(Note, I'm speaking from some experience here, but it's total amateur-hour experience. I wrote a system for tracking and selling books via half.com and later amazon.com, back when half.com was a thing. At one point I had well over ten thousand books in my inventory to 'test' the program. hah. It actually wasn't so bad; there just isn't any money in it. I might go back to it if I retire; it was fun to have all those books around. I've also worked around several junk dealers, who used the 'have employees who know where shit is' method, and my SO has written an inventory system for our personal stuff, which works, except that barcoding and describing all our stuff is a... daunting amount of work.)
eh, shipping in a timely manner, yeah, if you don't have enough work for a full-time person, you probably wanna outsource. It's a pain in the ass to make a trip to the post office for what amounts to five bucks in profit.
But the cost of warehousing? I think is actually pretty low. Even here in silicon valley you can still get santa clara warehouse space for around a buck a squarefoot/month, in thousand-dollar increments.
Even here, you can get folks capable of operating a simple label printer and mailing stuff out for something like $12-$15/hr, if you have more than 20 hours a week. Especially if you only have a few SKUs, I think it's pretty simple.
now, if you have a thousand SKUs, either you need people who know your inventory really well, and you will be in serious pain when anyone quits... /or/ you need a very good computer system for handling what is where... and setting that up and maintaining all your SKUs is skilled labor. On top of that, the computer system is only as good as the employees scanning the items and locations (or putting the items in the right location; but I personally think the approach of barcoded bins and barcoded items is right; the user barcodes the item, then barcodes the bin, then puts the item in the bin. )
But /that/ is a whole lot more work than it looks like. So yeah; For a few SKUs? a couple grand a month, even in a very high cost of living area and without using your garage, and you can move a lot of product. For many SKUs? yeah. that's where your trouble starts.
I really think that once you have enough work to keep a kid busy mostly-full time, your costs are probably going to be lower doing it yourself.
On the other hand, you do have a good point about the consumer trust of amazon; For me, buying something through amazon (something sold by amazon, not something sold /through/ amazon; that's completely different.) is very easy; very little friction, and I know it will get here the next day. I'll pay a few bucks extra to get a thing from amazon vs. somewhere I've never bought from. (My /feeling/ - and I don't have anything to back this up, is that amazon is picking up on this, and their prices are slowly floating up vs. everyone else.)