don't bet the money you're not willing to lose and the same goes for Amazon. However, I do think this is one of the most powerful business models today, last year, two years ago and for the years to come. So this will be very advantageous to you if you stick through this and if you earn enough money to keep your inventory going. And the reason I mention that is that it factors into the cash flow of things, right? You can't just have $1,000 set aside at $2,000, $3,000. You have to think a little bit more long-term thinking of Alright, if I sell out of this inventory and Amazon does not give me the check because it hasn't been two weeks, will I have enough money to reorder inventory? Now, there's a lot of components that go into this that I won't be covering in this video, such as obviously cash flow, potentially getting loans if you need to, but I do want to say all tying back to the low risk model. If you find specific markets that Don't have high sales volume. You will see the traction of the product. You'll be able to reorder it and hopefully your profit margin is high enough where eventually and soon you can use those funds to fund your next product. Another thing I do want to mention is the lead time of the products. If you really foresee yourself having cash flow issues, then products with a shorter lead time will do you a lot of justice because Say your product lead time is one week and it's a lightweight product and you can air express ship it. And I've had some products that come to me in less than three days all the way from China, which is mind blowing. But keep in mind those products were small and lightweight. As opposed to products that require sea shipping, which can take to 35 days to 40 days if it's long shipping. Sometimes there's express shipping that's 22 days. So that kind of shortens your lead time a couple of weeks. But those products, of course, you cannot ship them by air because they're so large in volume and in weight that that's going to completely burn and put you in the negative of your profit margins. But if you do come across a lucky product and I love these types of products that have very short lead times and are able to be air-shipped, however, don't make that a priority when you're doing your product research. Anything that has profits, good profit margin of course, within reason is a good thing. But this is just something to kind of put in the back of your head when it comes to the lead time. The lead time and the product kind of production time and shipping time all factor into your cash flow. The shorter it is, the less problems you're going to have. The longer it is, the more you have to think ahead. Because if your product lead time is, let's say 30 days, then shipping is another 30 days plus miscellaneous check-ins to the Amazon warehouse. That can take anywhere from two to two and a half months, right? So what does that mean? By the time you're out of inventory, you would have already had to place an order for your next shipment, right? So just be cautious of that. You don't wanna run out of stock for too, too long because then that's kind of sort of like starting from scratch, not fully, but that just puts a damper on your business and you wanna make sure that you have that in control. So when you're thinking of product research, do keep in mind The lead time of your product, the type of product it is, how fast you can get it into Amazon to really control for those cash flow issues because it's really going to make the running of your business a lot smoother once you actually get going. One more thing that actually factors into cash flow issue is the price points of the product. If it's anything under $20, the margins are much lower. Even if the sales volume is high, so you're selling many many units, That's still going to lead to cash flow issues and potentially not enough profit. And profit is important not only because you pocket it but profit is important because that's how you scale your business. That's how you not only reinvest into your original product but that's how you get your second, your third, your fourth, your fifth product and how you keep the business feeding. And if you have a higher profit margin, which is typically products above $20, anywhere from the $20 range to the $50 range, of course, Some products like that also are not profitable. You just have to factor in everything such as obviously the cost of the product, the shipping, the PPC, all of that, right? The Amazon fees, that's a huge, huge component. But products that are higher in price are also higher in profit. And you really want to factor that in because you will need that money Not only for your fun enjoyment of starting a new business and making money on the side but also to reinvest into PPC and that is amazing because you spend money to make even more money. That's the beauty of PPC. But that can only happen if you have the advantage of higher profit margin, which comes with a higher price point. So don't go under those little products that are under $20 that are barely making a profit. You're going to have a harder time scaling and actually making money from those products. So the last thing I want to mention about price before we actually move into timing is the different business models, right? There's the private label brand. There's the wholesale brand. And then there's the retail arbitrage brand, not brand, but the concept, right? The way to do things. So I personally love private label. I think it's the winning business model. That's why I do private label. That's why I love it so much. The profit margins in there are much higher. The second one runner up would definitely be the wholesale business model just because it's scalable and it has healthy profit margins. They're slightly lower than Amazon FBA. They're about 10 to 15% with Amazon FBA private label. It's around 20% after everything. However, private label does have the advantage of having higher profit margins to 30, 40% really depending on the perceived value of your product, the type of product and the niche, all of that. But wholesale is pretty much you get what you get. It's hard to upmark a product of course in a way that adds value to the customer. It's more reselling, right? But I do also like that business model because you're not packing things up. Amazon does it for you. It's a very computer-based program. As retail arbitrage, I am not a huge fan of it because you're running around trying to get sales, packing boxes up. It does not make sense from a financial standpoint nor from a time. perspective or for your emotional and mental freedom. I don't agree with that business model. However, if you do need to make money on the side, you can try this model, but you are going to have to do some digging to find out how to actually make profits or you can pick up a side job. That might be a little bit easier, but the private label margins are much higher. And the great thing is you actually own the business. So I do recommend private label over everything else as a brand owner and as for scalability and more money in your pocket perspective. Now let's move on to the precious time that you have to spend to actually start to see traction in this business model. Let's first start with the hardest I guess it's not hard once you understand what you're doing, but that's getting running and doing your product research. That is the most, most, most important part because if you don't do your product research correctly, then nothing will be correct afterwards. It will be very difficult. So you do need the time to prepare. It's not like you can just go on Amazon and sell whatever you want. That's not how it works. You're going to need to be educated. So you have to get your information from credible sources that teach you to do things in a proper systematic ways so you can actually avoid red flags, avoid mistakes. Because honestly, you can save so much time and money, honestly, weeks, months, thousands of dollars if you No simple things. Sometimes they are simple. People don't understand how simple they are. They make these mistakes that could have easily been avoided by understanding why not to do this and why to go a different way. So you are going to need to spend a little bit of time educating yourself. I suggest knowing how the business model works from A to Z and then really focusing in on each step when you are planning on launching the product. One of the most important ones is product research and really educating that. And knowing the kind of a theoretical ins and outs will be definitely put into action and into practice when you actually begin your product research. And this is the stage that is definitely the most time consuming and has a very steep Learning curve just because it's fresh. You're learning it from the beginning and you're kind of looking at these markets and seeing what's going to be profitable, what's not, what's a huge red flag and a huge X and then over time You begin to kind of notice how it becomes easier and you begin to see what works and what doesn't. I like to say, if you can, spend at least four hours a day doing product research and do it every day. I mean, it seems like a lot. If you can't do four hours, do two hours, but at least do something every day. And after two weeks, you will begin to see that clarity of product research. And who knows, after that it's smooth sailing. You might be able to find a product in a day, maybe a week, maybe a month, but I would say the most important thing is to take action and to actually move forward with the product. I cannot tell you how many people actually find a product and then sit on it. They sit on it, they don't order it, That's the worst thing you can do, right? The next steps is pretty much everything. It depends on the product. It's kind of planning it out, having it manufactured, shipped. That's all honestly not the concern. The concern is actually getting your product and knowing what it's going to be, right? So you find it, you look at the numbers and the numbers make sense. Everything else is a lot easier. So do that part and worry about everything else later. As far as the other business models and the timeline of those again, it really varies. I know that wholesale is very How to stay relationship focused. So you have to focus on reaching out to suppliers, really hunting the deals down and that takes a lot with the email correspondences and looking at deals through emails and also kind of doing other product analysis techniques. The timeline is shorter. It's more of a relational business. And as far as retail arbitrage, I mean, you could probably do it today. I've heard that a lot of people do go to their local clearance racks. There are a lot of restrictions with the brands and reselling those arbitrage brands and even wholesale brands. So that's a barrier in and of itself, but that you should know if you are jumping on those business models. To wrap this up, just be aware that in order to be successful in anything, of course, you have to invest the time into your education about the topic and also capital because you need those funds to get things rolling. So make sure that you actually take action On whatever business model or whatever your next steps are into kind of starting anything that's Amazon FBA related.