By: Nick Varterian | September 5, 2022
September 5, 2022
Retail mobile commerce sales in the US are expected to reach $710 billion by 2025, and Amazon is at the forefront of this industry. That means sellers have the potential to increase their earnings as an Amazon seller.
So, how much do Amazon sellers make? Below, we’ve highlighted the average earnings of Amazon sellers and factors that influence how much you can make as a seller on the platform.
How Much Do Amazon Sellers Make?
A JungleScout survey revealed that most sellers earn at least $1,000 in sales per month. Meanwhile, sellers with a larger audience can make up to $100,000 or more every month.
Quite interestingly, even new Amazon sellers can expect to make good money. In fact, new Amazon sellers earn up to $30,000 per year on average.
The survey also showed the following about monthly sales:
- 22% of the sellers make under $500.
- 13% make $500 to $1000.
- 27% make $1000 to $5000.
- 10% make $10,000 to $25,000.
Only 1% of sellers earn $100,001 – $250,000 per month. However, that’s still a significant number of people.
How Much Profit Do Amazon Sellers Make?
A seller’s profit depends on product margins, overhead costs, and Amazon fees. For example, if you’re selling a product that has a 50% profit margin and you’re making $5,000 in sales per month, your profit would be $2,500.
The JungleScount survey found that 8% of the businesses on Amazon were not making any profit. Meanwhile, 32% were making a profit of over 20%, while 65% were profiting more than 10%.
The numbers show that new businesses have a hard time making a profit on Amazon. But once they get the hang of things, they can start making good money.
Nearly 3% of Amazon sellers make a profit between 51-100%. These businesses are well-established and know how to optimize their operations.
Lifetime Profits
Lifetime profits are the total amount of money you’ve made from your Amazon business since you started selling. Nearly 20% of small and medium businesses on Amazon have a lifetime profit of $50,000.
Meanwhile, 14% of SMBs have a lifetime profit of $100,00 or more. That’s pretty impressive, considering that most of these businesses are run by just one person.
| Lifetime Profit | Percentage of Sellers |
|---|---|
| Under $25,000 | 58% |
| $25,000-50,000 | 7% |
| $50,001-100,000 | 7% |
| $100,001-500,000 | 9% |
| $500,001-1,000,000 | 3% |
| $1,000,001-5,000,000 | 1% |
| $5,000,000-10,000,000 | 1% |
Meanwhile, 9% of the sellers said they did not know their lifetime profit. 6% weren’t profitable yet.
How Much Time Do Amazon Sellers Spend On Their Business?
Most Amazon sellers don’t have to spend much time on their business. 64% of sellers spend less than 20 hours a week running their stores.
| Time Spent | Percentage of Sellers |
|---|---|
| Less than 4 hours | 16% |
| 4 to 10 hours | 28% |
| 11 to 20 hours | 20% |
| 12 to 30 hours | 13% |
| 31 to 40 hours | 12% |
| 41 to 50 hours | 6% |
| 51 to 60 hours | 3% |
| Over 60 hours | 4% |
How Long Does It Take to Launch a Business on Amazon?
In this case, launching a business means earning profit. More than half of the sellers (64%) were able to earn a profit in the first year of business.
Meanwhile, only 2% took over two years to be profitable while 21% earned a profit in the first three months. Likewise, 24% of the sellers were profitable in the first three to six months of their business.
What Is the Cost of Launching an Amazon Business?
You don’t have to spend thousands of dollars on advertising to be successful on Amazon. In fact, many Amazon businesses are started with little to no money at all.
The key is to find low-cost or no-cost ways to get your product in front of potential customers. 17% of sellers spent under $500 to start their online Amazon store.
Meanwhile, 32% spend under $1000. Only 13% of the sellers spent more than $10,000 on their initial Amazon launch.
The initial costs of getting started on Amazon selling include fees for registering as a seller, buying product inventory, and advertising. There are also some other ancillary costs to be aware of, such as the costs of shipping products to Amazon’s warehouses and using third-party fulfillment services.
Most sellers use their savings to finance their initial inventory, although some will take out loans or use credit cards.
How Many Sellers Use Amazon FBA?
Amazon FBA (Fulfillment by Amazon) is a service that allows businesses to store their products in Amazon’s warehouses and ship them directly to customers.
It’s a popular fulfillment option for businesses selling on Amazon because it’s convenient and hands-off. But how many sellers are using Amazon FBA?
In 2020, 57% of the sellers were using FBA. The number rose to $68% by 2022. Meanwhile, 21% of the sellers say they combine FBA with personal order handling, storage, and shipping.
Amazon’s recent report showed that almost two million small and mid-sized businesses operate on the platform.
Considering that, 68% means that around 1.3 million businesses use Amazon FBA. Businesses often turn to Amazon FBA when they’re ready to scale their operation since it can save time and resources.
For businesses that are just starting, Amazon FBA might not be the best option since there’s a cost associated with using the service. However, it’s important to consider all your fulfillment options before you make a decision.
However, if there’s one thing businesses of any size can use, it’s automation. By automating your Amazon FBA inventory and storefront, you can save time and money while keeping your operation running smoothly.
While you sit back and relax, Elite Automation ensures you earn a passive income. Besides setting up your inventory, we also manage your customer service, logistics, packing and prepping, listings, and sales.
With time and our effort, your store will soon be earning a 15% to 25% profit margin without you having to lift a finger. Schedule a call today to learn more.
Final Words
With the increasing interest in Amazon FBA and sellers generating high revenue, it’s no surprise that Amazon will continue to be profitable for most SMBs.
In fact, 90% of the sellers plan to keep using the platform, while 82% said that selling on Amazon is a viable source of income through online means.
Again, it’s nothing surprising, considering Amazon is taking over the ecommerce industry, with a market share of 37.8%. The second leading retail e-commerce company is Walmart, with a 6.3% share of sales, which is much behind Amazon’s. So, Amazon sellers don’t have to worry about any other platforms taking over Amazon soon.
Related posts
