New Amazon sellers are earning an average of nearly $30,000 in annual profits. What does it take to start selling on Amazon, and what can new sellers do to ensure they are profitable this year?
49% of new Amazon sellers cite a desire to “be their own boss” as the top motivator to use the platform. Additionally, 38% of new sellers are looking for extra income to supplement their existing income. Many are also searching for flexibility to work from any location or to travel the world while more than a third want to feel successful or accomplished.
Whatever the reason for selling on Amazon, it’s the primary income stream for many.
How much do Amazon sellers make?
Though there are a number of different methods for selling on Amazon, the 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 more than $100,000 each month in sales.
- 50% of Amazon sellers make $1,000 to $25,000/month, which could mean $12,000 to $300,000 in annual sales.
- 13% makes $25,000-$250,000/month, amounting to annual sales between $300,000 and $3,000,000.
- 22% of sellers make under $500/month in sales, and 3% don’t know their monthly sales.
|Monthly sales||Percent of sellers|
|$1,001 – $5,000||27%|
|$5,001 – $10,000||13%|
|$10,001 – $25,000||10%|
|$25,001 – $50,000||8%|
|$50,001 – $100,000||4%|
|$100,001 – $250,000||1%|
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.
Nearly a third (30%) of SMB Amazon sellers have reached lifetime sales of over $100,000:
- Under $25,000: 43%
- $25,001-50,000: 11%
- $50,001-100,000: 10%
- $100,001-500,000: 14%
- $500,001-1,000,000: 6%
- $1,000,001-5,000,000: 7%
- $5,000,001-10,000,000: 2%
- $10,000,001-50,000,000: 1%
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. Small companies often struggle to achieve profitability in their first few years, but Amazon SMB sellers see healthy profit margins.
- Nearly two-thirds of sellers (65%) see profit margins higher than 10%.
- Better still, 32% see profit margins above 20%.
- On the other hand, 8% said their businesses are not yet profitable, and 8% did not know.
|Profit margin for SMB sellers||Percent of sellers|
|Not currently profitable||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?
One in five SMB sellers has reached lifetime profits of more than $50,000 — not bad for what many start as a “side hustle” — and 14% have lifetime profits over $100,000.
- Under $25,000: 58%
- $25,000-50,000: 7%
- $50,001-100,000: 7%
- $100,001-500,000: 9%
- $500,001-1,000,000: 3%
- $1,000,001-5,000,000: 1%
- $5,000,000-10,000,000: 1%
- Not yet profitable: 6%
- Don’t know: 9%
14% of Amazon SMB sellers achieve lifetime profits over $100,000
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 (64%) said they were profitable within the first year of selling.
- Profits within 3 months: 21%
- Profits within 3-6 months: 24%
- Profits within 6 months-1 year: 19%
- Profits within 1-2 years: 11%
- Profits within more than 2 years: 2%
- Don’t know: 5%
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 Amazon sellers spent no more than $1,000 to start their businesses. Overall, most sellers (69%) spent less than $5,000 to get started selling on Amazon.
- Sellers spent less than $500: 17%
- $500-1,000: 15%
- $1,001-2,500: 19%
- $2,501-5,000: 19%
- $5,001-10,000: 16%
- More than $10,000: 13%
- Don’t know: 2%
What is that money spent on? Typically, initial costs include sourcing your product (including samples), Amazon fees, and promotions.
And where does that money come from? An overwhelming number of sellers (82%) are bootstrappers, funding their entrepreneurial endeavors with their own cash. A smaller portion of sellers (22%) borrowed money from banks, family, or other lenders.
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 (64%) spend fewer than 20 hours per week.
- Fewer than 4 hours per week: 16%
- 4-10 hours: 28%
- 11-20 hours: 20%
- 21-30 hours: 13%
- 31-40 hours: 12%
- 41-50 hours: 6%
- 51-60 hours: 3%
- More than 60 hours: 4%
More than three-quarters (78%) of sellers were also able to launch their businesses within 6 months.
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.
3. Will selling on Amazon be profitable in 2022?
Nearly all sellers (90%) had planned to continue selling on Amazon in 2022, and 82% are optimistic that selling on Amazon will be a viable way to make money online in the future, compared to 63% who said the same last year.
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.
While 8% of SMB sellers 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%: 19%
- Profit margin 11-20%: 33%
- Profit margin 21-50%: 29%
- Profit margin 50+%: 3%
How new sellers could start making nearly $30K/year on Amazon
SMB sellers are making an average* of $11,671 in sales each month — or $140,052 in sales per year.
Considering the average profit margin of SMB sellers, 21%, new sellers are averaging $2,451 per month or $29,412 in annual profits.
And for the 29% of sellers with profit margins of 21% and higher, they could be taking home monthly profits upwards of five figures and beyond.
New Amazon sellers are earning an average profit of nearly $30K 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.
If you’re ready to start selling on Amazon, consider signing up for IntellectSoft ! Join IntellectSoft Amazon Team on a limited bootcamp course designed to get you up and running as a seller on Amazon.