Ever wonder How Much Do Amazon Sellers Make?
Well, a survey says that 40% of the Amazon sellers consider that Amazon is giving them a chance to be their own boss. And 35% of the sellers are generating extra revenues to increase their existing income.
However, 20% of the new sellers (small businesses) failed within the first year of starting their businesses. There are several reasons that are dragging their business. Lack of funds, poor service, cost issues, and poor product offering are some of the main reasons for failure.
Despite all these failures, Small businesses thrive within the US, and they also contribute to the job growth of their country. Overall, all of them want to build a successful e-commerce store.
In this post, I will discuss the statistics of the revenue Amazon sellers are generating. I have also included a few key factors that a new seller can follow to create a successful online business.
So, Let’s Get Started with How Much Do Amazon Sellers Make.
How much do Amazon Sellers make?
There are several ways to sell on Amazon. But the most common is Amazon FBA (Fulfillment by Amazon).
If you use the Amazon FBA program, Amazon will include some charges for selling on their platform. But that’s why Amazon FBA is so appealing that it simplifies the selling process for the sellers.
All you have to do is choose a product and get it to Amazon warehouses after setting up the listing, and Amazon will take care of the rest.
Average Monthly Sales of Amazon Sellers
Nearly half of the Amazon sellers make $1,000 to $25,000 in a month. And few best-sellers make more than $250K in a month, generating an insane amount of $3 million each year.
Only 25% of the Amazon sellers make under $1,000 in a month in which some are failed businesses. Most sellers are new, but that doesn’t mean they limit their monthly sales.
Over 40% of the Amazon sellers have reached the milestone of over $100,000 in their lifetime sales. Here is the breakdown of the lifetime sales of those sellers.
- $100K to $500K – 15%
- $500K to $1M – 8%
- $1M to $5M – 8%
- $5M to $10M – 4%
- $10M to $50M – 3%
- More than $50M – only 2%
Sale is a measurement that represents how successful an Amazon business is. But they don’t show the complete picture of how much profit sellers made. So, let’s move to the profits.
How do Amazon Sellers make a profit? – How Much Do Amazon Sellers Make
If a seller’s profit margin is high, they have better chances to make more profit. But small businesses often struggle to set a better profit margin in the first few years.
Two-thirds of Amazon sellers have a profit margin of over 10%, while the rest either have less than 10% or are not currently profitable. Here is the breakdown of this list.
|Profit Margin||Number of Sellers (in %)|
The stats change every year since the number of sellers increases, and some rapidly increase their profit margin.
Talking about the lifetime profit, only 60% of the sellers made profits of more than $25,000 in their lifetime. And 40% of the sellers’ lifetime profits are under $25,000. Only 6% became millionaires after starting their business on Amazon.
How long does it take to start making a profit on Amazon?
According to the survey, the majority (more than 60%) of the sellers considered that they started making profits in their first year. Most of them became profitable within the first six months of selling. Here is the breakdown of the sellers and the time taken before making profits.
- Under 3 months – 17%
- 3 to 6 months – 20%
- 6 months to 1 year – 23%
- 1 to 2 years – 16%
- More than 2 years – 4%
The numbers are based on running businesses on Amazon currently.
How much investment do you need to start selling on Amazon?
Many people fear starting a business on Amazon because they think it will take too much investment money. Even if they have the investment money, the fees and charges might scare them to take the right step.
It is not always about the money – the odds of success and how much time to become profitable also make them worry. But the survey says that 28% of the successful Amazon sellers started their business for under $1,000.
You don’t necessarily have to spend a lot of money to start selling on Amazon. The initial costs include Amazon fees, sourcing your products & sample, and promotion cost. It takes a simple little unit to test selling on the platform.
There is no limitation for sending inventory. However, sending small inventory, again and again, can increase your shipping cost. And that can become the main reason for your reduced profitability.
Talking about the time, most Amazon sellers don’t have to spend a lot of time taking care of the business because they use the Amazon FBA program. However, Amazon FBM sellers (Fulfillment by Merchant) have to spend way more time since they are handling the complete shipping process. They might save the service charges, but they have to use their resources to ship the products directly to buyers.
How Much Do Amazon Sellers Make in 2023?
The overall statistics show that selling on Amazon is still profitable in 2023. The new sellers (who have experience of 1-2 years) are getting monthly sales of over $20K. This directly indicates that Amazon can be a decent way to earn money online.
Only a few of the new Amazon sellers are lucky enough to generate an insane amount of monthly sales, as in $250,000 or over. If you have enough resources and have done the research, you can start your ecommerce store on Amazon right now.
Tips to Become a Successful Amazon Seller
Keep in mind that even if Amazon makes the selling process easy, you still have to do a lot of work to become a successful seller. In order to make decent money, you can use some tips.
1. Pick the Right Niche
If you are running an ecommerce store, you must know the products in which buyers are actually interested. That’s why you have to go with the trend. Even if you have the proper inventory, you must list your products in the right niche. Otherwise, the shoppers won’t be able to reach your products. So take your time in research and choose the right category for your products.
2. Be a Dynamic Marketer
Amazon is not a brick-and-mortar business where people come automatically by the look of their appearance. Similarly, you can’t just list your products on Amazon and hope for the audience to stumble across them. You must expand your business through marketing. There are several ways: email, marketing, social media marketing, or running PPC campaigns.
3. Know Your Competition
Amazon has the biggest number of sellers in the world. So, you can imagine the ongoing competition between the sellers. If you are doing the market research properly, you can outrank your competitors within no time. For that, you can use online tools to spy on your competitors, their products, prices, and tags.
4. Maximize Profits
In this modern era, you can’t be just a minimum guy. Let’s suppose you are a successful Amazon seller in your marketplace and making a decent amount of money. But you are just limited to one marketplace. Amazon Global Selling services offer access to 18 international marketplaces. You can maximize your profits by expanding your business to other marketplaces.
Factors That Impact How Much Amazon Sellers Make?
How much you can make depends on various factor, which includes the following points.
- The profit parameter between retail cost and wholesale
- Target the market according to your budget
- How powerful your marketing and branding is
- The popularity and demand of the product that you want to sell
- How hard is it to get a grasp on your product
- Best Amazon Seller Tools
- Best Amazon Keyword Research Tools
- Profitable Amazon Products You Can Sell Without Approval in 2023
- Learn About The Top-Rated Amazon Review Checkers In 2023 For Accurate Product Evaluations.
- Best Amazon FBA Podcasts
- Amazon Listing Optimization: Unlock Success with the Supreme Sellers Guide
- Top Amazon Categories for Sellers
Conclusion: How Much Do Amazon Sellers Make (2023)
Selling on Amazon is still a golden opportunity in 2023. Even a new seller with minimum experience can easily make up to 6 figures. You have to find the right product for the right audience.
I hope these stats will give you a clear image of How Much Do Amazon Sellers Make. You can use this data to make better strategies before launching your store on Amazon.
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