Is It Profitable to Sell on Amazon in 2020?

Reliablecounter Team

If you have heard about the speeding e-commerce train and you’re considering whether to jump on it or not, read our article and determine whether it is worth it.

Many people sell on Amazon to earn that extra cash for holidays, depths, or to support their loved ones, but in 2020, most sellers use Amazon as their primary source of income. Many sellers started their business on Amazon just to earn a few extra bucks. Still, after some time, they figured out that Amazon is undeniably an excellent way to make money. 61% of Amazon sellers declared that their income significantly increased in 2019, and most of them plan to continue selling on the most prominent e-commerce platform.

How much do Amazon sellers actually earn?

There are multiple different selling models on Amazon, but the far most popular one is the FBA (Fulfillment by Amazon) selling program. Sellers have to pay additional costs related to this selling method, but that way, Amazon will handle all tasks related to the order fulfillment, and still make a significant profit. Use IO Scout Amazon FBA calculator to calculate the product revenue and Amazon fees, this tool is completely free.

The average monthly sales

The average monthly sale amount depends on several factors, and some sellers earn around $1,000 per month, while others make up to $250,000 each month.

  • Half of the sellers earn between $1,000 and $25,000 per month.
  • Every five seller earns $25,000 to $250,000 per month.
  • Only around 20% of sellers earn less than $1,000 per month in sales.
  • Around 2% of sellers aren’t aware of their monthly sales.

How much Amazon sellers profit?

The higher the profit margin, the better, but some companies often fight to reach profitability at all in the first few years of doing their business. On the other hand, others obtain high-profit margins.

  • Almost 70% of sellers have profit margins above 10%.
  • Around 20% of Amazon sellers have profit margins higher than 20%.
  • Less than 10% of Amazon sellers declared that their business is still in the development process, and it still isn’t profitable enough.

How much money Amazon sellers earn over time?

Almost half of all Amazon sellers earn a lifetime profit higher than $250,000. This is actually not a bad number since most sellers at first start selling on this platform just to gain an extra income.

  • Around 38% of sellers have lifetime profits under $25,000.
  • 13% earn up to $50,000.
  • Around 8% of sellers earn up to $100,000.
  • More than 12% of them have a lifetime profit of up to $500,000.
  • More than 3% of sellers have $1,000,000.
  • Around 7-8% of sellers earned between $1,000,001 and $10,000,000.

How much time will pass before your business becomes profitable?

Most of the Amazon sellers declared it took around one year for their business to grow and become profitable.

  • Profits earned within three months – 22%
  • Within 3 to 6 months – 22%
  • Gains within six months to 1 year – 23%
  • Profits within 1 to 2 years – 13%
  • Profits earned within more than two years – 3%

Sellers with less experience often need more time to obtain the profit, but they manage to do that within a year or two.

 

How much time do you need to invest in Amazon selling business?

In case you’re ready to start selling on Amazon, but you have a full-time job, you probably asked yourself how much time you need to invest in your business. Amazon sellers don’t spend too much time dealing with their selling business. Most of them spend less than 30h per week.

  • 13% of sellers spend less than 4 hours in one week
  • 24% spend around 4 to 10 hours
  • 20% of sellers spend 11 to 20 hours per week
  • 15% of them spend more than 20 hours, but less than 30h per week
  • 10% spend from 31 up to 40 hours in one week
  • 9% of them spend between 40 and 50 hours
  • 3% of sellers spend around 50 up to 60 hours per week
  • 6% of sellers spend more than 60h on their Amazon selling business.

Most sellers invest more time when they are just starting, and later when they discover profitable products to sell and the right niche for their business, they just tend to maintain their businesses.

IO Scout offers great solutions for Amazon sellers, IO Scout Product Tracker will help you find rockstar products with high-profit margins and low competition. You will also be able to discover new profitable niches and find gaps in the market to earn even more profit.

Solutions like IO Scout will help newbies become real professional sellers and obtain profitable selling business on a dime. It’s created for all selling models, and it’s also suitable for professionals.

 

Final thoughts

Aldo selling on e-commerce platforms isn’t a new discovery, and the competition is quite fierce these days, you can still become successful. Amazon, the biggest worldwide selling platform, represents a large marketplace with a global audience, and there is always plenty of room for anyone ready to make it big.

Be ready to invest a lot of your time, effort, and money at first, but it will definitely pay off, and eventually, you won’t need much effort, but your selling business will constantly draw you more profit. We recommend leveraging software solutions like IO Scout, especially if you’re a newbie in Amazon selling business. Still, IO Scout offers excellent solutions for real professionals, and the data that you will gain insight into will be precious for your strategic decision making.