In a year, Amazon sellers arguably make an average of $42,000 in profits. While how these sellers come about this annual profit and what it takes to be a successful Amazon seller might be somewhat confusing to you, continue reading this article to discover how much Amazon Sellers can make!
Approximately 45% of Amazon sellers that were interviewed said they were into the business to experience the sole proprietorship feeling. Additionally, most of these sellers said they were into the business to make extra income to supplement their primary source of income. Some also said they like this business because of its flexibility. This is understandable because Amazon sellers can operate from anywhere in the world.
Till this present year, 2021, selling on Amazon is still as lucrative as ever. About 60% of new sellers attested that their profit margin increased in 2020, and about 80% of these sellers are willing to continue making sales on Amazon in 2021.
In this article, the following will be revealed:
- The average profit of Amazon sellers in 2021
- How long does it take to earn this profit
- How much time and money must be invested to realize this amount of profit
The Average Profit of Amazon Sellers in 2021
Like every other business, selling on Amazon will incur expenses on the seller. However, there is a method of selling on Amazon that helps sellers maximize their profits by reducing expenses and fees incurred. The Fulfillment-by-Amazon (FBA) program is one of the best methods to use to realize maximum profit from selling on Amazon.
The FBA program involves choosing a product that you wish to sell, getting it to Amazon’s store, set up a listing on Amazon for yourself, and leave the rest to the FBA program and Amazon. In no time, you will start making your profit.
A majority of Amazon sellers make at least $1,000 monthly, and that’s the case for part-time sellers. Big-time Amazon sellers make more than $250,000 monthly — that’s about $3 million annually.
About 45% of Amazon sellers make within the range of $1,000- $25,000 monthly. From calculation this is about $12,000- $300,000 annually.
19% of Amazon seller claimed they realize about $25,000-$250,000 monthly, and $300,000-$3,000,000 annually. About 6% claimed they make above $250,000 in just one month.
26% claimed they hardly make up to $1,000 monthly, while 4% don’t know how they make monthly.
Selling on Amazon became known to the world as a lucrative business, leading to a great inflow of new sellers into the business. You will expect that this will affect turnout rates as competition increases; well, that’s not the case as about 43% of Amazon sellers have made over $100,000 from the business as of 2021.
The amount of sales you make isn’t the ideal measure of what the seller takes home. Profit is the ideal measure!
How Much Profit do Amazon Sellers Realize Annually
Once the profit margin is high, the business owner will not have to struggle. Amazon sellers never have to struggle as they realize a high-profit margin.
68% of sellers on Amazon have profit margins way above 10%. 36% claimed their profit margin annually is above 20%, while 8% said they haven’t started making profits.
- How Long Does it Take to Earn This Profit?
A survey on Amazon sellers showed that about 64% of sellers made their profit within their first year on Amazon. Here’s a breakdown of how these Amazon sellers made their profits:
- Profits within three months: 20%
- Profits within six months of sales: 23%
- Profits accrued with 1-2 years of sales: 16%
- Profits accrued within 3-6 months on Amazon: 17%
- Profit within 2 years or more: 4%
Even new sellers on Amazon were able to make their profits within 2 years of sales, and a more significant percentage of these new sellers (~58%) made their profits in their first year on Amazon.
- How Much Time and Money Must be Invested to Realize This Amount of Profit on Amazon
For success in Amazon, you need a reasonable amount of capital. This is one of the biggest hurdles aspiring sellers are faced with. Most of these aspirants feel selling on Amazon will cost them a lot of money to set up; however, you won’t harvest if you don’t invest. Investment in Amazon isn’t just about cash; you also need to invest your time. Let’s have a look at what time and money investment entail.
About 27% of successful sellers on Amazon invest nothing less than $500 as initial capital. They also said this cash investment has kept them running for more than 5 years.
58% of these sellers claimed to have spent up to $5,000 to become an Amazon Seller. Similarly, about 28% spent up to $1,000 to start up sales on Amazon.
You will most likely be wondering what exactly this money is spent on. Well, initial costs including product samples, ads and promotion fees, and Amazon fees. Interestingly, you don’t have to spend much starting up sales on Amazon; it’s all about who gets their listing list of Amazon first. A small-scale investor could make much more profit than large-scale investors if the investor puts up his listing life first on Amazon before the large-scale investor.
Overall, Amazon sellers don’t need to invest much time in the business. About 59% spend less than 24hours per week, and about 18% spend just half an hour daily on the business.
However, you’re most likely going to invest more time during the early stages of this business. You’ve to find products, create niches, and run ads; all these will take much of your time.
Conclusively, success on Amazon as a seller requires time investment and fund investment. Having enough time to commit to your business exposes you to different opportunities, while having enough cash to invest in Amazon sales exposes you to tools and top-notch information that will help you grow faster.