I will never forget my first Christmas as a full-time online seller in 2013. By that time, I had already earned the majority of the $ 7,918.04 in profits I received from Amazon that month.
Even better, over $ 7,000 of those profits came from FBA sales, and I enjoyed taking time off December 22-27 to spend time with family.
I had just quit my accounting job to experiment with selling full time online 3 months earlier in late September and I had never imagined I would see numbers so high so fast. The fact that it was the 4th quarter certainly helped, but my Amazon sales only continued to grow from there.
I am writing this at the end of September 2021, almost a decade since I made the life-changing decision. My company now sells millions every year on Amazon and has unlocked benefits that I had not even anticipated at the time.
I get a lot of questions from people wondering ‘how much can you make on Amazon’ and if the things I did to build my business would still work now.
The short answers to these questions are that you can make a lot of money on Amazon and that the strategies I used to start from scratch still work very well. The guide below will go into more detail.
How Much Money Does Amazon Seller Make?
In Jeff Bezos’ letter to shareholders in 2020, he said
“We have an internal team (Selling Partner Services team) working to answer that question. They estimate that the third-party seller’s profit from selling on Amazon in 2020 was between $ 25 and $ 39 billion, and to be conservative here, I would go with $ 25 billion. ”
A third-party seller is anyone who sells on Amazon other than Amazon itself. These can be big brands or independent sellers like you and me offering new, used, refurbished or collectibles on the Amazon marketplace. Third-party sellers make up over half of Amazon’s marketplace.
As a whole, third-party sellers make billions of dollars using Amazon. But that does not tell the whole story. These billions in profits are shared by millions of sellers. There are third-party salespeople who make millions a year, and there are others who do not make money at all.
In fact, some sellers are losing money!
How much do I earn on Amazon?
So now let’s look at my business.
We sold products worth $ 6,507,690 on Amazon in 2019. 2019 is the latest data I could easily get in connection with this post.
In an average month, we sell over $ 450k in products. However, this figure increases significantly in the 4th quarter.
There are many people who earn much more than us, and there are many who earn less. The wide range of potential results has a lot to do with your goals and the strategies you apply.
My goal was to fully replace my accounting job, so I worked hard to scale my business to the level it is at today.
How much does the average salesperson earn?
In a 2019 letter to shareholders, Jeff Bezos said “Amazon’s third-party sellers are” kicking our first party lot “and that average annual third-party sales were around $ 90,000.
Remember that the average in annual sales is not the same as profit. Although everyone wants a different profit margin, let’s assume that the average profit margin is 30%.
This would mean that third-party sellers on Amazon have, on average, about $ 27,000 a year in profit.
Remember, this means that there are many people who earn both more and less than that number. In my experience, it is very possible to get above average results by applying the right strategies at the right time.
How do you get above average results on Amazon?
Selling on Amazon is not a guaranteed path to wealth. There is work to be done and if you want to make money, you need to run your business as a business.
Selling and succeeding on Amazon is not a scheme to get rich quick. There will always be the outlier that tells you differently, but the norm is that a consistent and stable business strategy is necessary for success.
In my opinion, results above average on Amazon largely come from consistently making simple decisions that can be difficult at the moment. The reality is that selling on Amazon successfully is not rocket science, there are proven methods that work if you follow them.
Now let’s talk about a few details.
The first is to purchase consistently and ideally for a minimum of hours each week. It is an easy decision to decide to procure inventory 10 hours a week, but it can be more challenging when you do not find as much inventory as you had hoped. But if you stick to these times and keep up with your processes, good results will follow.
The second is to reinvest as much of your profits as possible in more inventory. The more you reinvest in inventory, the faster your business will grow.
Again, this is a simple concept, but spending the money on a beer with friends may seem more appealing at the moment. If you set a goal of reinvesting all profits back into your business for 6 months, you will be much longer in terms of taking money out along the way. I know it is not always possible to reinvest all profits, but the more you can do, the better you will get.
The third is to be willing to make mistakes. When getting started with a new venture, there are plenty of unknowns. There will be many times where you are faced with a choice of buying an item to resell or leave it.
In the early days, as long as it is comfortable within your available capital, I recommend buying it to test it. Not all of these items will be profitable, but some will, and that will lead to knowing what to do in the future.
Being able to act based on first-hand experience leads to much better decisions in the future. Giving yourself the opportunity to make mistakes from time to time can open up opportunities for your business that you would never find if you did not try it.
I’m telling you this because I remember how much time I would spend in the early days agonizing over decisions because I was worried I might lose money. If you are worried about mistakes, spend as much time learning from the mistakes of others as possible, and then make the best decisions you can at the moment. Try not to be perfect.
Learning from mistakes is one of the main ideas behind this site. I have been experimenting and trying new strategies for years and then passing on what I am learning to my subscribers and students. You will find lots of free content in this direction here on the blog, and the best way to make sure you do not miss anything new is to subscribe to my free eCommerce Insiders group.
If you’re interested in really accelerating your results, the Complete Arbitrage Playbook shows you how to make your first $ 1000 by selling online, and then build a business that increases your income and frees up your time. It is based on my experience of doing the same.
Does this actually lead to better results?
There are no guarantees, but in my experience, people who apply the things I talked about above often come up with better results than the “average” we looked at above.
We offer a range of training programs to help people start a successful online sales business, from free courses to a top coaching program that gives my clients full behind-the-scenes access to my business, including a personal conference in my warehouse where we literally literally, people lead through every process we apply.
Among the people who have gone the distance and reached the coaching level, achieving millions in sales has been the normal result within just a few years. Since these programs reliably generate results that far exceed the “average”, I feel pretty good about recommending them as a way to get started or as a path to follow.
Step 1: Do you have questions?
Use the comment field below if you have questions or want to share something.
Step 2: Ready to unlock “above average” earnings on Amazon?
If you are interested in starting the path to above-average Amazon earnings, I recommend checking out this free program on the basics of a successful online sales business. In it, we will take a closer look at the principles and strategies that go into making more money and gaining control over your schedule by selling things online.
Step 3: Further reading …
Here are some other posts you like: