Starting an Amazon FBA (Fulfillment by Amazon) business means you source products, ship them to Amazon’s warehouses, and Amazon handles storage, packing, shipping, and customer service for every order. It’s one of the most accessible ways to build an e-commerce business without managing your own warehouse or logistics. Here’s what it takes to get up and running.
Choose Your Sourcing Model First
Before you create an account or spend a dollar, decide how you’ll source the products you plan to sell. Your sourcing model shapes everything: startup costs, time investment, profit margins, and risk level.
Private label is the most common model for serious FBA sellers. You find a generic product (often from overseas manufacturers), add your own branding and packaging, and list it as your own product on Amazon. This gives you control over pricing and listing content, but it requires upfront investment in product development, branding, photography, and advertising. Most private label sellers spend $2,000 to $5,000 or more on their first product launch, including inventory, packaging design, and initial ad spend.
Wholesale means buying established branded products in bulk from authorized distributors and reselling them on Amazon. You’re competing on existing product listings, so margins tend to be thinner, but you skip the branding and product development work. The main challenge is getting approved by distributors and finding products where the math works after Amazon’s fees.
Retail arbitrage is the lowest-cost entry point. You buy discounted products from retail stores or online clearance sales and resell them on Amazon at a markup. It’s a good way to learn the platform, but it’s hard to scale because your supply is unpredictable.
Register Your Amazon Seller Account
Go to Amazon’s Seller Central registration page and choose between two account types. The Professional plan costs $39.99 per month plus selling fees and gives you access to bulk listing tools, advertising, and the Buy Box. The Individual plan charges no monthly fee but adds $0.99 per item sold, and it locks you out of several tools. If you plan to sell more than 40 items a month, the Professional plan is cheaper.
Amazon’s verification process requires several documents:
- Government-issued ID (passport works best)
- Internationally chargeable credit card
- Bank account and routing number for deposits
- Business license or registration
- Proof of residential address from the last 180 days, such as a bank or credit card statement
- Tax information
You’ll enter your full legal name, citizenship, country of birth, date of birth, and residential address during the identity verification step. Amazon may also schedule a video call to verify your documents. The whole process can take a few days to a couple of weeks.
Set Up Your Business Legally
Most FBA sellers register an LLC to separate personal and business finances. An LLC limits your personal liability if a customer files a claim related to a product you sold. Filing fees vary by state, typically ranging from $35 to $500. You’ll also need an EIN (Employer Identification Number) from the IRS, which is free and takes minutes to get online.
Open a dedicated business bank account and keep all FBA income and expenses separate from personal funds. This makes tax time simpler and protects the liability shield your LLC provides.
Understand Amazon’s Fee Structure
Amazon charges several layers of fees that eat into your margins, so you need to account for all of them when evaluating whether a product is profitable.
Referral fees are a percentage of each sale, typically 8% to 15% depending on the product category. Most categories fall at 15%.
Fulfillment fees are charged per unit when an order ships. The rate depends on the product’s size tier and shipping weight. A small, lightweight item might cost around $3.00 to $4.00 per unit to fulfill, while larger or heavier items cost significantly more. Starting April 17, 2026, Amazon is applying a 3.5% fuel and logistics surcharge on top of fulfillment fees.
Monthly storage fees are charged based on the cubic footage your inventory occupies in Amazon’s warehouses. Rates are higher during the fourth quarter (October through December) when warehouse space is at a premium. If inventory sits unsold for an extended period, you’ll also face aged inventory surcharges.
Amazon provides a Revenue Calculator in Seller Central that lets you plug in a product’s price, cost, and dimensions to estimate your net profit after all fees. Use it before committing to any product.
Find and Validate a Product
Product research is where most FBA businesses succeed or fail. You’re looking for items with steady demand, manageable competition, and enough margin after Amazon’s fees to turn a real profit.
Start by browsing Amazon’s Best Sellers lists to identify categories with consistent sales. Tools like Jungle Scout, Helium 10, or Keepa can estimate monthly sales volume, track price history, and reveal how many competing sellers are on a listing. Look for products where the top listings generate steady revenue but aren’t dominated by major brands that would be difficult to compete against.
A good private label product typically has a sale price between $15 and $50 (high enough to cover fees and leave margin, low enough that customers buy without overthinking), is small and lightweight (keeping fulfillment fees low), and isn’t overly complex (reducing defect rates and returns). Avoid products with safety certifications, electrical components, or dietary supplement regulations unless you’re prepared for the compliance work.
Order samples from two or three manufacturers before committing to a large order. Test quality, packaging durability, and how the product compares to what’s already selling on Amazon.
Prepare and Ship Inventory to Amazon
As of January 2026, Amazon no longer offers prep and labeling services for FBA shipments in the US. That means your products must arrive at Amazon’s fulfillment centers fully labeled, packaged, and ready to ship to customers. You’re responsible for applying FNSKU barcodes (Amazon’s internal tracking labels that link each unit to your seller account), bagging items that need protection, and bundling multi-packs.
You have two options: handle prep yourself or hire a third-party prep center. Prep centers charge per unit (typically $1 to $3) and can save significant time, especially if you’re importing products from overseas and want them inspected and labeled before reaching Amazon.
When creating a shipping plan in Seller Central, Amazon tells you which fulfillment center(s) to send your inventory to. You can ship via small parcel (UPS, FedEx) or palletized freight for larger quantities. Pack boxes carefully and follow Amazon’s weight and dimension guidelines to avoid check-in delays or additional fees at the warehouse.
Create Listings That Convert
Your product listing is your storefront. For private label products, you’ll create a new listing from scratch. For wholesale or arbitrage, you’ll typically add your offer to an existing listing.
Strong private label listings share a few elements. The title should include your primary keyword naturally, along with key product details like size, quantity, or material. Bullet points should focus on benefits rather than just features: don’t just say “stainless steel construction,” explain why that matters to the buyer. Use all available image slots with high-quality photos showing the product from multiple angles, in use, and with infographics highlighting dimensions or key selling points.
Amazon’s A9 search algorithm ranks listings based on relevance and sales velocity. Products that sell well rank higher, which drives more traffic, which drives more sales. This is why your launch strategy matters: running Amazon PPC (pay-per-click) ads from day one helps generate initial sales and reviews that build momentum.
Budget for Advertising Early
Organic visibility on Amazon is largely driven by sales history, so new listings need paid advertising to gain traction. Amazon’s Sponsored Products ads let you bid on keywords so your listing appears in search results. Start with automatic campaigns to discover which search terms drive clicks and conversions, then build manual campaigns targeting your best-performing keywords.
Plan to spend $10 to $30 per day on ads during your first few months. Your advertising cost of sale (ACoS) will likely be high at first, sometimes 30% to 50% of revenue, and that’s normal. The goal early on isn’t immediate profit from ads; it’s building sales rank and review count so your organic traffic grows over time.
Get Liability Insurance When Required
Amazon requires sellers with over $10,000 in monthly sales to carry commercial liability insurance. You need general liability coverage with a minimum of $1 million per occurrence and in aggregate. Your policy must name Amazon and its assignees as additional insureds. Commercial umbrella insurance meeting the same coverage thresholds is also required.
Even below the $10,000 threshold, carrying insurance is worth considering if you’re selling physical products. A single product liability claim could be devastating without coverage. Policies for small FBA sellers typically run $500 to $1,500 per year depending on your product category and sales volume.
Track Your Numbers From Day One
FBA businesses live and die on margins. Track your landed cost (product cost plus shipping to Amazon), Amazon’s fees, advertising spend, and returns rate for every product. Seller Central provides detailed reports, but many sellers use spreadsheets or tools like InventoryLab or Sellerboard to get a clearer picture of true profitability per SKU.
Reorder timing matters too. Running out of stock kills your search ranking, and rebuilding momentum after a stockout can take weeks. Monitor your sell-through rate and place reorders early enough to account for manufacturing and shipping lead times, which can be four to eight weeks for overseas suppliers.