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Is Selling On Amazon Worth It?

Is selling on Amazon Worth It

Many new sellers on Amazon say they chose the platform to earn extra income with greater flexibility.

Interestingly, many users soon discover that the platform can be a primary source and not just a passive source of income. That speaks to the opportunities that abound on Amazon.

Everyone knows the power of Amazon. It’s enormous and has lots of opportunities. But with about two million sellers (and still counting) and many hurdles to cross before the bucks start rolling in, many have asked if selling on Amazon is worth the hype.

Amazon is the largest marketplace in the world. With a presence in over 180 countries, over 300 million active buyers, and being the favored destination for more than 90% of all online shoppers globally, why would anyone not want to get on board?

Also, with affordable access to global customers, a trusted platform, and great resources and tools that can help sellers, can there ever be a downside to selling on Amazon?

New sellers also are always more than welcome. They can set up accounts and get their products listed live in no time. These incentives mean practically everyone would want to sell on Amazon. The more fierce the competition, the tougher for sellers, especially new entrants.

But knowledge, they say, is power. Selling successfully on Amazon requires the entrepreneur to know various procedures. Knowing what you need to know and applying the knowledge adequately can make a difference on Amazon.

For example, Amazon’s third-party seller program, Fulfillment By Amazon (FBA), is designed to help sellers store and package products for shipping.

But the customer relationship in such transactions belongs to Amazon. Some sellers do not like this, but the FBA is the most popular method of selling on Amazon.

So, is selling on Amazon worth it?

Many successful sellers will tell you that it is. Some others may have a different opinion. But the truth is if you have a product that sells well, regardless of which option on Amazon you choose, you’re bound to make a lot of money.

How much do Amazon sellers earn?

How much do Amazon sellers earn

Selling on Amazon is a very productive business, but it has been simplified for the sellers.

For example, on the FBA platform, the sellers only need to pay minimal expenses to keep their goods in Amazon warehouses. Once they set up their listing and customers purchase the product, they only have to sit back and relax while Amazon handles the packaging and shipping.

Depending on how well the product does, sellers can make sales from as little as $1000 to as much as $250,000 per month via simply listing their products and letting Amazon handle the deliveries.

The highest monthly sales range on Amazon is valued at between $1000 and $5,000. About 20% of Amazon sellers make this amount in sales.

This is closely followed by those who make sales below $500, representing 17%. 13% of sellers make a turnover of between $5,000 and $10,000, while 12% make sales between $10,000 and $25,000 monthly.

The highest selling category on Amazon (above $250,000 monthly) is shared by 6% of the sellers, while 5% make a turnover of between $50,000 and $100,000; the same number for sales of between $100,000 and $250,000.

The primary factor responsible for how much a seller earns is how quickly the product sells, which is also related to how easy it is for customers to find the product when they search online with specific keywords.

Some tools can help sellers rank better in Amazon searches, and super sellers are known to maximize the ranking of their product pages through these tools.

The more a product sells, the more the seller earns. About four out of every ten Amazon sellers have made a profit of $25,000 since they started selling, while one out of every ten has made between $100,000-$500,000 in profit on the platform.

Of course, many millionaires have been made via selling on Amazon. Close to 7% of sellers on Amazon have completed at least a million dollars in profit, and 2% of sellers have made well over $10 million in lifetime profits!

Every month, only 3% of Amazon sellers make a profit as high as 50-100%, while 6% of sellers make below 6% in profit.19% of earners make a profit of between 26-50% monthly.

Another 19% make a profit of between 16-20%. 14% of sellers earn between 21% and 25% in profit, while 13% of Amazon sellers make 11-15% profit monthly. About one in ten sellers make a profit margin between 6 and 10%. 

Further reading: How much does Amazon FBA cost?

Top Earners

Young Couple of Amazon Sellers

As evident from above, so many people make a lot of money monthly on the Amazon platform. The platform attracts more than half of all online searches.

One way you can know the top earners on Amazon is to see the volume of feedback they get. With feedback to sales ratio hovering between 1:5 and 1:10, the more feedback a brand receives, the more sales the product makes.

Using these metrics, the top brands on Amazon include

  • Medimops
  • Cloudtail India
  • Music Magpie
  • World of Books
  • Amazon Warehouse, and
  • Pharmapacks

Realistic Expectations

If you want to sell on Amazon, you need to be realistic with your expectations.

You’re not probably going to waltz your way through two million existing sellers to start making $250,000 monthly sales in six months. You’ll need to put in the work.

Thankfully, several tools are designed to get you ahead of the competition faster. Investing in them would not be a bad idea.

Also, realize that you may be easily disappointed if you do not have another source of income. Because you’ll need to spend some money, you need another source of income to support the business in the early stages.

Most of the top earners in Amazon started selling as a part-time hustle. But with time, they were able to build a brand that attracted tons of buyers.

Also, try to look for niches with low competition but higher turnovers. Some tools can help you find this easily. You should invest in SEO and keywords research.

All of this may be tasking initially, but if you put in the hard work and are not discouraged, you’re bound to break through sooner than later.

Is it too late to start your Amazon store?

Amazon app and webpage

You might think you’re late to the party with two million sellers already.

However, it’s not when you arrive that matters; it is the impact you make. If you make your findings accurately, invest in the right tools, and work hard to distinguish your brand, you’ll find that there’s still a space for you at the top.

It is not too late, as there are still many buyers. It’s simply about making your presence felt and offering your sales.

Borrowing from a popular phrase, the best time to have started your Amazon store was ten years ago. The second best time is now!

How long till the results?

There’s no timeline for getting results. It may be short. It may belong.

But statistics show that new sellers also make money. The good news is that precious experience is gained in those first few months.

Over time, you become better. After twelve months of sales, you should have made progress. You can compare with your competitors to know how well you’re faring.

If you are consistently doing worse than others, you may need to change.

Amazon Alternatives

girl started selling on Amazon

There are many reasons why buyers may want an alternative to Amazon.

One may be its size- Amazon is so huge you may spend hours surfing through tons and tons of products when all you want are “women’s shoes.”

But for sellers, does seeking an alternative to Amazon make business sense? And, are you guaranteed to make as much money on other platforms?

The answer is yes. As long as the platform meets two essential requirements

  • Huge market
  • Less competition

Obviously, with Amazon being the behemoth in this field, no marketplace is as competitive or huge.

While so many sellers are making a lot of money on Amazon, its fierce competition means the profit margins will always be small. Also, it may be pretty expensive, especially for those who have no other sources of income.

And to get your products to the point where buyers can easily find them is a lot of work in itself. You have to cough out specific fees for each sale.

Various complications like these make sellers ask, “is selling on amazon worth it”? We believe it is, but some alternatives may make life easier for you.

So, let’s look at the options.

Which platforms would we recommend? Quite a few:

Registering and selling on these sites may not be as straightforward as on Amazon, but they’re worth a try.

However, we must confess that that Amazon remains the most significant chance to make the biggest sales.

Conclusion

Many people still assume that selling on Amazon is not just a part-time job.

Yes, it starts that way for many, but a little more seriousness can turn fortunes around with the opportunities involved. However, its size is also its biggest challenge.

Sellers have to contend with several hurdles before the sales keep coming. This has led many to wonder if Amazon is still worth it. We believe it is.

You won’t find a bigger opportunity to make money (at least not now). All you have to do is, work hard and persevere.

Reference articles

Tim Carlson

Tim Carlson

I'm Tim or as others call me a bit of an Internet geek, serial entrepreneur, and have gone deep down the rabbit hole of all things Amazon FBA. I have joined the Infinite FBA team to help other Amazon sellers achieve their own goals.