We’re often asked whether starting an Amazon business is still a good way to build an online income.
Our honest answer is that it can be, but it isn’t where we’d suggest most beginners start.
We eventually generated more than $100,000 a month in sales from one product. From the outside, that sounds like a wonderful success story, and in many ways it was. What that number doesn’t show is the close to a decade of online experience behind it, more than $100,000 in upfront costs, and the constant attention the business required.
It was far from passive, and it certainly wasn’t beginner-friendly.
We’re not sharing this to suggest Amazon can’t work. It can provide extraordinary reach and the infrastructure to sell physical products at scale. We simply believe people should understand the whole model before committing their money to stock, freight, advertising and fees.
Amazon can be a powerful sales channel, but it’s still a complex product business built on someone else’s platform. The opportunity is real, and so are the costs and risks.
Why Amazon looks so appealing
The model is easy to understand. Find a product, have it manufactured or sourced, list it on Amazon and let the platform help with sales and fulfilment.
Amazon already has traffic, customer trust and an enormous logistics network. That removes some of the barriers involved in building an ecommerce business from scratch.
What it doesn’t remove is the need to choose the right product, protect your cash flow, manage suppliers, meet compliance requirements, compete for visibility and operate within Amazon’s rules.
Those are the parts that can turn a straightforward-looking opportunity into a demanding business.
Our experience: reaching $100,000 a month
Our product eventually reached more than $100,000 a month in sales, but it didn’t happen quickly and sales aren’t the same as profit.
Before we reached that point, we invested heavily in product development, stock, shipping, advertising, professional advice and the many other costs that sit behind an Amazon listing. Inventory had to be paid for well before the income arrived, and more money was often needed for the next order while the existing stock was still selling.
There were genuinely rewarding parts of the experience. We created a real product, developed a brand and reached customers in a market much larger than we could have accessed on our own.
There were also days when a poor review, a freight delay, a sudden increase in advertising costs or a platform issue could affect months of planning.
That’s why we’d never describe Amazon FBA as easy, passive or low-risk.
The problems beginners aren’t always shown
1. The upfront costs can be substantial
You may need to pay for samples, product development, packaging, inspections, trademarks, freight, duties, insurance, software, advertising and professional advice before you know whether the product will sell consistently.
A small test order can reduce risk, but it may also increase the cost of each unit. Larger orders can improve the unit price while tying up more of your cash.
2. Freight can change the numbers quickly
International freight prices and timeframes can shift. A product that looks profitable using one shipping quote may be far less attractive when freight, duties, storage and handling are included.
Calculate the full landed cost, not simply the supplier’s price.
3. Tariff and trade wars can change the numbers after you commit
Recent tariff disputes have been a sharp reminder that sellers don’t control the trade policies affecting their products. New or increased tariffs can change import costs, disrupt established supply chains or make a product less competitive after stock has already been ordered.
A seller may have researched demand, negotiated a good supplier price and calculated a workable margin, only to have government decisions in another country alter the figures. You can’t predict every change, but you can avoid building a model that only works when freight, duties and tariffs remain perfectly stable.
4. Reviews can make or break early momentum
One poor review can have an outsized effect on a new product with very little review history. Some criticism will be legitimate and useful. Other feedback may feel unfair or impossible to resolve.
Either way, you need enough margin, customer support and resilience to manage it.
5. Intellectual property needs proper attention
A product that looks like a simple variation of something already selling can still involve trademarks, patents, design rights or other intellectual-property questions. Never assume a supplier’s reassurance is enough.
Professional advice can be expensive, but getting this wrong can cost much more.
6. Advertising may cost more than expected
A new listing doesn’t automatically appear in front of the right buyers. Advertising may be necessary to generate initial visibility, and you may spend more than you make while testing keywords, images, pricing and conversion.
Advertising costs need to be included when you calculate the real margin.
7. You don’t control the platform
Amazon controls account access, listing requirements, customer communication and many parts of the buying experience. A complaint, policy issue or listing suspension can interrupt your sales while it’s investigated.
Keep careful records and don’t build a plan that assumes platform access can never change.
8. The customer relationship belongs largely to Amazon
You can build recognition for your product and brand, but your ability to communicate with Amazon customers is limited and governed by Amazon’s policies.
This is very different from owning a website, email list or community where people have chosen to connect with your business directly.
9. Returns can be costly
Returned products may be damaged, opened or no longer suitable for resale. Depending on the fulfilment arrangement, you may also face return, storage, removal or disposal costs.
Allow for returns in your figures rather than treating every sale as permanent income.
The profitability challenge
Your supplier price is only the beginning. A realistic calculation may include:
- Amazon selling, referral and fulfilment fees
- Manufacturing or wholesale costs
- Samples and quality inspections
- Packaging and labelling
- Freight, duties, tax and insurance
- Storage and long-term storage costs
- Advertising and promotions
- Returns, damaged stock and disposal
- Photography, video and listing content
- Software and professional advice
Amazon Australia publishes its current charges on the official seller pricing page. Fees and programme terms change, so always work from current figures rather than numbers quoted in an older course or article.
Run a conservative scenario as well as your preferred one. What happens if the product sells more slowly, advertising is more expensive, freight rises or part of the stock can’t be sold?
Research tools can help, but they can’t make the decision
Product-research software can help you understand demand, competition, keywords and pricing. It can be a valuable starting point, particularly when you’re comparing several ideas.
It can’t tell you whether a supplier will maintain quality, whether a competitor will reduce their price or how customers will respond to your particular product. It also can’t replace legal, tax, customs or compliance advice.
Use research tools to challenge an idea, not to convince yourself that the opportunity is guaranteed.
Questions to answer before ordering stock
Can I verify the real margin?
Use current fees and realistic assumptions for advertising, returns, freight and storage.
Can I assess and improve the product?
Understand the customer need, product quality, compliance requirements and genuine point of difference.
Can I fund the inventory cycle?
Allow for supplier deposits, slow sales, delays and the next order without relying on perfect timing.
Am I prepared for the ongoing work?
Amazon businesses still need supplier management, listings, advertising, customer support and reporting.
Does the model suit the way I want to work?
Make sure you’re choosing a physical-product business because it fits you, not simply because the sales figures look impressive.
Our final word
Amazon can become a substantial business. We know that because we’ve done it.
We also know how much money, time, experience and persistence can sit behind the headline sales number.
If you’re determined to pursue Amazon, invest in proper education, do the research and start with figures you can afford to be wrong about. Don’t place a large order because a software tool or training presentation made the opportunity look certain.
If you’re new to online business and mainly want to create more flexibility or build an asset of your own, compare Amazon with options that don’t require physical inventory or international logistics. A service, digital resource, newsletter, content website or directory may be a more manageable first step.
None of those models is effortless. The important thing is choosing one whose risks, costs and daily work genuinely suit you.