New Amazon sellers are earning between $26,000-$810,000 per year in profits. What does it take to start selling on Amazon, and what can new sellers do to ensure they’re profitable in 2020? Jungle Scout’s latest report has the data.
The majority of Amazon sellers (80%) say they sell on Amazon for the freedom the income provides. They’re looking for a new job or to “be their own boss.” Many are looking for extra money to support their kids or to pay off debt or even to travel the world.
Whatever the reason for selling on Amazon, it’s the primary income stream for many.
And in 2020, selling on Amazon is still undeniably a viable way to make money. In fact, 61% of sellers said their profits increased in 2019, and 92% are planning to continue selling on Amazon in 2020.
So just how much can you expect to make selling on Amazon in 2020?
The team at Jungle Scout, the leading all-in-one Amazon seller tool, 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:
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.
In short, 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!
- About half (50.7%) of Amazon sellers make from $1,000-$25,000/month, which could mean annual sales from $12,000-$300,000.
- One in five (20%) make $25,000-$250,000/month, amounting to annual sales between $300,000 and $3,000,000; another 3.3% make more than $250,000 in monthly sales.
- Only 23.8% of sellers make under $1,000/month in sales, and 2.1% don’t know their monthly sales.
Further, since selling on Amazon has only become a viable way of building an e-commerce business in the past few years, most Amazon sellers are relatively new to the game.
But that hasn’t limited their sales.
The majority of Amazon sellers (50.3%) have reached lifetime sales of more than $100,000:
- Lifetime sales $100,000-500,000: 20.5%
- $500,001-1,000,000: 8.3%
- $1,000,001-5,000,000: 11%
- $5,000,001-10,000,000: 3.2%
- $10,000,001-50,000,000: 4.3%
- 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.
- Two-thirds of sellers (67.2%) see profit margins higher than 10%.
- Better still, 36% see profit margins above 20%.
- On the other hand, 8.4% said their businesses are not yet profitable, and 5.3% did not know.
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 (43.2%) 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: 38.2%
- $25,000-50,000: 13.3%
- $50,001-100,000: 8.4%
- $100,001-500,000: 12.2%
- $500,001-1,000,000: 3.5%
- $1,000,001-5,000,000: 2.7%
- $5,000,000-10,000,000: 1.4%
- 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.
2. How long does it take to become profitable on Amazon?
Across all respondents, the majority (67%) said they were profitable within the first year selling.
- Profits within 3 months: 22%
- Profits within 3-6 months: 22%
- Profits within 6 months-1 year: 23%
- Profits within 1-2 years: 13%
- Profits within more than 2 years: 3%
Even newer Amazon sellers (1-2 years of experience) still pulled in some strong profits in 2018 and 2019, and the majority (63%) were profitable within their first year:
- Profits within 3 months: 16%
- Profits within 3-6 months: 23%
- Profits within 6 months-1 year: 24%
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, nearly one third (32%) 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 (60%) spent less than $5,000 to get started selling on Amazon, and (29%) spent less than $1,000.
- Sellers spent less than $500: 17%
- $500-1,000: 12%
- $1,001-2,500: 13%
- $2,501-5,000: 18%
- $5,001-10,000: 21%
- More than $10,000: 21%
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; 67% were actively selling within 6 weeks, compared to at most 51% from higher spenders in that time frame.
- … were profitable before those who invested more; 46% of lower-spend sellers reported being profitable in fewer than 3 months, compared to at most 30% of higher spenders in that time frame.
- … have solid profit margins; 67% said they had profit margins higher than 10%, and 23% had profit margins higher than 25%.
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 (57%) spend fewer than 20 hours per week doing so, and 13% spend just over 30 minutes each day.
- Fewer than 4 hours per week: 13%
- 4-10 hours: 24%
- 11-20 hours: 20%
- 21-30 hours: 15%
- 31-40 hours: 10%
- 41-50 hours: 9%
- 51-60 hours: 3%
- 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 (64%) spent up to 20 hours per week on their Amazon businesses, compared to 37% of sellers with more than five years of experience.
3. Will selling on Amazon be profitable in 2020?
By all known indicators, yes, selling on Amazon will be profitable in 2020.
Nearly all sellers (92%) said they plan to continue selling on Amazon in 2020, and 72% 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. The majority of Amazon sellers (55%) have been selling for just 1 to 2 years, and 67% of them earn more than $1,000 in monthly sales — some much more.
While some new sellers (12%) 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%: 21%
- Profit margin 11-20%: 30%
- Profit margin 21-50%: 30%
- 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 $26K a year on Amazon:
New Amazon sellers (with 1-2 years of experience) are making an average* of $12,180.50 in sales each month — or $146,166 in sales per year.
Considering the same group’s average profit margin, 17.5%, new sellers are averaging $2,131.59 per month or $25,579.05 in annual profits.
And for the one-third of new sellers with profit margins of 21% and higher, they could be taking home monthly profits from $2,500/month to five figures and beyond.
New Amazon sellers are earning an average profit of nearly $26K 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. How much are they profiting from selling on Amazon?
Considering the weighted average of the profit margin range among this particular group, 27%, these new super sellers are averaging $67,500 per month or $810,000 in annual profits.
Even more extraordinary, nearly 40% of these super sellers cited profit margins of 26% and above; 8% with profit margins above 100%. These folks are indeed Amazon millionaires.
*Weighted average calculated based on reported sales by midpoint of range, and capped at the high-end range ($250K) to prevent arbitrary projection.
4. Tips from successful Amazon sellers for a profitable 2020
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:
- 80% 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 (53.1%) 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.
- 69% 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 54% plan to add new products in the coming year.
What Amazon sellers say:
- “I wish I knew how important it is to listen to people that have done it already.”
- “You need to be patient for things to start working.”
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.”
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.
For more tips and resources, check these out:
- How to Make Money From Home
- Make Money on Amazon Using Retail Arbitrage, and Other Tips
- Why You Should Start Selling on Amazon in 2020
- Find Profitable Amazon Product Niches (Without Overthinking It)
- My Favorite Amazon Seller Tools
Between November 14 and December 10, 2019, Jungle Scout surveyed 2,063 Amazon sellers about their experiences. This article references responses from 1,046 experienced Amazon sellers who have more than a year of selling experience and at least one live product listing.
Respondents represent 93 countries, all 14 Amazon marketplaces, and all relevant Amazon product categories. They are 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 2020.
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].