I tried Amazon FBA and lost money. Should I quit?
I started Amazon FBA 8 months ago. I've invested $8K on inventory and ads and I've only made $2K in sales. My margins are terrible because of fees and shipping costs. Everyone on YouTube makes it look so easy. Should I cut my losses or keep going?
1 Answer(s)
First, you're not alone. Most Amazon FBA sellers lose money in the first 6-12 months. The YouTube gurus show their wins, not their $50K losses. Before you quit, let's diagnose what's actually wrong.
Calculate your true cost per unit: product cost + Amazon referral fee (15%) + FBA fee + shipping to Amazon + advertising cost per sale. If your selling price minus all that is less than $3-5 profit per unit, you're on a treadmill.
The most common mistake is choosing the wrong product. If you're selling in a saturated category like phone cases or basic t-shirts, you're competing with 10,000 other sellers who can undercut you. You need a product with $15+ profit margin, low competition, and room to differentiate.
My advice: don't quit yet, but stop spending on new inventory. Sell through what you have, analyze which products (if any) are profitable, and double down on those. If nothing is profitable after 12 months total, then yes — cut your losses and take the lessons. The $8K is tuition, not a failure.