Is Selling on Amazon FBA Still Profitable?
Amazon is the dominant e-commerce platform in the US. It’s projected to become a $1 trillion company by the end of 2021, with sales growing 27.6% year-over-year.
Amazon is one of the best places to sell online and here are some convincing stats:
Amazon has 310 million active customer accounts
68% of all households in America are Amazon Prime members
Over 175M people visit Amazon every month
Amazon’s revenue was a whopping $386 billion in 2020, up from $280 billion in 2019
Sellers have increased their selling on Amazon by 25% for the past six years
92% of them use Fulfillment by Amazon (FBA) to manage their Amazon business
62% of consumers start their product searches on Amazon
How much do FBA sellers make?
The Amazon FBA business is still profitable, though as always, it is entirely dependent on the seller.
Amazon seller profits are highly dependent on the product that is sold. Competition and demand have a lot to do with profitability, as well as the ability to sell at a price that consumers are willing to pay for.
The vast majority of Amazon sellers make very little money. However, 50% of Amazon sellers bring in more than $5,000 in sales per month, 25% of Amazon sellers bring in more than $25,000 in sales per month, 50% of Amazon sellers have reached over $50,000 in lifetime sales, and 19% of Amazon sellers have earned over $1 million in lifetime sales.
Amazon FBA Pros and Cons
Pros
If you’re planning on selling your product on Amazon, you should do so through Fulfillment by Amazon (FBA). There are several reasons why this is the most cost-effective program to use:
- FBA takes care of logistics: FBA takes care of shipping, storage and even returns for you. This means you can focus on other areas of your business, such as marketing and making a great product.
- Prime shipping: With FBA, you can get your products shipped to customers within two days of them placing their orders. This keeps you far away from the “shipping bottleneck” that many ecommerce businesses face.
- Access to target market: FBA involves some upfront cost, but it also gets you access to Amazon’s extremely loyal customer base — they spend more than twice as much per year as any other group of online customers.
- Highest-grossing marketplace in the world: As a seller on Amazon, your sales are going to be at least double what they would be on eBay or another website — with the added benefit that they are guaranteed to increase over time.
- Lower risk: Since Amazon handles the fulfillment process itself, there is much less risk involved than if you sell in
cons
1: Amazon FBA is a lucrative business model. However, there are many factors that affect the profitability of your business.
2: Storage fees
3: FBA fees
4: Easy for customers to return items:
Still confused read our article on amazon fba how to start
