Do you ever wonder how much money Amazon FBA sellers make? Why are so many people discussing Amazon FBA? Why do so many people want to become Amazon sellers?
In this article, we will look at how much Amazon FBA sellers make, their average monthly profits, how long it takes to become profitable, how much money and time you need to start selling on amazon.
How much do Amazon sellers make?
Do you want to know how much Amazon FBA sellers make? Well, it\’s difficult to say, but according to a Jungle Scout survey of 4,864 Amazon sellers, new Amazon sellers make an average of $42,000 per year in profit.
Although there are several ways to sell on Amazon, the most popular is Amazon\’s Fulfillment-by-Amazon (FBA) program. Like any other business, selling on Amazon will involve some expenses and fees on the seller’s part, but what makes Amazon FBA so appealing is that it simplifies that for sellers. Simply put, you select a product, ship it to Amazon\’s warehouses, create an Amazon listing, and Amazon handles the rest. And you begin to see sales and profits.
What are the average monthly sales for Amazon sellers?
Most Amazon sellers make at least $1,000 per month, and some super-sellers make up to $250,000 per month, that\’s around $3 million in annual sales.
- Nearly half (45%) of Amazon sellers earn $1,000-$25,000 per month, implying annual sales of $12,000-$300,000.
- One-fifth (20%) earns $25,000-$250,000 per month, for annual sales of $300,000 to $3,000,000; the remaining 6% earn more than $250,000 per month.
- Only 26% of sellers make under $1,000/month in sales.
|Monthly sales||% of all sellers|
|$1,001 – $5,000||20%|
|$5,001 – $10,000||13%|
|$10,001 – $25,000||12%|
|$25,001 – $50,000||10%|
|$50,001 – $100,000||5%|
|$100,001 – $250,000||5%|
|More than $250,000||6%|
Selling on Amazon only recently became a viable way to build an eCommerce business, so many Amazon sellers have no previous experience whatsoever. However, this has had no effect on their sales.
While sales are frequently a strong indicator of a healthy Amazon business, they do not provide an accurate picture of how much money Amazon sellers earn. So let\’s talk about profits.
How much do Amazon sellers profit?
The higher the profit margin, the better, but small businesses frequently struggle to break even in their first few years. On the contrary, other sellers see relatively high profit margins.
More than two thirds (68%) of sellers have profit margins above 10%. 36% expect profit margins to exceed 20% and the other 8% have businesses that are not yet profitable.
|Profit margin||% of sellers|
|Currently not profitable||8%|
While profit shifts throughout the year based upon factors such as volume of sales and business costs, sellers weigh their total profits since launching their Amazon businesses.
How much money have Amazon sellers made over time?
Almost half of all Amazon sellers earn a lifetime profit higher than $250,000. This is actually not a bad number since most sellers at first start selling on this platform just to gain an extra income, and around 6% of the sellers are now millionaires as a result of their Amazon businesses.
- Lifetime profits under $25,000: 42%
- $25,000-50,000: 10%
- $50,001-100,000: 8%
- $100,001-500,000: 10%
- $500,001-1,000,000: 4%
- $1,000,001-5,000,000: 3%
- $5,000,000-10,000,000: 1%
- More than $10,000,000: 2%
How long does it take to become profitable on Amazon?
According to a Jungle Scout survey, most of the Amazon sellers (64%) declared it took around one year for their business to grow and become profitable.
- Profits earned within three months – 22%
- Within 3 to 6 months – 22%
- Gains within six months to 1 year – 23%
- Profits within 1 to 2 years – 13%
- Profits earned within more than two years – 3%
Sellers with less experience often need more time to obtain the profit, but they manage to do that within a year or two.
How much money do you need to start selling on Amazon?
The idea that it will cost you too much money is one of the biggest obstacles for people starting to sell on Amazon. Like many things, what you put in affects what you get out. But that doesn\’t have to mean cash, this may include the data needed to make an informed decision or the will to succeed.
In reality, more than one-fifth (27%) of the most profitable Amazon sellers invested less than $500, if at all, to start the businesses that they are still running for more than five years.
Overall, most sellers (58%) spent less than $5,000 on Amazon and others (28%), less than $1,000.
- Sellers spent less than $500: 18%
- $500-1,000: 10%
- $1,001-2,500: 12%
- $2,501-5,000: 18%
- $5,001-10,000: 14%
- More than $10,000: 22%
What is the purpose of that money? Initial costs typically include product sourcing (including samples), Amazon fees, and promotions. Surprisingly, you don\’t need a lot of money to be a good Amazon seller, and starting small also leads to greater success.
How much time do you need to start selling on Amazon?
In case you’re ready to start selling on Amazon, but you have a full-time job, you probably asked yourself how much time you need to invest in your business. Amazon sellers don’t spend too much time dealing with their selling business. Most of them spend less than 20 hours per week.
- Fewer than 4 hours per week: 17%
- 4-10 hours: 22%
- 11-20 hours: 21%
- 21-30 hours: 16%
- 31-40 hours: 9%
- 41-50 hours: 7%
- 51-60 hours: 4%
- More than 60 hours: 6%
You\’re more likely to devote more time to get your company off the ground in the early stages but once you find profitable products to sell and establish your niche, you just have to keep the business running and wait for the money to come in.
If you have heard about the speeding e-commerce train and you’re considering jumping on, be ready to invest a lot of your time, effort, and money at first, but it will definitely pay off, and eventually, you won’t need much effort, but your selling business will constantly draw you more profit. We recommend leveraging software solutions like TactLaunch, especially if you’re a newbie in the Amazon selling business. TactLaunch offers excellent solutions for real professionals, and the data that you will gain insight into will be precious for your strategic decision making.