“How much can I make if I started selling on Amazon?”
“What is FBA seller’s average income?” According to Amazon’s report and surveys done by different companies, an average FBA seller makes between $1000 to $25,000 a month in sales. With an average profit margin of 10% – 20 %, an Amazon FBA seller can make between $100 to $5000 a month.
Although average statistics are indicative, they do not show much value when you need to find out about how much you can make in your own situation. To better help you find more accurate income information, I have picked the three most common types of sellers and conducted interviews within my own seller network. I have presented the findings here in this blog.
The three most common types are :
- 1) The husband/wife team
- 2) Small business with a dedicated team
- 3) The lone seller who works during the day
These three types of sellers consist of the majority of Amazon FBA sellers. They all have been selling for at least longer than one year.
|Seller||Store Age||Team Size||Monthly Revenue||Profit||Gross Profit Margin|
The Detailed Breakdown
Seller A – The husband/wife team
|Category||Fashion & Shoes|
|Team Size||2 Full Time + 2 Part Time|
|Average Monthly Revenue||~$80,000|
|Est. Monthly Gross Profit||~$19,000|
|Time to first Profitable Month||9 months|
Seller A started in 2018 in the highly competitive fashion category. As a husband/wife team they first started the amazon business as a side job. The wife was in charge of product selection and the husband took care of procurement and selling.
They skipped FBM and went straight to FBA. For the first several months their biggest challenge was taming with product returns as they can be as high as 30% (This should be only applicable to the fashion category). With a few rounds of improved photography and infographics, combined with carefully selected designs, they were able to make a profit for the first time after 9 months.
Biggest Obstacle To Profitability: Didn’t spend enough time on product selection in the beginning, could have avoided wasting PPC budget on non-converting products.
Seller B – The Retailer
|Team Size||5 Full Time|
|Average Monthly Revenue||~$400,000|
|Est. Monthly Profit||~$55,000|
|Time to first Profitable Month||15 months|
Seller B is a retailer-turned-seller. Before 2017 they had a small storefront in a public market selling bedding products. The owner discovered Amazon and started selling their own brands. Their first year on amazon was rough because they were selling generic bedding products and tried to compete with low prices. Shipping and handling of bedding products was also a gigantic issue as they started out as FBM.
The profit margin was simply not enough to support their amazon effort. After a few pivots, the owner decided to go with FBA and picked a more profitable niche within the bedding category. Slowly they were able to get more sales. They spent a lot of effort into making sure their products are of the best quality offered for the price range.
With slow but steady 5 star reviews on the quality and customer service, they eventually got profitable after 15 months. The owner then decided to go full time and closed their storefront and used the money to invest in more products. With the added budget, the seller grew very fast and is now selling at around $400,000 a month. The COVID19 situation hasn’t impacted his business much.
Biggest Obstacle To Profitability:
1. Didn’t figure out packaging from the beginning – they could have been profitable a lot sooner, but because they had packaging issues, the FBA fee was way too much to allow any profit.
2. Got into price war too early – B tried to use the low price to sell more products in the beginning but so did his competitors. Initially, B got a ranking boost but quickly his competitors followed suit. He gave up after 2 months of selling at a lower price, the ranking of the product improved a bit but not much. It did, however, got his listings into the first page. But it can be done for much less money and a shorter time frame.
Seller C – The part-time one man band
|Category||Outdoor Sports Accessory|
|Team Size||1 Full Time + 1 Virtual Assistant|
|Average Monthly Revenue||~$7000|
|Est. Monthly Profit||~$1000|
|Time to first Profitable Month||6 months|
Seller C is a part-time seller who does Amazon FBA on the side. He picked the outdoor sports accessory niche category as most of them are high in price and small in size, making it perfect for a small FBA Business.
Seller C spends most of his time analyzing his competitors and identifies areas to improve. But because it is the outdoor equipment niche, being his size, he has no bargaining power to ask the factory to make modifications of the product he wants. He later found a way to include more parts/accessories to stand out from his competitions. He also leveraged Facebook groups heavily to get his first round of much-needed reviews.
Biggest Obstacle To Profitability: As a one-man band, it was very difficult to get products at a competitive price, this makes his profit margin much thinner than other professional sellers. The suppliers he works with also didn’t give him much attention or priority due to the size of his orders. This is particularly bad when things are going well and becoming out of control, he just can’t get his products at the time he needs them the most. Out of stock (OOS) is a very common issue for him in the beginning. He wasn’t able to fix this problem so he decided to order more at a time to prevent OOS issues down the road. This became less of a problem when he later had the volume and the cash flow.
How to find out any seller’s monthly revenue
If you are curious about how much a seller or your competitor is making, there are a few easy ways to find out an estimated figure. You would need a sales estimator, both HELIUM10 and JungleScout offer browser plug-ins that are very easy to use.
- Install the browser plug-in offered by Helium10 or Jungle Scout
- Go to any listing offered by the seller, then click on the seller’s name
3. Proceed to click “Seller Name” Storefront
4. This will load every product this seller has to sell under this site. When the page is fully loaded, activate the sales estimator plug-in (Helium 10 Product Research Plug-In shown below )
5. You can do a manual addition or download the data into an excel sheet for further analysis.
Note: Sales data gathered this way is usually the best guess provided by the plug-in makers, they can be off by 10% to 30%.