The average annual profit of new Amazon sellers is $42,000. In 2022, how do new sellers become profitable on Amazon? What can they do to ensure success? This is the question Jungle Scout answered in its latest report.
In addition, 36% of new Amazon sellers are looking for supplemental income to supplement their existing incomes because they want to be their own boss on Amazon. A third of people want to feel successful or accomplish something while many want to work from home or travel the world.
Amazon is the primary source of income for many, regardless of why they sell on the site.
What will be your profit margin in 2022 from selling on Amazon?
Hundreds of thousands of Amazon sellers have been surveyed* by Jungle Scout, the leading platform for selling on Amazon, so you can learn all you need to know about starting a business there from people who are doing it.
1. What is the average Amazon seller’s profit?
Amazon’s Fulfillment-by-Amazon (FBA) program is the most common method for selling on the site.
Amazon FBA simplifies the cost of selling on Amazon for sellers. Just like any business, selling on Amazon involves costs and fees for the seller.
It works this way: You choose the product, you ship it to Amazon’s warehouses, you set up a listing, and Amazon does the rest. Sales and profits begin to flow.
How much do Amazon sellers sell on average each month?
Some Amazon sellers make as much as $250,000 in sales each month – that’s $3 million in annual sales for those who make at least $1,000 per month!
- Four in five Amazon sellers (44%) make from $1,000 to $25,000 per month, which could translate into $12,000-$300,000 in sales per year.
- Nineteen percent (18%) have a monthly income between $25k and $250k, or an annual income between $300k and $3m; another six percent have a monthly income over $250k.
- About 26% of sellers make less than $1,000 per month, and 4% don’t know how much they make each month.
Amazon has only recently become a viable way for entrepreneurs to build ecommerce businesses, so many Amazon sellers are new to it. But that hasn’t stopped them from making sales.
Although sales often indicate a healthy Amazon business, they do not provide a complete picture of what money Amazon sellers take home. Let’s examine profits instead.
What is the profit margin for Amazon sellers?
It is better if a company has a high profit margin, but small firms often cannot achieve profitability in their first few years. Amazon sellers, on the other hand, have relatively high profits.
- A majority of sellers (68%) say their profit margin exceeds 10%.
- Furthermore, 36% of companies report profit margins above 20%.
- The other 8% don’t know whether their businesses are profitable or not.
- Sellers weigh in on the total lifetime profits they have generated since they started their Amazon businesses, since sales volume and expenses change throughout the year.
How much money have Amazon sellers made over time?
Most Amazon sellers (38%) have made more than $25,000 in lifetime profits – not bad for something many of them started as a “side hustle” – and more than 6% of them are millionaires.
One in six Amazon sellers is a millionaire solely from their Amazon businesses
Profits turn quickly for many Amazon sellers.
2. What is the time it takes to become profitable on Amazon?
Over half of all respondents (64%) reported being profitable in their first year.
What is the procedure for selling on Amazon? The time and money sellers invested to start their businesses was asked.
Starting an Amazon business requires a certain amount of money.
The idea that it will be too expensive for people to start selling on Amazon is one of the biggest obstacles. Your investment impacts your results. However, it doesn’t have to mean money – it can be time, data to inform your decisions, or simply willpower.
Over one in five (27%) of the most successful Amazon sellers spent not more than $500 – if any – when they started businesses that they are still running more than five years later.
On what do those funds go? Costs associated with initial product development include product sourcing as well as Amazon fees and promotion.
It’s interesting to note that it doesn’t take much money to be successful on Amazon, and often starting small correlates to success.
Amazon sellers who started their businesses for less than $500:
- Within 6 weeks, 59% of lower spenders were actively selling on Amazon, compared to at most 42% of higher spenders in that period.
- Those who invested less than those who invested more were profitable within three months; 40% of lower-spend sellers achieved profitability within three months, compared to 24% of high spenders within the same period.
- The majority (73%) say their profit margins are higher than 10%, and 24% say their margins are higher than 25%.
How much time do you need to start selling on Amazon?
A lot of time does not have to be spent on Amazon businesses by Amazon sellers. Most (59) spend just over 30 minutes each day on it, and 17% spend just over 20 hours a week.
Getting your business off the ground takes more time in its initial stages; once you find products to sell and discover your niche, many sellers simply maintain their business and wait for the income to start rolling in.
Sellers with less than five years of experience, on the other hand, spent only 47% of their time on their Amazon businesses, compared to 65% of new sellers (with 1-2 years of experience).
3. Can Amazon be profitable in 2022?
All indications indicate that Amazon is likely to be profitable in 2022.
Eighty percent of sellers intend to sell on Amazon in 2021, and 63 percent are optimistic that it will be a viable way to make money online in the future.
In addition to being its own industry, Amazon is so interconnected with so many other industries that sellers have a wide variety of options for finding a profitable niche.
New sellers are also affected by this. More than half of the Amazon sellers surveyed (49%) have been selling for just one or two years, and 64% make more than $1,000 each month – some much more.
In dollars, how much does that amount to? It’s plenty to consider it much more than “side hustle money.”
A new seller could make $42K/year on Amazon if they follow these steps
Sellers who are new to Amazon (those with less than two years of experience) make an average* of $19,510 in monthly sales – or $234,120 annually.
If we use the 18% average profit margin for the same group of sellers, we find that new sellers are making $42,142 per year or $3,511 per month on average.
Profits can range from $4,200/month to five figures and beyond for the more than one-third of new sellers with margins of at least 21 percent.
Several new sellers have been raking in extremely high sales – upward of $250,000 per month – more than $3 million per year. Despite these unusual “super sellers” being outliers, they’re undoubtedly aspirational.
4. How to become a profitable Amazon seller in 2022 with tips from successful sellers
Amazon has become a popular selling platform for many people. What can you learn from those who have achieved distinct and measurable success? Consider these tips:
- In 2016, 66% of Amazon sellers wished they had started selling earlier.
- In six weeks or less, 69 percent of top sellers who have sold on Amazon for over five years started their product listings.
It pays off to put in the effort.
- Sixty-eight percent of sellers say selling on Amazon isn’t an easy way to get rich quick.
- In the coming year, 50% of Amazon sellers plan to add new products to their businesses.
Resources and tools to help you
- Selling on Amazon is mainly successful when sellers have the time and information to dedicate to their business.
Final Thoughts : How Much Can You Make Selling On Amazon In 2022
As a new seller with little experience, you can still make 6 figures on Amazon in 2021. This article aims to provide you with the information you need to launch a successful Amazon business by showing you how much money you can make by selling on Amazon.