New Amazon sellers make an average of nearly $30,000 a year in profits. What does it take to start selling on Amazon and what can new sellers do to ensure they are profitable this year?
49% of new Amazon sellers cite the desire to “be your own boss” as the biggest motivation for using the platform. Additionally, 38% of new sellers are looking for additional income to supplement existing income. Many are also looking for the flexibility to work from anywhere or travel the world, while more than a third want success or a sense of fulfillment.
Whatever the reason for selling on Amazon, it is a major source of income for many people.
So, what are the projected sales on Amazon in 2022?
We will reveal:
How much sales and profits are Amazon sellers making, how long it takes for sellers to start earning profits – and how much time and money they need, whether selling on Amazon will be profitable in 2022, tips for sellers to start making money on Amazon now
Now, on to the data!
1. How much do Amazon sellers make?
While there are many different ways to sell on Amazon , the most common is Amazon's Fulfillment by Amazon ( FBA ) program.
Like any other business, selling on Amazon will involve some fees and charges on the seller's side, but what makes Amazon FBA so appealing is that it simplifies the process for sellers.
Simply put, you choose a product , send it to Amazon's warehouse, set up your Amazon listing, and Amazon does the rest. You start to see sales and profits .
What is the average monthly sales of Amazon sellers?
Most Amazon sellers make at least $1,000 a month in sales, and some super sellers make more than $100,000 a month.
50% of Amazon sellers make $1,000 to $25,000 per month, which could mean $12,000 to $300,000 in annual sales.
13% earn between $25,000 and $250,000 per month, which equates to annual sales between $300,000 and $3,000,000.
22% of sellers have less than $500 in monthly sales, and 3% don’t know their monthly sales.
|monthly sales||% of sellers|
|under $500||twenty two%|
|$1,001 – $5,000||27%|
|$5,001 – $10,000||13%|
|$10,001 – $25,000||10%|
|$25,001 – $50,000||8%|
|$50,001 – $100,000||4%|
|$100,001 – $250,000||1%|
|do not know||3%|
Recently, selling on Amazon has become a viable way to build an e-commerce business , so many Amazon sellers are newbies. But that didn't limit their sales.
Nearly a third (30%) of SMB Amazon sellers have made over $100,000 in lifetime sales:
Under $25,000: 43%
While sales are often an important measure of the health of Amazon's business, they don't paint a complete picture of the money Amazon sellers take home. So let's turn to profit.
What is the profit for Amazon sellers?
The higher the profit margin, the better. Small companies often struggle to be profitable in the first few years, but Amazon SMB sellers are seeing solid profit margins.
Nearly two-thirds of sellers (65%) have profit margins above 10%.
Even better, 32% see profit margins above 20%.
On the other hand, 8% say their business is not yet profitable, and 8% don't know.
|Profit margins for SME sellers||% of sellers|
|Not currently profitable||8%|
|do not know||8%|
While profits vary based on factors such as sales and business expenses throughout the year, sellers weigh in on their total lifetime profits since they started their Amazon business.
How much money do Amazon sellers make over time?
One-fifth of SMB sellers make more than $50,000 in lifetime profits—not bad for a “side business” for many—and 14% make more than $100,000 in lifetime profits.
Below $25,000: 58%
Not yet profitable: 6%
Don't know: 9%
14% of Amazon SMB sellers realize a lifetime profit of over $100,000
For many Amazon sellers, those profits turned quickly.
2. How long does it take to be profitable on Amazon?
Of all respondents, the majority (64%) said they were profitable in their first year of sales.
Profit in 3 months: 21%
Profit in 3-6 months: 24%
Profit from 6 months to 1 year: 19%
Profit in 1-2 years: 11%
Profit over 2 years: 2%
Don't know: 5%
So, how do you start selling on Amazon? We asked sellers how much money and time they invested in getting their business running.
How much money do you need to start selling on Amazon?
One of the biggest barriers for people to start selling on Amazon is thinking it will cost them too much money. As with many things, what you put in affects what you get. But that doesn't have to mean cash — it could mean time, the data necessary to inform your decisions, or just the willingness to succeed.
In fact, nearly a third (32%) of Amazon sellers spend less than $1,000 to start a business. Overall, the majority of sellers (69%) spend less than $5,000 to start selling on Amazon.
Sellers spend less than $500: 17%
Over $10,000: 13%
Don't know: 2%
What is the money used for? Typically, the initial cost includes sourcing your product (including samples), Amazon fees, and promotions. (Read more about the cost of selling on Amazon here .)
And where did the money come from? The vast majority of sellers (82%) are self-helpers who fund their entrepreneurial activities with their own cash. A small percentage of sellers (22%) borrow money from banks, households or other lenders.
How long does it take to start selling on Amazon?
Overall, Amazon sellers do not need to spend a lot of time on Amazon business. Most (64%) spend less than 20 hours per week.
Less than 4 hours per week: 16%
4-10 hours: 28%
11-20 hours: 20%
21-30 hours: 13%
31-40 hours: 12%
41-50 hours: 6%
51-60 hours: 3%
Over 60 hours: 4%
More than three-quarters (78%) of sellers were also able to do business within 6 months.
In fact, you may spend more time getting your business off the ground in the early stages ; many sellers just maintain their business and let the revenue roll in after they find something to sell and create their own niche.
3. Will selling on Amazon be profitable in 2022?
Almost all sellers (90%) plan to continue selling on Amazon in 2022, and 82% are optimistic that selling on Amazon will be a viable way to make money online in the future, up from 63% last year.
Amazon is an industry in its own right, and it has irreversible ties to many other industries, so the opportunity for sellers to find a lucrative niche to sell in is huge.
While 8% of SMB sellers are not yet profitable, the majority of sellers have taken Amazon's big bucks home — or used it to further invest in their business:
Amazon sellers with less than 10% profit margin: 19%
Profit margin 11-20%: 33%
Profit margin 21-50%: 29%
Profit margin 50+%: 3%
What does this mean in US dollars? Let's just say it's enough to be considered more than just "side hustle making money".
The average monthly sales* for SMB sellers is $11,671, or $140,052 per year.
Taking into account the average profit margin for SMB sellers of 21%, new sellers average $2,451 per month or $29,412 in annual profit.
And for the 29% of sellers with profit margins of 21% or higher, their monthly profits could be in the five figures or more.
New Amazon sellers make an average of nearly $30,000 a year in profit.
A handful of new sellers are blessed with incredibly high sales — over $250,000 a month — and $3 million a year. While these "super sellers" are outliers from the average seller, they are certainly aspirational.
* Weighted average calculated based on reported range midpoint sales and capped at the high end of the range ($250,000) to prevent arbitrary forecasting.
4. The takeaways for successful Amazon sellers in 2022
Countless people have tried selling on Amazon. So, what can you learn from those who have been clearly successful? Here are the most important points:
A huge victory in a short period of time.
More than half of sellers (55%) launched their business on Amazon within 3 months.
44% of sellers spend 10 hours or less per week working on their Amazon business.
What Amazon sellers say:
"Jump in now. Perfection is the enemy of profit."
"I wish I knew how important it is to start early. The barriers to rapid development seem to be getting higher and higher over time."
"I wish I knew where to start and where to get good information."
Put in the effort – it will pay off.
60% of sellers feel that selling on Amazon takes some effort and is not a "get rich quick strategy."
Most sellers are still growing their Amazon business, and 45% plan to add new products in the coming year.
What Amazon sellers say:
"I need to spend more time doing product research."
"[You] need time."
"More and more analytics."
Find the right resources and tools
Sellers say the main factor behind their successful selling on Amazon is having the time to devote to their business and having the necessary tools and information to help them.
What Amazon sellers say:
"I wish I knew the right way to start without burning a lot of money."
"I wish I knew about product research to find the ideal product."
"I wish I knew the tools to sell on Amazon."
"I wish I knew which metrics were most in need of tracking."
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