You know what?
Selling goods online has never been easier than it is today. But the question is, is it lucrative?
These days there are several different selling platforms to choose from, but chances are, if you’ve landed on our site, you’re probably already leaning towards Amazon. And rightly so.
Financial Benefits Of Selling Online
To sell goods online is far cheaper than to run an actual store. Sure you have to pay a little money in the way of fees, but you don’t have to pay any rent, which would be considerably more expensive, or any of the other costs associated with running a physical store.
Amazon FBA Vs Other Online Retail Platforms
Ebay
Ebay for example is hands down a buyers market, where consumers get away with paying severely cut down prices, leaving buyers with negligible profit margins. And the last thing you’d want is to have to sell below the listing price.
Etsy
And as for Etsy, that’s seen as being only for handmade goods, which is no good to you if that’s not the type of product you want to sell.
Facebook Stores
Despite just how many people use Facebook the world over, people are still yet to come to trust Facebook sellers…
Anyone can get their pages and their ads onto the platform, and as a result of this scammers have taken advantage of the situation.
Consequently, people have learned not to trust Facebook, making it not such a good platform for your business.
Your Own Website
And as for setting up on your own with your own website, whether it’s Shopify, or WordPress, or any of the others, you’d face a big challenge ahead of you before you even launch. And I’m not just talking about the construction of the website and your company logo…
It takes a lot of work to really get your name out there and get people to even visit your website, let alone make a purchase, or provide repeat buying.
Amazon FBA
Amazon, in contrast to all the other main alternatives, is a much better platform for most online retail businesses. Customers have been buying from Amazon for decades now since its founding in the 1990s.
In fact, we’d go so far as to say it’s THE go-to shop for a huge customer base the world over. It has proved to be a lifeline for those people who can’t get out to supermarkets or obscure niche stores.
People have learned to trust Amazon, and that’s why it’s such a great platform to sell your goods. People will readily buy from you, believing that your product/s is/are the real deal. And they have trust in Amazon that they won’t get scammed.
How Much Money Can Amazon FBA Sellers Make?
If you’ve been looking into this already, you may have heard some wonderful stories about how someone from out of nowhere suddenly started making 6 figure sums by selling on Amazon. (And if you haven’t, where have you been?)
And it’s true there are some Amazon super-sellers out there that make upwards of $250,000 every month in sales. And it’s super tempting to believe that one day, that could be you.
But, let’s be real. Such success does not happen overnight, it takes a lot of hard work and dedication. But it can be done. And as it’s been said many times before, it’s better to have tried and failed, than to never try at all.
As with any new business venture, it’s often best to start off gradually. And if you don’t have a lot of capital behind you, you may have no choice but to start small.
And even if you have more modest aims about how much money you want to make, you can expect to put in a lot of work before the business even gets off the ground.
And you ought to accept that your ideal income may not come as quickly as you like, but with some perseverance you could potentially get some great results.
How Much Does The Average Person Make Selling On Amazon FBA?
So, we’ve covered how much the super-sellers make on Amazon, but how about the average Jo?
Jungle Scout carried out a survey last year, and found that “Nearly half (44%) of Amazon sellers make between $1,000 and $25,000/month, which could mean annual sales from $12,000-$300,000.”
And that sounds quite promising – surely $300,000 in sales means a big slice of profit right?
Well, not necessarily. Only 3% of those surveyed achieved profit margins of 51% or more, and 8% said that they weren’t currently profitable.
How Much Do New Sellers Make Selling On Amazon FBA?
According to the same survey by Jungle Scout, new Amazon sellers, who have only been selling for 1 to 2 years, earn an average of $42,000 in annual profits.
Technically, this is less than the average annual average wage in the US, which is $51,916.27 according to policyadvice.net. Yet it’s above the median annual wage in the US, which falls at $34,248.45.
So, it’s safe to consider the income as quite reasonable, and is more than enough for at least one person to live off, if not enough for their entire family.
And more importantly, this is very encouraging. It demonstrates that you may not have to wait too long to start making enough product to live off. Indeed, it means that it doesn’t need to be a mere side hustle, and could easily become your family’s main source of income.
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Though figures vary massively, the average Amazon FBA seller earns anywhere from $1,000 to an astonishing $25,000 a month. We must make you aware that this is total sales and doesn’t refer to how much profit the sellers took out of these figures.
It is also worth noting that the impressive $25,000 figure is in relation to well-established, highly successful FBA businesses. Typically, a new FBA seller in their first year of operation could earn an average of approximately $42,000.
We know these figures as a result of The State Of The Amazon Seller 2021 report.
When it comes to breaking down the figures more, we can see in more detail just how many businesses are making fantastic profits.
The study revealed that almost 50% of FBA sellers earned $1,000 to $25,000 a month in 2021. The minority of Amazon FBA sellers made an incredible $25,000 – $250,000 a month. This minority made up 20% of sellers.
Unbelievably, there is a small group of sellers who even made more than $250,000 a month. This group made up 6% of the total study population.
How Much Profit Is Made?
In terms of profit, the same 2021 report indicates that Amazon FBA sellers are doing very nicely. The report shows that the profit margins of most FBA sellers are relatively high. The average profit margin ranges from 10% to an impressive 20%+.
Although it can take time and patience for your FBA business to become profitable, it is more than possible for Amazon sellers to make at least $3,600 a year if they can consistently maintain a profit margin of about 30%, with sales of $1,000 a month.
Even if your business is already well established online, it may take time before you can consider it profitable. For instance, 8% of Amazon FBA businesses still believe they aren’t profitable yet. A further 8% of FBA sellers aren’t sure yet.
How Much Does It Cost To Be An FBA Seller?
There are costs that will impact how much profit you make as an FBA seller with Amazon. Here are some of the fees you need to be aware of:
Inventory storage fees
You will face inventory storage fees for your products stored at Amazon’s warehouses. These will be based on your average daily volume.
Fulfillment Fees
These fees included services like picking, shipping, and handling the orders you receive.
Long-term Storage
Any item held in storage for longer than 1 year will cost you more to keep in storage.
Removal fees
If you need Amazon to remove your products from storage, you will have to pay a removal fee.
Unplanned service fee
If your product arrives at Amazon’s warehouse without the correct preparation, they will charge you for any extra work that needs to be done.
Returns
You will face a fee for any order returned under Amazon’s free returns policy.
Can You Start An FBA Business?
The beauty of Amazon FBA is that anybody can do it as long as they have passion, desire, and a hard work ethic. If you want to start an FBA business to make money fast and easily, you’re in the wrong place.
Yes, FBA selling might be easier than other jobs, but it still takes a lot of hard work and learning.
Luckily, Amazon makes the process of starting a business more accessible. You are not required to put a lot of capital in. Other businesses require a large investment, but with Amazon FBA you don’t have to if you can’t.
In fact, more than 15% of FBA sellers on Amazon started their business by investing less than $500. 80% of sellers invested between $500 and $10,000 to get their business started.
Out of all of these businesses, a whopping 67% of them stated that the business became profitable within their first year of operating.
Mistakes FBA Sellers Make
While a lot of FBA sellers make a profit and run successful businesses, there is a small percentage of businesses that fail. By avoiding the following mistakes you can ensure that your FBA business has the best chance of success.
Not Conducting Enough Market Research
Don’t rush into a decision. Take a well-thought-out approach to every decision you make. Taking time to understand the market before making a decision will ensure you don’t lose any money unnecessarily.
Choosing An Over Saturated Niche
Finding a niche is great, but you should never pick one just because everyone else is. Finding your own niche will give you a better chance of sales and profits.
Not Following The Rules
Amazon has strict rules and regulations. Some businesses have been banned for life as a result of breaking them. You can make sure this isn’t you by familiarizing yourself with every rule.
Thought It Was Too Easy
Plenty of FBA sellers have fallen into the trap that Amazon FBA selling is easily done. This is wrong. You need to put time, effort and money into your business.
Not Learning About The Competition
Always be aware of your competition. If you don’t look at what they’re doing and do it better, they could take your sales, leaving you with a business that makes little money.
Not Taking Any Risks
A business can only be successful if the seller takes risks. By risks, we mean calculated approaches to a target category that could make the business big profits.
What Are The Various Factors That Influence How Much Money Sellers Can Make On Amazon?
How much you make depends on a number of different factors. These include (but aren’t limited to) the following:
- The profit margin between wholesale and retail costs
- How effective your branding and marketing is
- How hard it is to get hold your products
- The popularity of / demand for the products you want to sell
- The budget of your target market
How Our Website Can Boost Your Chances Of Success With Amazon FBA
On our website, we’ve got a whole host of tools that can really help you to make money doing Amazon FBA.
We’ve got links for:
- More than 15 different handy Amazon Chrome extensions for FBA sellers
- The Amazon Virtual Assistant
- Several great PPC management tools
- The best Amazon FBA accounting tools
- Reviews of Helium 10, Jungle Scout, and Viral Launch
- And much more
How To Get Estimates Of Your Predicted Amazon FBA Sales
Once you’ve set yourself up as an Amazon FBA Seller, you can use special tools which will calculate your expected sales for you.
This is perfect for those who are cautious about pinning too much hope for success. And it gives you a clear idea of what to expect in the coming months so you can plan ahead.
Check out our article titled “Best Amazon Sales Estimator for FBA Sellers” available on this link. It features our reviews on 6 different sales estimators.
More and more people are starting to build FBA businesses. Just last year more than 3,700 new FBA sellers joined Amazon FBA in the hope of making decent profits, changing their lives in the process.
That takes the total number of FBA sellers to 1.5 million across the world, but how much money do they make?
The fact you’re here would suggest that you too are interested in knowing the answer to that question. Whether you’re interested in starting your own FBA business or simply want to learn more about this business space, today, we’ll answer this question for you.
In this blog, we will look at how much money the average FBA seller makes and what mistakes they avoid being successful. If this sounds good to you, be sure to stick around.
Wrap Up
So, we can safely say that Amazon FBA is certainly profitable for most sellers, and with the help of this website, you can have an edge over the competition.
Sure it’s unlikely that you’ll make money overnight, but the data is very encouraging. And as the saying goes, “Nothing ventured, nothing gained” and “He who dares, wins”.
