New Amazon sellers make an average yearly profit of $42,000. How Much Money Do Amazon Sellers Make , What does it take to sell on Amazon, and how can new sellers guarantee their businesses remain successful in 2021? The data is included in Jungle Scout’s most recent report.
44% of new Amazon sellers (those who have been selling for less than two years) said they sell on Amazon to “be their own boss.” Additionally, two out of every five new sellers want additional money to complement their current salary.
Many want the freedom to work from any place or to travel the globe, while a third desire a sense of accomplishment or achievement.
Whatever the motivation for selling on Amazon, many people rely on it as their main source of income.
And in 2021, selling on Amazon is a feasible method of earning money. Indeed, 62% of new sellers reported an increase in earnings in 2020, and 80% want to continue selling on Amazon in 2021.
So how much money can you earn selling on Amazon in 2021?
We have recently surveyed* thousands of Amazon sellers so that you can learn all you need to know about getting started selling on Amazon directly from those who have already done so.
Though there are a variety of ways to sell on Amazon, the most popular is via Amazon’s Fulfillment-by-Amazon (FBA) program.
As with any other company, selling on Amazon will include certain costs and fees on the seller’s side; nevertheless, what makes Amazon FBA so attractive is how it streamlines this process for sellers.
Simply stated, you choose a product, ship it to Amazon’s warehouses, and create an Amazon listing; Amazon handles the rest. And you begin to notice increased sales and profits.
What is the average monthly revenue generated by Amazon sellers?
The majority of Amazon sellers earn at least $1,000 each month, while some super-sellers earn up to $250,000 per month – that’s $3 million in yearly sales!
Nearly half (44 per cent) of Amazon sellers earn between $1,000 and $25,000 each month, which translates to yearly sales of between $12,000 and $300,000.
One in five (19%) earns between $25,000 and $250,000 per month, equating to yearly sales of between $300,000 and $3,000,000; another 6% earn more than $250,000 per month.
Only 26% of vendors earn less than $1,000 each month, and 4% have no idea.
Selling on Amazon just become a viable method of growing an eCommerce company very recently, and as a result, many Amazon sellers are newcomers. However, this has had little effect on their sales.
Over two-thirds of Amazon sellers (43 percent) have exceeded $100,000 in lifetime sales:
Sales over one’s lifetime $100,000-500,000: 16%
Over $50,000,000: 3%
While sales are often a good indicator of a successful Amazon company, they do not provide an accurate picture of how much money an Amazon seller earns. Therefore, let us consider profits.
How much profit do Amazon merchants make?
Profit margins are desirable, but small businesses often struggle to attain profitability in their first few years. In comparison, Amazon merchants benefit from relatively large profit margins.
Over two-thirds (68%) of vendors report profit margins greater than 10%.
Even better, 36% anticipate profit margins exceeding 20%.
On the other side, 8% said that their companies are not yet profitable, and 8% stated that they were unsure.
While earnings fluctuate during the year depending on variables like sales volume and company costs, sellers weighed in on their cumulative lifetime income since they began their Amazon companies.
Many Amazon sellers (38 per cent) have earned more than $25,000 in lifetime earnings — not bad for what many begin as a “side hustle” — and 6% are billionaires solely from their Amazon enterprises.
Profits earned over a lifetime of less than $25,000: 42%
Over $10,000,000: 2%
And for a large number of Amazon merchants, these gains accrue rapidly.
The majority (64 per cent) of respondents said that they were profitable within the first year of selling.
Even younger Amazon sellers (with less than two years of experience) made significant earnings in 2019 and 2020, and well over half of these new merchants (58 per cent) were successful within their first year:
Profits within three months: 14%
Profitability within 3-6 months: 17%
Profits within six months to one year: 27%
Thus, how can you begin selling on Amazon? We questioned vendors about the financial and time commitments required to get their companies up and operating.
One of the most significant barriers to entry for those considering selling on Amazon is the belief that it would be prohibitively expensive. As is the case with many other things, what you put in affects what you receive out. However, this does not have to be in the form of money; it may be in the form of time, the required facts to guide your choices, or just the desire to succeed.
Indeed, more than one-fifth (27%) of the most successful Amazon sellers spent less than $500 — if at all — to establish the companies they are still running more than five years later.
Overall, the majority of sellers (58 per cent) spent less than $5,000 and (28 per cent) spent less than $1,000 to get started selling on Amazon.
Less than $500 was spent by sellers: 18%
Over $10,000: 22%
What purpose does that money serve? Initial expenses often involve acquiring your goods (including samples), Amazon fees, and promotional materials.
How Much Money Do Amazon Sellers Make , Interestingly, you do not need a large financial investment to be successful selling on Amazon, and often, beginning small corresponds with better success.
Sellers who invested less than $500 in their Amazon operations include the following:
launched their listings on Amazon ahead of higher spenders; 59% were actively selling within six weeks, compared to no more than 42% of *greater spenders over the same period.
were profitable before those who spent more; 40% of lower-spend merchants reported profitability in less than three months, compared to just 24% of higher-spend sellers in that period.
have healthy profit margins; 73% reported profit margins more than 10%, while 24% reported profit margins greater than 25%.
*higher spenders Means those who spend between $501 and $1,000
In general, Amazon sellers do not need a great deal of time to run their Amazon companies. How Much Money Do Amazon Sellers Make , The majority (59 per cent) spend less than 20 hours each week doing so, while 17% spend little more than 30 minutes every day.
Weekly hours less than four: 17%
four to ten hours: 22%
11–20 hr: 21%
Between 21 and 30 hours: 16%
Between 31 and 40 hours: 9%
41-50 hr 7%
Between 51 and 60 hours: 4%
Over 60 hours: 6%
Indeed, you’re likely to invest more effort in the early phases of your company; after they’ve identified goods to offer and defined their niche, many sellers just manage their companies and watch the revenue flow in.
The majority of new sellers (those with 1-2 years of experience) spend up to 20 hours per week on their Amazon companies (65 per cent), compared to 47% of sellers with more than five years of experience.
Yes, selling on Amazon will be lucrative in 2021, according to all available indications.
Almost all sellers (80%) said that they want to continue selling on Amazon in 2021, and 63% believe that selling on Amazon will continue to be a viable method to earn money online in the future.
Amazon is a separate business, and since it is inextricably linked to so many other industries, the potential for sellers to discover a lucrative niche to sell in is enormous.
This also applies to new vendors. Nearly half (49%) of Amazon sellers polled had been selling for less than two years, and 64% make more than $1,000 in monthly sales – some much more.
While some new sellers (19%) are not yet successful, the majority are now taking significant Amazon revenue home – or utilizing it to expand their businesses:
Amazon merchant having a profit margin of less than 10%: 17%
What is the monetary value of that? Let us just state that it is sufficient to be regarded far more than “side hustle money.”
New Amazon sellers (those with 1-2 years of experience) generate an average* of $19,510 in monthly sales — or $234,120 in annual sales.
Using the same group’s average profit margin of 18%, new sellers earn an average of $3,511 per month or $42,142 per year.
And for more than one-third of new vendors with profit margins of 21% or more, monthly earnings may range from $4,200 to five figures and beyond.
How Much Money Do Amazon Sellers Make , A few lucky new sellers are raking in astronomical sales – upwards of $250,000 per month — $3 million per year. While these “super sellers” are exceptions to the rule, they are unquestionably aspirational.
*Weighted average computed using reported sales by range’s midpoint and capped at the range’s high end ($250K) to avoid arbitrary projection.
Numerous individuals have experimented with selling on Amazon. Therefore, what can you learn from people who have achieved unique, quantifiable success? Several of their top recommendations include the following:
Sixty-six per cent of sellers wish they had launched their Amazon business sooner.
The majority (69 per cent) of the most successful sellers who have been selling on Amazon for more than five years began and had a live product listing within six weeks.
What Amazon sellers say: Simply dive in right now. Profitability is the nemesis of perfection.
According to 68 per cent of sellers, selling on Amazon requires work and is not a “get-rich-quick” approach.
The majority of sellers are still developing their Amazon businesses as well as 50% plan to introduce new items this year.
How Much Money Do Amazon Sellers Make , According to sellers, the main elements that contribute to their success selling on Amazon and How to make money on Amazon are dedicating time to their company and having the required tools and knowledge.