You’ve probably heard the success stories—people claiming to make six-figure incomes selling on Amazon. Is this really possible?
How to start Amazon FBA? Is Amazon FBA still worth it in 2025? How does it actually work?
This guide will walk you through everything you need to know: how to get started, the pros and cons, potential costs, and the biggest mistakes new sellers make.
By the end, you’ll have a clear roadmap for launching your first Amazon FBA business the right way.
Shortcut, anyone? What if you didn’t have to start from scratch? Starting from scratch takes a lot of time and money. A lot of new sellers fail. At Investors Club, you can buy a profitable, established Amazon FBA business that’s already generating income. You then do not need to learn how to start FBA business, you just need to learn how to run a successful one.
What is Amazon FBA?
FBA stands for Fulfillment by Amazon, Amazon’s solution for sellers who want to outsource their logistics. With FBA, you store your products in Amazon’s warehouses, and when a customer places an order, Amazon picks, packs, ships, and delivers your product. They also handle all customer service and returns.
Amazon customers expect fast shipping, in today’s market, fast shipping isn’t just a nice-to-have—it’s essential. When customers shop on Amazon, they typically choose sellers who offer Prime shipping. If you’re not using FBA while your competitors are, you’re likely losing sales to sellers who can deliver faster and cheaper..
And it works. In fact, over 90% of Amazon’s top third-party sellers use FBA.
What Does Amazon FBA Include?
When you enroll your products in Amazon FBA, Amazon provides:
- Storage in their secure fulfillment centers.
- Order fulfillment, including picking, packing, and shipping.
- Customer service for questions and concerns about orders.
- Returns processing, making it easy for customers to send items back.
What FBA Isn’t
FBA isn’t a business model in itself—it’s a fulfillment method. Whether you’re selling private label products, doing retail arbitrage, or expanding into wholesale, FBA is how you get those products delivered to customers. It’s the back-end support, but you’re still responsible for finding products, creating listings, and driving sales.
How Does Amazon FBA Work?
At its core, Amazon FBA is about leveraging Amazon’s massive logistics network. Instead of you packing boxes in your living room and making daily runs to the post office, Amazon does all the heavy lifting – literally and figuratively. Your products sit in their fulfillment centers—big, advanced warehouses scattered across the globe—ready to be shipped to customers in as little as one day. And when things go wrong (returns, customer complaints), Amazon’s customer service team steps in.
Here is how Amazon FBA works:
You Find or Create a Product to Sell
Before anything else happens, you need a product. Whether you’re selling private label goods (your own branded products), wholesale items, or flipping retail arbitrage finds, the process starts with sourcing inventory.
You Ship Inventory to Amazon’s Fulfillment Centers
You send your inventory to Amazon’s warehouses (they’ll tell you which ones). Once Amazon receives your products, they’re logged into their system and stored securely. From this point, you’re hands-off when it comes to fulfillment.
Customers Purchase Your Product on Amazon
A customer visits Amazon, finds your product listing and places an order.
Amazon Handles Picking, Packing, and Shipping
As soon as an order comes in, Amazon employees:
- Pick the item from their shelves
- Pack it in a secure Amazon box
- Ship it out to your customer
Most orders are eligible for Prime shipping, which means they can arrive in as little as one day.
Amazon Provides Customer Service and Handles Returns
Once the customer has the product, Amazon manages customer inquiries, returns and refunds.
You Get Paid
Amazon deposits your earnings into your bank account every two weeks (minus their fees). In Seller Central, you can track sales, fees, returns, and performance metrics.
A Real-World Example
Let’s say you’re selling a caffeine breath spray, like Jeff did in his FBA journey.
- You source the product and spend time (and money) on product design, branding, and manufacturing.
- After shipping 15,000 units to Amazon’s warehouses, Amazon handles everything else: fulfillment, customer service, and returns.
- Jeff’s product is eligible for Prime shipping, giving him an edge over non-FBA sellers and helping him win the Buy Box, where 80% of Amazon sales happen.
What you control vs. what Amazon controls:
| You Control | Amazon Controls |
| Product research and sourcing | Storage in fulfillment centers |
| Listing creation, optimization, and marketing | Picking, packing, and shipping orders |
| Inventory levels (sending stock to Amazon) | Customer service and returns processing |
| Pricing strategy and PPC campaigns | Payments to your bank account |
Pros and Cons of Amazon FBA
Amazon FBA offers convenience and scalability, but it comes at a cost. Many beginners underestimate both the financial investment and operational complexities involved.
| Pros | Cons |
| Hands-Off Fulfillment and Shipping Once your products are at Amazon’s fulfillment centers, Amazon will handle the rest. They will take care of storing your inventory, as well as packing and shipping orders to your customers. They also handle customer service and returns. Access to Prime Customers When you use FBA, your products are automatically eligible for Amazon Prime. That means fast, free shipping for millions of Prime members worldwide. Because Prime customers tend to shop more often and spend more money, this can increase your sales. Increased Visibility and Higher Conversion Rates Amazon’s algorithm favors FBA sellers. Your products are more likely to rank higher in Amazon search results, be included in promotions like “Frequently Bought Together”, appear in “Buy It Again” sections for repeat customers, and win the Buy Box, where over 80% of Amazon’s sales happen. Scalability Without the Overhead With Amazon handling logistics, you can scale your business more easily. Amazon’s massive infrastructure will take care of spikes in demand. Top-Tier Customer Service Amazon manages customer inquiries, refunds, and returns on your behalf. Since buyers trust Amazon, this increases customer confidence, boosts customer satisfaction, and helps you maintain a strong seller rating. Multi-Channel Fulfillment If you sell on platforms like Shopify, eBay, or Etsy, you can use FBA to handle those orders too. This service is called Multi-Channel Fulfillment, and it allows you to leverage Amazon’s logistics network to grow your sales beyond Amazon. | Costs Can Add Up Quickly FBA isn’t free, and if you don’t manage your business carefully, fees can eat away at your profits. We cover all the fees in more details in the “Fess” section below. Expect to pay: Fulfillment fees (based on item size and weight) Monthly storage fees (charged per cubic foot) Long-term storage fees (for inventory stored more than 365 days) These charges can be especially high during peak seasons (October–December), and for larger or slow-moving items. Beginners often underestimate these costs when calculating their margins. Strict Product Prep and Shipping Requirements Amazon has very specific requirements for how products are prepped, packaged, and labeled. If your products arrive at Amazon’s fulfillment centers and don’t meet these requirements, Amazon may: Refuse your shipment Charge additional unplanned prep fees Delay your inventory from being available for sale This can be frustrating for new sellers who aren’t familiar with Amazon’s processes or who don’t work with a reliable prep service. Less Control Over Your Brand Since your products arrive in Amazon-branded boxes, you don’t really have a lot of freedom to create unique branding and unboxing experience or include promotional materials. If you’re trying to build a brand, this might make it harder to create loyal customers. Higher Return Rates Amazon’s generous return policy applies to FBA sellers as well. While this increases buyer confidence, it can also lead to more returns, even for perfectly good products. Some sellers report that customers are more likely to make impulse purchases—and then return items they don’t really want. Returned items may be classified as unsellable, leaving you to absorb the loss. Potential Inventory Risks There is always a risk that Amazon will change its policies, raise fees, or suspend your account. If you store all your inventory in Amazon’s warehouses, you risk losing access to your entire inventory overnight. |
Amazon FBA Fees & Costs
FBA can be incredibly convenient, but that convenience comes with a price tag. If you don’t fully understand the true cost of selling through FBA, you could find yourself generating revenue but no actual profit.
In this section, we’ll break down every major cost you need to know about, explain Amazon’s 2025 fee structure, and share strategies to keep those costs under control.
When it comes to Amazon FBA, you’ll encounter two primary types of fees:
- Fulfillment Fees
- Storage Fees
There are several other costs to consider, including returns processing fees, removal fees, and long-term storage surcharges.
Amazon FBA Fulfillment Fees
These are the fees you pay every time Amazon picks, packs, and ships an order for you. Fulfillment fees also include customer service and handling returns.
Amazon calculates this fee per unit sold, based on:
- Product size tier (standard-size or oversized)
- Weight (including packaging)
- Dimensions
Example fulfillment fees (standard-size products):
| Size Tier | Weight | Fulfillment Fee |
| Small standard | 4 oz or less | $3.22 per unit |
| Large standard | 6-12 oz | $4.75 per unit |
| Large standard | 1-2 lb | $5.99 per unit |
Tip: The lighter and smaller your product, the less you pay in fulfillment fees. This is why many beginners focus on lightweight, small products when starting out.
Amazon FBA Storage Fees
Amazon charges you monthly storage fees to keep your products in their fulfillment centers. These fees depend on:
- Time of year
- Product size
- Whether your item is considered dangerous goods
Monthly Storage Fees (2025):
| Season | Standard-Size Items | Oversize Items |
| January – September | $0.87 per cubic ft | $0.56 per cubic ft |
| October – December | $2.40 per cubic ft | $1.40 per cubic ft |
Why does it cost more during Q4? Demand is higher in the holiday season, so Amazon charges more for storage space.
Tip: Don’t overstock! Only send what you expect to sell within a couple of months to avoid excessive storage costs.
Long-Term Storage Fees (Aged Inventory Surcharge)
If your products sit in Amazon’s warehouse for over 181 days, you’ll face additional long-term storage fees.
Aged Inventory Fees (2025):
| Inventory Age | Surcharge (per cubic foot) |
| 181-210 days | $0.50 |
| 211-240 days | $1.00 |
| 241-270 days | $1.50 |
| 271-365 days | $4.20 |
| Over 365 days | $6.90 or $0.15 per unit (whichever is greater) |
Why it matters: Amazon penalizes you for slow-moving inventory. If you’re not careful, these fees can crush your profit margins.
Returns Processing Fees
When a customer returns an item, Amazon handles it—but you’ll be charged a returns processing fee. This fee is the same as the fulfillment fee for that product.
Some categories (clothing, shoes and electronics) are known to have high return rates – make sure you factor this into your profitability calculations.
Removal and Disposal Fees
If you no longer want your inventory, you can have Amazon return it or dispose of it.
Typical removal & disposal fees (2025):
| Item Size | Fee per unit (removal) | Fee per unit (disposal) |
| Standard-Size | $0.97 | $0.85 |
| Oversize | $2.15 | $1.97 |
Tip: Plan ahead! Clearing out unsellable or slow-moving stock early saves you from painful storage and removal fees later.
Unplanned Service Fees
Your products must be prepared according to Amazon’s standards. If they are not, Amazon will handle tasks like labeling, polybagging, or bubble wrapping – at an additional cost.
Common unplanned prep fees:
| Service | Fee per unit |
| Labeling | $0.55 |
| Polybagging | $1.05 |
| Bubble Wrapping | $1.95 |
Follow Amazon’s prep and packaging guidelines to the letter to avoid these extra costs.
Storage Utilization Surcharge (New in 2025)
Amazon introduced a storage utilization surcharge for professional sellers with high storage utilization (inventory that sits too long relative to sales).
This surcharge can add up on top of monthly storage fees.
When it applies:
- You exceed 26 weeks of storage utilization
- Sellers with high storage volumes are impacted most
For most beginners with smaller inventories, this may not be a huge concern—but it’s something to watch as you grow.
The Cost of Getting Started with Amazon FBA
Beyond Amazon’s ongoing fees, there are start-up costs to consider.
These can vary wildly depending on your product, but here’s a ballpark breakdown from real sellers:
| Start-Up Cost | Estimated Range |
| Product Inventory | $500 – $5,000+ |
| Product Samples | $50 – $500 |
| Logo & Branding | $100 – $1,000+ |
| Product Photography | $250 – $1,000+ |
| UPC Codes (GS1) | $250+ (10 codes) |
| Trademark Registration | $350 – $700+ |
| Amazon Professional Account | $39.99/month |
Reality Check: While some gurus claim you can start with just $500, most successful sellers invest $3,000 – $10,000+ to launch their first product properly.
For example, one seller you read about spent $20,679 before launching. And he made some costly mistakes—like investing too much in branding and expensive agencies—without validating his product first.
How to Manage Amazon FBA Costs (and Stay Profitable)
Want to make sure your FBA business doesn’t bleed money? Here are some key tips:
- Pick the right products: Small, light, high-demand, low-competition.
- Watch your inventory levels: Don’t overstock; restock strategically.
- Follow Amazon’s prep rules: Avoid unplanned service fees.
- Keep an eye on aged inventory: Regularly check for stranded or slow-moving stock.
- Use tools like the Amazon FBA Revenue Calculator to calculate potential profit before launching a product.
Step-by-Step: How to Start an Amazon FBA Business
If you’ve made it this far, you’re probably wondering: “How do I actually start an Amazon FBA business?”
The process can feel overwhelming at first, but when you break it down, it’s completely manageable. We’ll walk you through exactly how to get started with Amazon FBA—from setting up your seller account to launching your first product.
Step 1: Create an Amazon Seller Account
Before you can sell anything, you need an Amazon Seller Central account. This is your dashboard for managing everything—your products, orders, reports, ads, and more.
Here’s how to sign up:
- Visit sellercentral.amazon.com.
- Click Sign Up.
- Choose between:
- Individual Plan: No monthly fee, but Amazon charges $0.99 per item sold.
- Professional Plan: $39.99/month (recommended if you plan to sell more than 40 items a month or want access to tools like advertising).
- Provide your business info, tax details, credit card, and bank account information.
Step 2: Choose Your Product (Do NOT Skip the Research!)
This is the most important—and often the trickiest—part of starting an Amazon FBA business.
A common beginner mistake is picking a product just because they like it. Success on Amazon comes from data-driven decisions, not gut feelings.
What makes a good FBA product?
- High demand, low competition
- Sells for $15–$50 (sweet spot for impulse buys and healthy margins)
- Small and lightweight (lower shipping and storage fees)
- Not overly seasonal (avoid products that only sell a few months of the year)
- Simple, with minimal moving parts (less risk for returns and quality issues)
- No complicated certifications or legal restrictions (some categories are gated, and others—like supplements—require strict compliance)
Where to find product ideas:
- Amazon Best Sellers and Movers & Shakers
- Product research tools like AMZScout or Jungle Scout
- Competitor listings and customer reviews (look for pain points to solve)
- Crowdfunding platforms like Kickstarter for trending products
- Google Trends to spot rising demand
Step 3: Find a Reliable Supplier or Manufacturer
Once you’ve chosen a product, you’ll need to source it. You have several options depending on your budget and business model.
Common sourcing methods:
- Alibaba: The most popular for private label products. Look for suppliers with high ratings and trade assurance.
- ThomasNet: Great for finding U.S.-based manufacturers (good for faster shipping and made-in-USA branding).
- Google search: Sometimes searching “ + manufacturer” leads you to hidden gems.
- Trade shows: In-person connections can lead to better pricing and custom options.
What to ask suppliers:
- Minimum Order Quantities (MOQ)
- Unit cost (based on different order volumes)
- Lead times (production and shipping)
- Samples (ALWAYS test before you buy!)
- Private label and customization options
- Certifications (especially if you’re selling electronics, toys, or anything consumable)
Tip: Don’t automatically go with the cheapest supplier. Quality issues can kill your business before it starts.
Step 4: Calculate Your Profit Margins
This is where a lot of beginners mess up. It’s not enough to have a great product—you need healthy profit margins.
Things to factor into your costs:
- Product cost
- Shipping (to you or to Amazon’s warehouse)
- Amazon FBA fees (fulfillment and storage)
- Referral fees (typically 15% of the sale price)
- Advertising (PPC)
- Returns and damaged goods
Aim for at least a 30% profit margin after all costs.
Step 5: Create Your Brand (Logo, Packaging, and More)
Building a strong brand sets you apart from the sea of generic products on Amazon.
What you’ll need:
- Brand name
- Logo (hire a professional designer or use tools like Canva to create a clean, modern logo)
- Packaging design (your supplier may offer help here)
- Product inserts (encourage reviews, offer discounts, or invite customers to join your email list)
- Brand Registry (optional, but highly recommended)
Tip: You’ll need a registered trademark to enroll in Amazon’s Brand Registry. It unlocks features like A+ Content (enhanced product descriptions) and protects your listings from hijackers.
Step 6: Create a High-Converting Product Listing
Your product listing is your sales page. It’s where potential customers decide whether to click “Buy Now” or move on.
Key components of a great listing:
- Title: Clear, keyword-rich, but not spammy
- Bullet points: Highlight key features and benefits
- Description: Tell your product’s story—why should they buy from you?
- Images: Invest in professional product photography (lifestyle shots, close-ups, infographics)
- Backend keywords: Optimize for Amazon SEO (think like your customer—what would they search for?)
Tip: A/B test your main image and title using Amazon Experiments (available for Brand Registered sellers).
Step 7: Ship Your Inventory to Amazon FBA
Once you have your product and your listing is ready, it’s time to send inventory to Amazon’s fulfillment centers.
Steps to ship to Amazon:
- In Seller Central, go to Inventory > Manage FBA Inventory
- Select your product(s) and click Send/Replenish Inventory
- Create your shipping plan
- Choose Individual Products or Case-Packed Products
- Label your products (either you do it or pay Amazon to do it for you)
- Prepare packaging according to Amazon’s guidelines
- Ship via Amazon’s partner carriers (you’ll get discounted rates)
Once Amazon receives your products, they’ll be available for sale!
Step 8: Launch and Promote Your Product
You’ve done the hard work—now it’s time to launch.
Ways to get early sales and reviews:
- Amazon PPC (Pay-Per-Click): Start with Sponsored Product ads
- Discount codes or coupons: Attract bargain hunters
- Social media: Leverage platforms like TikTok, Instagram, or YouTube to create buzz
- Email lists: If you’ve built an audience beforehand, email them
- Early Reviewer Program and Vine (Brand Registered sellers only): Get initial reviews faster
Reality check: Most beginners spend at least $500–$1,500 on PPC ads in the first few months to rank organically.
Step 9: Optimize, Scale, and Stay Profitable
Once you have sales coming in, the work isn’t over. Now it’s time to optimize.
What to focus on:
- Monitor PPC campaigns: Lower bids on poor-performing keywords, increase bids on winners
- Get more reviews: Use Follow-Up emails (within Amazon’s rules!)
- Improve conversion rates: Tweak images, bullet points, and descriptions
- Expand your product line: Once you had success with one product, you can rinse and repeat
- Consider external channels: Build your own website, run Google Ads, or expand to other marketplaces
Amazon FBA Success Tips for Beginners
Success on Amazon isn’t just about launching a product—it’s about running a smart, efficient, and optimized business from day one.
Here are the best tips—straight from experienced sellers and hard-earned lessons—to help you avoid rookie mistakes and set yourself up for success.
Don’t Skip Product Research
This is where success or failure often begins.
Far too many new sellers jump into selling a product they “love,” without checking if anyone else does. Amazon rewards data-driven decisions.
What to focus on:
- Look for consistent demand (check sales history, not just current rankings).
- Avoid categories that are over-saturated unless you can clearly differentiate.
- Use tools like AMZScout, Helium 10, or Jungle Scout to validate the market.
- Study customer reviews to find pain points and areas where competitors fall short. Can you solve a problem better?
Understand (and Respect) Your Numbers
Profit margins can look great on paper—until you factor in all the costs. Amazon FBA fees, shipping costs, PPC advertising, returns… it adds up quickly.
Be sure you:
- Calculate your total landed cost (product + shipping + customs, if applicable).
- Include Amazon’s referral fees, FBA fulfillment fees, and storage costs.
- Aim for a minimum 30% net profit margin after everything.
Build a Brand, Not Just a Product
Selling random products without a cohesive strategy makes it harder to build trust—and customer loyalty. Amazon FBA isn’t just about a product; it’s about building a brand people trust.
How to start:
- Pick a niche that allows you to expand your product line later.
- Invest in high-quality product photos—these are your digital storefront.
- Create consistent branding with your logo, packaging, and inserts.
- Consider Brand Registry to unlock enhanced content (A+ Content) and protect your listings.
Start Small, Then Scale
Many beginners make the mistake of over-ordering inventory on their first product. Don’t do it.
Here’s a smarter approach:
- Start with a small test order (usually 200–500 units) to gauge demand.
- Use the first few months to collect reviews, optimize your listing, and fine-tune PPC ads.
- Once you have proof of concept, scale up your orders and diversify your marketing efforts.
Tip: Running out of stock hurts your rankings. Once you know the sales velocity, plan restocks well in advance to avoid stockouts.
Focus on Getting Reviews (the Right Way)
Reviews are the social proof that drives conversions. But Amazon has strict rules about how you ask for them.
Safe strategies for getting reviews:
- Enroll in Amazon Vine (for Brand Registered sellers).
- Use the Request a Review button in Seller Central.
- Include product inserts asking for honest feedback (don’t offer incentives).
- Deliver excellent customer service—happy buyers are more likely to leave positive reviews.
Warning: Never buy fake reviews. Amazon’s penalties for manipulation can be severe, including permanent suspension.
Master Amazon PPC Early
If you want visibility, you’ll need to pay for it—especially when you’re starting out. But PPC (Pay-Per-Click) campaigns can either boost your business or burn through your cash.
PPC tips for beginners:
- Start with Sponsored Product ads (they’re simpler and effective).
- Focus on exact match keywords for tighter targeting.
- Use automatic campaigns initially to gather data, then create manual campaigns.
- Monitor your ACOS (Advertising Cost of Sale) and aim for profitability, not just clicks.
Reality Check: Running PPC ads can eat into profits fast if you don’t know what you’re doing. Start with a small budget and scale only when you see results.
Obsess Over Your Listings
Your product listing isn’t something you write once and ignore. Constant optimization can mean the difference between flat sales and ranking on page one.
How to optimize:
- Continuously test main images, titles, and bullet points.
- Add lifestyle images that show the product in use.
- Make sure your backend keywords cover additional search terms (misspellings, synonyms).
- Update your listing based on customer feedback—address common objections and FAQs.
Provide Top-Notch Customer Service
Even if Amazon handles the shipping and returns, how you interact with customers matters.
Best practices:
- Respond promptly to customer questions (even pre-sales inquiries).
- Resolve issues proactively—if someone leaves a negative review, reach out and offer to make it right.
- Monitor customer feedback in Seller Central and address complaints.
Watch Your Metrics Like a Hawk
Amazon tracks your performance through metrics—and they do matter. Low metrics can limit your ability to send inventory or even suspend your account. Stay on top of your numbers.
Key metrics to monitor:
- Order Defect Rate (ODR): Keep it below 1%.
- Late Shipment Rate: Should always be 0% (FBA helps here).
- Inventory Performance Index (IPI): Impacts how much warehouse space Amazon gives you.
- Conversion Rate: Tells you how well your listing is converting visitors into buyers.
Stay Informed and Keep Learning
Amazon is constantly changing its rules, fees, and algorithms. What works today might not work tomorrow.
Stay ahead by:
- Joining Amazon seller communities (Facebook groups, Reddit, forums).
- Following reputable blogs and YouTube channels (but skip the “get rich quick” gurus).
- Reading Amazon’s official Seller Central updates.
- Taking reputable courses if you’re serious about scaling.
Final Thoughts: Is Amazon FBA Worth It?
By now, you’ve probably gathered that Amazon FBA isn’t some magical, push-button way to make money. Despite what some YouTube gurus might promise, there’s no “easy button” here. Like any real business, it takes research, strategy, effort—and yes, a financial investment—to succeed.
But here’s the good news:
Amazon FBA can be worth it. Thousands of sellers have built profitable businesses using Amazon’s fulfillment network. They’ve leveraged the power of Prime, Amazon’s customer trust, and its global logistics to create income streams that are hard to replicate anywhere else.
So… Is it right for YOU?
It depends on your goals—and your expectations.
If you’re looking for:
- A legitimate, scalable e-commerce business model
- Access to millions of customers without managing your own warehouse or shipping
- The ability to grow a brand that could eventually expand beyond Amazon
Then FBA can be a powerful tool in your business arsenal.
But if you’re hoping for:
- Instant profits
- A hands-off, set-it-and-forget-it income stream
- Guaranteed success with minimal effort
You might be disappointed.
Ready to start your FBA journey?
Re-read this guide, take your time with research, and make smart decisions. Your future FBA success story could be one product away.
And when you’ve built a successful Amazon FBA business and are ready to exit, you can list it for free on Investors Club and connect with serious buyers.