Amazon has provided millions of sellers with the opportunity to build a real, sustainable business. The salary of the average seller on Amazon can vary greatly. With millions of sellers on the platform, it’s hard to get an estimate of how a new Amazon seller will perform on the market. Below we will explore the average salary of Amazon sellers and what factors can influence the salary.
Average Salary of Amazon Sellers:
The average salary for Amazon sellers is roughly between $26,000 and $81,000; the job site Indeed states that the average salary is approximately $44,632. This number is an estimated average that doesn’t account for years of experience, actual profit, etc. It’s likely calculated by taking the total number of sales made by sellers on Amazon and divided by the total number of Amazon sellers. There are a ton of factors that influence the take home pay of Amazon sellers, we’ll explore that below later.
There are over 140,000 sellers on Amazon that make $100,000 or more annually in sales. Every year when Amazon announces its numbers, this is the number I always look at first. This is because most Amazon sellers start their business, so they can quit their job or supplement their income. If there are 140,000 people who can make six figures on Amazon, you can be the 140,001th person.
People often don’t understand how powerful Amazon’s ecosystem is. Many people try to start side hustles with no proven track record of success. If all you are basing your efforts is off a story of one person, the likelihood of you succeeding is slim to none. Amazon provides sellers with a proven system to start and grow a business to six figures and beyond. What other business in the world can help sustain six figure incomes for over 140,000 people?
What factors influence the salary of an Amazon seller?
Amount of time worked on business: The actual time that an Amazon seller has spent on their business is likely the most influential factor in determining their business. A brand new seller cannot compare with most seasoned sellers who have been selling on Amazon for many years.
The average profit for first year full-time brand new sellers is about $26,000. Smallbiztrends.com did a study and found that salaries ranged from $26,000 to $810,000 per year. You can see from the huge range in income that time and experience can literally multiply a seller’s salary.
Reinvestment: In addition to time, the amount of money invested and reinvested in a business is a huge factor in sales. If a new seller makes $100,000 and consumes the entire revenue, they will be at square one again with all the new sellers. Sellers will quickly realize that you need money to make money on Amazon. Most successful sellers don’t actually pay themselves until their business has reached a certain scale.
Business model: When Amazon sellers first start out selling on Amazon, they generally do retail arbitrage or online arbitrage. This is because there’s not much money needed to start that kind of business model on Amazon. Other business models like wholesale and private label require thousands of dollars and knowledge of what you’re doing upfront. The payoff is also better with these business models.
Are there retail arbitrage and online arbitrage sellers who make millions every year? Yes, but there are more sellers that do wholesale and private label at that scale. If you are good at one specific business model, you can reach huge scale. It’s just more proven with private label and wholesale to get from six to seven figures in sales.
How long will it take a new seller to reach $100,000 in sales?
The vast majority of sellers are not looking to make $100 million in sales each year. Many sellers would be more than content to make $100,000 in sales per year. Assuming you’re starting off as a new seller, it will likely take you 1-3 years to go from $0-100,000. If you actually dedicate time and money into your business you can honestly reach it within the first year and a half.
Most people have full-time jobs and do Amazon on the weekends and evenings. There are many sellers who have reached $100,000 in sales on part-time hours. In order to succeed on Amazon, you will have to invest money and time. There’s no way around that. Sellers who start off with more money have more leverage and can afford to make some mistakes. If you are a new seller, I’d recommend starting off with $500-$1,000 at least. If you spend that much on good inventory, you’ll likely see growth and can turn that into more money.
With doing this consistently over a year, it’s very possible to scale to $10,000 per month in sales. You will have to average that for 12 months to get well over the $100,000 mark. Certain periods of the year like Amazon Prime Day and Q4 will allow you to see huge sales numbers. It’s important to prepare for those periods to maximize your sales and profits. You will likely run out inventory during those times.
The future for the salary of Amazon sellers looks extremely bright. This is because sellers make up over 50% of all sales on Amazon. As Amazon grows, the sales for sellers on Amazon will also grow. Amazon is quickly expanding in the retail market and that is great news for sellers. Currently, Amazon has about 10% market share of the U.S. retail market and 1% worldwide. Over the next decade alone, Amazon can double or triple their market size in retail.
This is huge for sellers because they will need to help Amazon meet the demands of new customers that will be acquired. Amazon relies on 3rd party sellers to help meet customer demand because they simply cannot service all of their customers. As Amazon grows, the percentage of sales that sellers make on Amazon will grow. Currently, sellers make up just over 50% of all sales on Amazon. It’s very likely that the percentage can be 60% or higher in the next few years.
Although all of these numbers are promising, what does that mean for you? It means absolutely nothing if you’re not going to take action and start building your business now. Many sellers make the excuse that if they started Amazon a few years ago, they’d be millionaires now. You can’t do any of that without actually starting and making your first sale. Take the initiative now and start your Amazon seller application today. I’ve linked a guide here on how to do it and what mistakes you can avoid.
As you can see, there are hundreds of thousands of people making six figures or more on Amazon. The average salary of Amazon sellers will continue to rise as Amazon gains more market share in the U.S. and global retail markets. Sellers who capitalize on this opportunity can build six and seven figure businesses over the next decade.
The goal of selling on Amazon is not to get a salary. It is to build a sustainable business that can support you for the foreseeable future. Although these numbers are exciting, you need to make it a reality for yourself. Start today by applying to sell on Amazon and learn how selling on Amazon works. Set small goals for yourself and slowly grow your business. Within a few years, you will have a thriving business that can support you or you can choose to reinvest your profits for more growth. I’ve linked a guide to the Amazon seller application here. Get started today and build your Amazon business.