Amazon is one of the most well-known online platforms. Amazon has an estimated 200 million Prime subscribers in the U.S. It is also the most significant retail market in the world by revenue, with a market cap of $1.7 trillion as of June 2020.
Amazon’s platform makes it easy for you to sell your product on its marketplace. There are 300 million active users on Amazon, and over 50% of Amazon’s sales are generated by third-party sellers, so there is a huge customer base for your products.
The majority of customers start their online shopping searches from Amazon, with 90% of shoppers price checking Amazon’s product offerings before making their purchase decisions. Over 140,000 third-party sellers exceeded $100,000 in their annual sales, and 60% of the bestsellers focus on selling products from the Home & Kitchen category.
How much can you make?
There are a number of different methods for selling on Amazon, but the most common is Amazon’s Fulfillment-by-Amazon (FBA) program.
The best way to understand Amazon FBA is to think about it like a vending machine. You put your product into the machine, and then customers come along and pay for it. They get the product through the dispenser, and Amazon takes their money.
Now, there are a number of steps involved in getting your product into that machine. And those steps have their own costs, both in terms of time and money.
For instance, you have to find products that you can sell at a profit on Amazon. That involves research and competition analysis, among other things. You also have to make sure you have enough capital to buy the products that you want to sell.
In addition, you need to make sure that these products actually get shipped to Amazon’s warehouses—and this can cost anywhere from $0.75 per unit for small items up to $2 or more per unit for larger ones. And that doesn’t even include actual shipping costs!
However, what makes Amazon FBA so appealing is that it simplifies all of this for sellers
The survey also asked about income, and the results are pretty encouraging for anyone thinking of taking the plunge into Amazon selling:
Most sellers make at least $1,000 per month in sales
Nearly half (44%) of Amazon sellers make from $1,000-$25,000/month, which could mean annual sales from $12,000-$300,000. Of course this depends on margins; a merchant selling high-priced items will need fewer sales than someone selling cheaper products to achieve this range.
One in five makes $25,000-$250,000/month, amounting to annual sales between $300,000 and $3,000,000. That’s a substantial business by any measure.
another 6% make more than $250,000 in monthly sales
Only 26% of sellers make under $1,000/month in sales.