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New Amazon sellers are earning an average of $42,000 in annual profits. What does it take to start selling on Amazon, and what can new sellers do to ensure they are profitable in 2021? Jungle Scout’s latest report has the data.

44% of new Amazon sellers (who have been selling for 1-2 years) say they sell on Amazon to “be their own boss.” Additionally, two in five new sellers are looking for extra income to supplement their existing income. Many are searching for flexibility to work from any location or to travel the world while a third want to feel successful or accomplished. 

Whatever the reason for selling on Amazon, it’s the primary income stream for many.

And in 2021, selling on Amazon is still undeniably a viable way to make money. In fact, 62% of new sellers said their profits increased in 2020, and 56% are planning to continue selling on Amazon in 2021.

So just how much can you expect to make selling on Amazon in 2021?

The team at Jungle Scout, the leading all-in-one platform for selling on Amazon, recently surveyed* thousands of Amazon sellers so you can learn all you need to know about getting started selling on Amazon from those who are doing it.

What we’ll reveal:

  1. How much Amazon sellers make, in sales and profits
  2. How long it takes sellers to start earning profits — and how much time and money they need to start
  3. Whether selling on Amazon will be profitable in 2021
  4. Tips from sellers to get started making money on Amazon now

Now, on to the data!

 

1. How much do Amazon sellers make?

Though there are a number of different methods for selling on Amazon, most common is Amazon’s Fulfillment-by-Amazon (FBA) program.

Like any other business, selling on Amazon will involve some expenses and fees on the seller’s part, but what makes Amazon FBA so appealing is that it simplifies that for sellers. 

Simply put, you choose a product, get it to Amazon’s warehouses, set up your Amazon listing, and Amazon takes care of the rest. And you start seeing sales and profits.

 

What are the average monthly sales for Amazon sellers?

Most Amazon sellers make at least $1,000 per month in sales, and some super-sellers make upwards of $250,000 each month in sales — that amounts to $3 million in annual sales!

  • Nearly half (44%) of Amazon sellers make from $1,000-$25,000/month, which could mean annual sales from $12,000-$300,000. 
  • One in five (19%) makes $25,000-$250,000/month, amounting to annual sales between $300,000 and $3,000,000; another 6% make more than $250,000 in monthly sales.
  • Only 26% of sellers make under $1,000/month in sales, and 4% don’t know their monthly sales.
Monthly sales Percent of sellers
Under $500 17%
$501-$1,000 9%
$1,001 – $5,000 20%
$5,001 – $10,000 13%
$10,001 – $25,000 12%
$25,001 – $50,000 10%
$50,001 – $100,000 5%
$100,001 – $250,000 5%
More than $250,000 6%
I don’t know 4%

Selling on Amazon became a viable way of building an ecommerce business relatively recently, so many Amazon sellers are new to the game. But that hasn’t limited their sales. 

More than two out of five Amazon sellers (43%) have reached lifetime sales of over $100,000:

  • Lifetime sales $100,000-500,000: 16%
  • $500,001-1,000,000: 8%
  • $1,000,001-5,000,000: 8%
  • $5,000,001-10,000,000: 4%
  • $10,000,001-50,000,000: 4%
  • More than $50,000,000: 3%

While sales are often a strong measure of a healthy Amazon business, they don’t paint a complete picture of what money an Amazon seller takes home. So let’s turn to profits.

 

How much do Amazon sellers profit?

The higher the profit margin, the better, but small companies often struggle to achieve profitability at all in their first few years. Contrastingly, Amazon sellers see relatively high profit margins.

  • More than two-thirds of sellers (68%) see profit margins higher than 10%.
  • Better still, 36% see profit margins above 20%.
  • On the other hand, 8% said their businesses are not yet profitable, and 8% did not know.
Profit margin Percent of sellers
~1-5% 6%
6-10% 10%
11-15% 13%
16-20% 19%
21-25% 14%
26-50% 19%
51-100% 3%
Not currently profitable 8%
Don’t know 8%

While profits change based on factors including sales volume and business expenses throughout the year, sellers weighed in on their total lifetime profits since they started their Amazon businesses.

How much money have Amazon sellers made over time?

A large number of Amazon sellers (38%) have seen lifetime profits of more than $25,000 — not bad for what many start as a “side hustle” — and 6% are millionaires from their Amazon businesses alone.

  • Lifetime profits under $25,000:  42%
  • $25,000-50,000: 10%
  • $50,001-100,000: 8%
  • $100,001-500,000: 10%
  • $500,001-1,000,000: 4%
  • $1,000,001-5,000,000: 3%
  • $5,000,000-10,000,000: 1%
  • More than $10,000,000: 2%

6% of Amazon seller are millionaires from their Amazon businesses alone

And for many Amazon sellers, those profits turn quickly.

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2. How long does it take to become profitable on Amazon?

Across all respondents, the majority (64%) said they were profitable within the first year selling. 

  • Profits within 3 months: 20%
  • Profits within 3-6 months: 17%
  • Profits within 6 months-1 year: 23%
  • Profits within 1-2 years: 16%
  • Profits within more than 2 years: 4%

Even newer Amazon sellers (1-2 years of experience) still pulled in some strong profits in 2019 and 2020, and the majority (58%) were profitable within their first year:

  • Profits within 3 months: 14%
  • Profits within 3-6 months: 17%
  • Profits within 6 months-1 year: 27%

So, how do you get started selling on Amazon? We asked sellers how much money and time they invested to get their businesses up and running.

 

How much money do you need to start selling on Amazon?

One of the biggest hurdles for people starting to sell on Amazon is the idea that it will cost them too much money. As with many things, what you put in impacts what you get out. But that doesn’t have to mean cash — it can mean time, the necessary data to inform your decisions, or simply the will to succeed.

In fact, over one in five (27%) of the most successful Amazon sellers spent no more than $500 — if any — to start the businesses they are still operating more than five years later. 

Overall, most sellers (58%) spent less than $5,000 to get started selling on Amazon, and (28%) spent less than $1,000.

  • Sellers spent less than $500: 18%
  • $500-1,000: 10%
  • $1,001-2,500: 12%
  • $2,501-5,000: 18%
  • $5,001-10,000: 14%
  • More than $10,000: 22%

What is that money spent on? Typically, initial costs include sourcing your product (including samples), Amazon fees, and promotions. (Read more about how much it costs to sell on Amazon here.)

Interestingly, you don’t need to spend a lot of money to be successful selling on Amazon, and often starting small correlates to greater success. 

Sellers who spent less than $500 starting their Amazon businesses:

  • …got their listings live on Amazon before higher spenders; 59% were actively selling within 6 weeks, compared to at most 42% from *higher spenders in that time frame.
  • …were profitable before those who invested more; 40% of lower-spend sellers reported being profitable in fewer than 3 months, compared to at most 24% of higher spenders in that time frame.
  • …have solid profit margins; 73% said they had profit margins higher than 10%, and 24% had profit margins higher than 25%.

*higher spenders = spend $501-$1,000

 

How much time do you need to start selling on Amazon?

Overall, Amazon sellers don’t need to spend a lot of time on their Amazon businesses. Most (59%) spend fewer than 20 hours per week doing so, and 17% spend just over 30 minutes each day.

  • Fewer than 4 hours per week: 17%
  • 4-10 hours: 22%
  • 11-20 hours: 21%
  • 21-30 hours: 16%
  • 31-40 hours: 9%
  • 41-50 hours: 7%
  • 51-60 hours: 4%
  • More than 60 hours: 6%

In fact, you’re likely to give more time to get your business off the ground in its early stages; after they find products to sell and create their niche, many sellers simply maintain their businesses and let the income roll in. 

For new sellers (with 1-2 years of experience), most (65%) spent up to 20 hours per week on their Amazon businesses, compared to 47% of sellers with more than five years of experience.

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3. Will selling on Amazon be profitable in 2021?

By all known indicators, yes, selling on Amazon will be profitable in 2021. 

Nearly all sellers (80%) said they plan to continue selling on Amazon in 2021, and 63% are optimistic that selling on Amazon will be a viable way to make money online in the future.

Amazon is an industry unto itself, and it’s irrevocably tied into so many other industries that the opportunity for sellers to find a profitable niche to sell in is massive.

This goes for new sellers, too. Close to half of Amazon sellers surveyed (49%) have been selling for just 1 to 2 years, and 64% of them earn more than $1,000 in monthly sales — some much more. 

While some new sellers (19%) are not yet profitable, most are already taking big Amazon money home — or using it to invest further in their businesses:

  • Amazon seller with a profit margin less than 10%:  17%
  • Profit margin 11-20%:  31%
  • Profit margin 21-50%: 33%
  • Profit margin 50+%: 3%

What does that amount to in dollars? Let’s just say it’s enough to be considered much more than “side hustle money.”

How new sellers could start making $42K/year on Amazon

New Amazon sellers (with 1-2 years of experience) are making an average* of $19,510 in sales each month — or $234,120 in sales per year.

Considering the same group’s average profit margin, 18%, new sellers are averaging $3,511 per month or $42,142 in annual profits.

And for the more than one-third of new sellers with profit margins of 21% and higher, they could be taking home monthly profits from $4,200/month to five figures and beyond.

New Amazon sellers are earning an average profit of nearly $42K per year.

A handful of new sellers are fortunate enough to be raking in incredibly high sales — upwards of $250,000 per month — $3 million per year. While these “super sellers” are outliers from the average seller, they’re certainly aspirational.

*Weighted average calculated based on reported sales by midpoint of range, and capped at the high-end range ($250K) to prevent arbitrary projection.

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4. Tips from successful Amazon sellers for a profitable 2021

Countless have tried their hands at selling on Amazon. So what can you learn from those who’ve had distinct, measured success? Some of their top tips:

Start now.

  • 66% of sellers wish they had started selling on Amazon sooner.
  • Of the most successful sellers who have been selling on Amazon for more than five years, most (69%) got started and had a live product listing within 6 weeks.

What Amazon sellers say:

  • “Just jump in now. Perfection is the enemy of profit.”
  • “I wish I knew how important it was to start sooner. The barrier to quick trajectory seems to be higher over time.”
  • “I wish I had known where to start and where to get good information.”

 

Put in the effort — it will pay off.

  • 68% of sellers maintain that selling on Amazon takes some effort and is not a “get-rich-quick strategy.”
  • Most sellers are still evolving their Amazon businesses and 50% plan to add new products in the coming year.

What Amazon sellers say:

  •  “I need to spend more time doing product research.”
  • “[You] need time.”
  • “More and more analytics.”

 

Find the right resources and tools.

  • The primary factors sellers said contribute to their success selling on Amazon are having the time to commit to their business and having the necessary tools and information to help them.

What Amazon sellers say:

  • “I wish I knew the right way to launch without burning a ton of money.”
  • “I wish I knew about product research for finding ideal products.”
  • “I wish I knew about the tools for selling on Amazon.”
  • “I wish I knew which metrics are most important to keep track of.”

For more tips and resources, check these out:

If you’re ready to start selling on Amazon, consider signing up for Jungle Scout’s Freedom Builder Bootcamp! Join Jungle Scout Founder and CEO Greg Mercer on a limited bootcamp course designed to get you up and running as a seller on Amazon. 

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*Methodology

Between December 1-28, 2020, Jungle Scout surveyed 4,864 Amazon sellers about their experiences. This article references responses from 989 experienced Amazon sellers who have more than a year of selling experience and at least one live product listing and new sellers with at least one to two years of selling experience.

Respondents represent 70 countries, all 17 Amazon marketplaces, and all relevant Amazon product categories. They are all ages from 18 to 80+, as well as all genders and levels of education.

The full survey results, including breakdowns by demographics, FBA vs. FBM, product category, and other critical variables, will be published in early 2021.

Sign up for Jungle Scout’s newsletter to make sure you don’t miss the report!

For more information about this survey and/or Jungle Scout’s data, please contact [email protected].

 

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