Can we still start a business on Amazon in 2020? Judging from Amazon’s current situation, 2020 will still be a period of growth for Amazon. So how much start-up capital do we need to invest to enter Amazon?
How much start-up capital does an individual need to start a business on Amazon in 2020?
I. Cost of opening a store (fixed cost)
1. Company registration
2. Bookkeeping agency
3. Venue
4. Computer and network
5. Special collection tool (for Amazon’s capital recovery)
6. UPC/EAN code (for submitting products)
7. Platform monthly rent
II. Cost of operating products (floating cost)
1. Sample procurement
2. Product procurement
3. Freight logistics
4. Sales commission
5. Warehousing logistics
6. Return and exchange solution
7. Clear order information
8. Internal website marketing promotion (apply one or more )
(1) Advertising words
(2) Limited time flash sales
(3) Giveaway
(4) Early reviewer program
(5) Set coupons
(6) Increase sales
9. Off-site promotion (optional)
10. Trademark registration (optional)
11. VAT tax (currently only required in 5 European countries)
Three. Staff costs (floating costs)
1. One-person entrepreneurship
2. Multi-person partnership
3. Hiring people to operate
1. Company registration (obtaining a business license)
Here are basically the fees for engraving the official seal and opening an account (you can choose not to open an account in the early stage depending on your own situation).
Engraving the official seal costs about 600-800. Different banks have different fees for opening an account, about 1K.
You can choose to apply for registration yourself or choose an agent, the fees are similar.
For a very small number of companies that choose to apply for registration of overseas companies, the fees are calculated according to the specific circumstances
2. Bookkeeping by an agent
Most newly established companies do not have financial accounting, and it is too extravagant and wasteful to handle such procedures by themselves. Generally, they choose to cooperate with third-party service organizations and file tax returns every month. The cost of registering a company and accounting for small-scale taxpayers is basically around 2K per year. If you need to issue a value-added invoice, you will need 6-7k
Note for novices: When registering and cooperating with a third-party company, ask clearly whether it has the company seal and the account opening fee of a financial institution, and whether it can give you the completed accounts. Try to choose a reliable company as much as possible, otherwise if the accounts are not done well, it will be included in the list of abnormal operations, and it will be very inconvenient to go to the Industrial and Commercial Bureau and the tax bureau to remove the abnormalities.
3. Location
The policies in different places are different. In the past, Shenzhen could pay for the address, but the inspection began to be stricter in 2020. If you must rent an office space, 1-2 people can choose a co-working workstation. The location and facilities are different, and the price of each workstation is around 800-1500 per month.
4. Computer and Network
Once again, I would like to emphasize that you must use a computer and IP that has not applied for an Amazon merchant account.
If you don’t want to pull a network cable alone, you can use a wireless network card (Huawei’s will do) to log in to the backend in the early stage.
Computer cost: 0 (old) – 4k HD (Xiaomi mobile phone, etc.) – 1W or more (iPhone, etc.)
Network port cost: Taking the pink card as an example, 420 yuan per year (800M traffic per day) – 1140 yuan (unlimited traffic)
5. Collection tools (used for Amazon’s fund recovery)
Currently, the popular collection tools for Amazon are the following three types, and the most common one is the third one:
(1) US bank account
Suitable for registered US companies, with higher fees;
(2) Hong Kong bank account
Currently, it is difficult to open a personal bank account. Because a large number of personal accounts are used to receive overseas commercial service bills, Hong Kong financial institutions have strictly controlled and cracked down on domestic personal bank account opening. To open a company account, you must first register a Hong Kong company, which costs several thousand RMB and takes more than one month;
(3) Third-party partners
Mainland companies generally choose Amazon’s third-party partners. For example, Lianlian cross-border payment, etc. It is completely free to register an account, but the handling fee is deducted for payment, the rate is about 1%.
6.UPC/EAN code (used to submit products)
If you want to buy through Taobao, you need to be careful to identify, don’t buy too cheap, it may be converted by the generator, then the product cannot be uploaded, after all, a UPC is only about one yuan.
7. Platform monthly rent
The monthly rent of sites in different countries is slightly different:
United States: Monthly rent 39.99 dollars/month;
Europe: Monthly rent 25 pounds/month;
Japan: Monthly rent 4900 yen/month;
Note: If you have a channel to obtain a reliable business license (have not registered with Amazon), you can save the huge amount of costs for company registration and venue in this section. But you must always pay attention to whether the company is in normal operation.
2. Cost of operating products (floating cost)
1. Trial product purchase
Generally, before selecting a product, more than 3 distributors will be selected to push the trial product, and the trial product purchase cost will be calculated based on your product selection;
2. Product purchase
According to the business plan, the product purchase quantity is determined in stages (the selected manufacturer can be exempted from sample fees) to calculate the product purchase cost.
For example: select a product with a purchase price of RMB 10, select 5 processing plants for the trial product, and specify that the first batch of goods for a processing plant is 80:
Product cost = 10*4+10*80=840 yuan
3. Freight logistics
At this stage, the FBA delivery method is basically the standard configuration of Amazon, which is both mainstream and relatively complex for self-delivery. Therefore, only FBA is expanded in terms of freight logistics.
To sum up, freight logistics includes two stages: one is the first leg of FBA transportation from China, that is, from the factory to the Amazon warehouse; the other is FBA delivery, that is, from the Amazon warehouse to the customer.