Should You Sell on Amazon.com?
Sell on Amazon
With all of the opportunities to earn money online, it’s hard to narrow down opportunities and focus on a particular effort. There are many different gurus and other marketers that promise you can earn a full-time income by doing surveys or similar things that waste your time. This blog is dedicated to helping people who want to build a real sustainable business that can earn six and seven figures annually. In this post, we will explore the numbers around selling on Amazon and see if this is a viable option for you. With hard numbers in front of you, it’s easy to see why selling on Amazon is one of the best economic opportunities available today.
Statistics
Whenever you’re evaluating a business opportunity, it’s crucial to do research beforehand and validate any claims someone is providing you with. Many online businesses opportunities are multi level marketing schemes that rely on you bringing in someone else to get income. If there aren’t many people (thousands) making a full-time income doing that business, you likely won’t be the first one. I want to help people who are rational and will be willing to put the same effort into this as they would starting any other business. With hard work and consistency, you can definitely succeed on selling on Amazon.com. Let’s dive into some of the numbers:
Amazon sellers sold more than $140 billion in 2019: In 2019, Amazon reported that over half of the $280 billion in revenue came from third-party sellers on their platform. This means many individuals and small businesses (like me and you) are making significant sales on Amazon. Amazon is different from other platforms because once you list an item, you can get access to millions of customers that are ready to view and pay for your product. The revenue that sellers have made on Amazon continues to increase year over year and it’s a great time to start today.
There are over 2.5 million Amazon sellers and half have already made 6 figures: Of the 2.5 million sellers currently on Amazon, half of them have generated over 6 figures during the lifetime of their seller account and 22% of sellers have made over $1 million during the lifetime of their account. There are over 200,000 sellers who make over $100,000 annually on the platform and there are over 25,000 sellers that make over $1 million annually. These figures show that there are hundreds of thousands of sellers that make their full-time living off selling on Amazon. It’s very likely that if you were to start today and put in the work, you can start seeing these numbers within a few years.
Access to hundreds of millions of customers: Amazon is the most popular and trusted ecommerce marketplace in many areas of the world. By selling on Amazon, you get access to over 150 million Amazon Prime members and millions of other buyers who have their cards on Amazon and are ready to purchase. Once you start making some sales on the platform, you can think of other viable business options due to your exposure to millions of customers. Some of the business models on Amazon include private label, FBA, merchant fulfillment and more. Some of these options can be very passive once you establish your business.
2/3rds of sellers are profitable within a year: Many people often confuse sales with profitability, your net profit is what you take home after the money you spent on a product and any associated fees. 2/3rds of sellers on Amazon are profitable within a year and almost all are profitable after the second year. While building your business, you will likely reinvest the profits you’ve made off selling products for the first few years. For example, if you earned $50,000 in sales in Amazon within the first year, you’re probably not taking home any of that because you’re using the money to scale your business so you can hit $100,000 or $200,000 the following year. If you’re not looking to scale your business, you can be profitable from day one and take home all the profits you make.
More than 50% of all sold items on Amazon are sold by sellers: The majority of items that are sold on Amazon is sold by individuals and businesses on the Amazon Seller platform. This will continue to increase as more sellers join the platform. This means that there are a ton of opportunities for sellers to join in and get a slice of the sales that are happening. With tens of categories and hundreds of subcategories, you can start selling products you are familiar with and carve out a niche for your business. If you are familiar with electronics, you’ll likely be able to know more of the ins and outs about sourcing products and finding similar opportunities.
With all of these sellers on the platform, you might be wondering if it’s too late for you to join. The short answer is no. Amazon is a trillion dollar company that provides incredible services for millions of customers worldwide. Their business model relies on sellers to continue to sell products to meet consumer demand. Amazon by itself cannot sell all the products that hundreds of millions of consumers are looking for every second. By starting today, you will put yourself in a position to start earning a few thousand dollars in a few months and that can lead to you transitioning into selling on Amazon full-time.
Selling on Amazon is not a pipe dream or a promise that you will be a millionaire, but if you put in consistent effort over several years it’s likely one of the most sure ways to build wealth. The numbers above highlight just how many people are taking advantage of selling on Amazon’s marketplace and a great portion of them make six and seven figures each year. Now that you’re familiar with the opportunities associated with selling on Amazon, we can explore what you need to get started and what you should expect in your journey.
