How Profitable Is Selling on Amazon? Facts and Tips
Amazon has transformed how businesses reach customers, offering unprecedented access to a vast market. However, businesses have to pay fees to use the platform, so they must consider how good the return on investment (ROI) will be. Just how profitable is selling on Amazon? Here are some facts and tips to help you make a decision for your small business.
What Sellers Make Starting Out
A 2024 survey by Jungle Scout reports that 31 percent of new Amazon sellers make less than $500 a month when first starting out. This isn’t much, but it shouldn’t be discouraging. Very, very rarely do new businesses experience immediate financial success. Profitability takes time.
What Is Possible To Make
For established sellers leveraging Amazon’s full marketing power, profitability can soar. Here are some important data from the same Jungle Scout survey:
22 percent of Amazon sellers see profits within the first three months.
More than half of Amazon sellers have a profit margin of 10 percent.
30 percent of Amazon sellers report sales totaling over $5,000 a month.
Profits range from the aforementioned $500 a month to a whopping $500,000 a month.
Now, that $500,000 a month reflects under 1 percent of Amazon sellers. More realistically, sellers with quality, popular products are likely to make between $1,000–25,000 monthly with enough time and effort on the platform.
Furthermore, high-performing niches and advanced fulfillment strategies such as Amazon FBA (Fulfillment by Amazon) significantly increase revenue potential. These sellers fine-tune their supply chains, improve customer ratings, and continuously optimize listings for visibility.
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Factors That Determine Profitability on Amazon
What you sell and how much effort you invest in marketing and optimization will impact how profitable you are on Amazon.
As you can probably guess, sellers with niche, well-reviewed, in-demand products will see more profits than sellers with generic products. Pricing also plays a role, as Amazon is an incredibly competitive platform, and most buyers are looking for a deal.
Your expenses also play a role. On top of how much it costs to produce your goods, Amazon’s referral fees, logistics expenses, and advertising costs also eat into profits.
Ultimately, there’s no way to know exactly how much you’ll make until you try it. However, having a product that already sells well and investing in its success on the platform will help drive sales and growth.
How To Get Started
If you think you’re ready to start selling on Amazon, congratulations! This is a big business step and can lead to big profits with enough effort.
Just make sure to conduct comprehensive market research to understand product trends and competition. Next, open a seller account through Amazon’s Seller Central and decide between the individual or professional plan based on your projected sales volume. Invest in professional-quality product images and compelling listing descriptions. Afterward, you’ll want to test various pricing strategies to find the optimal balance between profit margins and sales volume. Finally, regularly evaluate sales data to adjust your approach effectively.
Selling on Amazon can be profitable, but how much depends on what you sell and the effort you invest. With this information in mind, you can make an informed decision for your small business to maximize growth and impact in the online retail space.
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Meet The Writer!
Hi! My name is Nadia Ibrahim-Taney and I help people design happy and fulfilling careers through authentic career coaching. My expertise includes career exploration guidance, resume writing, interview prep and LinkedIn profile optimization. My pronouns are She/ Her/ Hers and as a member of the LGBTQ+ community, I focus on how diverse identities impact and influence folks holistically and professionally. Please connect with me on LinkedIn or at Nadia@beyonddiscoverycoaching.com
