Is selling on Amazon worth it in 2024?
Yes, selling on Amazon is still worth it. In 2023, Amazon was the most visited ecommerce marketplace globally. That means selling on Amazon can get you the kind of brand visibility you won’t find anywhere else.
In fact, according to research by Jungle Scout, 56% of consumers across all generations begin their product searches on Amazon—it’s almost as though Amazon is its own search engine.
People begin their product searches on Amazon more often than on social media sites like YouTube or Facebook, other online retailers like Walmart and Target, or a search engine like Google. So, if you want to get eyes on your products, Amazon is the place to be.
Source: Jungle Scout
Can you actually make money selling on Amazon?
Yes, you can make money selling on Amazon. In fact, most Amazon sales come from independent sellers. According to Amazon, 60% of its sales come from third-party sellers—generally, these are small and medium-sized businesses.
Let’s take a look at the stats of how much Amazon sellers make in sales revenue. 40% of Amazon sellers sell anywhere from $1,000 to $25,000 a month. 30% of Amazon sellers make more than $5,000 every month, and a further 31% make less than $500 a month in sales.
Many factors will impact your net profit, like product fulfillment cost and extra expenses like FBA fees. But the most important factor will be your selling price.
Make sure you’re smart about your profit margins. A healthy profit margin is estimated from 15%–20%, but if you go below 8%, you might end up hurting your business in the long run.
Valuable read: How to Make Money on Amazon: 5 Best Ways
What is the success rate of Amazon sellers?
New sellers who choose to start an Amazon FBA business have a pretty good chance of succeeding. 64% of new Amazon sellers start to make a profit during the first year of running their store. Typically, Amazon sellers will become profitable within 3–6 months, with only 2% of sellers taking more than 2 years to turn a profit.
So, if you’re still wondering—is selling on Amazon worth it? The answer is a resounding Yes. Whether you become an Amazon FBA seller or sell products with print-on-demand, you have a high chance of becoming profitable within your first year.
But, remember that everything depends on what and how you sell. It’s important that you do your research and find a niche that isn’t oversaturated with sellers. And it’s equally important that you know the pros and cons of selling on Amazon, and learn how to make the most of the opportunities that the Amazon marketplace offers.
Pros of selling on Amazon
Alright, we’ve gone over some of the big questions. But what are the actual advantages if you decide to start an Amazon store? Let’s go through the main benefits of doing business on Amazon’s platform.
Large built-in audience
First and foremost, Amazon has the kind of audience and reach you won’t find on other ecommerce platforms. While it’s hard to determine the exact number of users because Amazon doesn’t release detailed stats about its online shoppers, it’s estimated that the ecommerce giant has around 310 million users globally.
Plus, over the past month, the Amazon marketplace received around 2.3 billion visits, making it the most visited ecommerce site according to Similarweb. This means that if you start selling on Amazon, you’ll have access to a loyal built-in audience, and you might be able to get eyes on your products without spending a ton of money on marketing campaigns.
No hassles with logistics
Logistics can make or break your Amazon business, even if you’re selling a high-quality product. That’s why working with Amazon FBA or a print-on-demand provider like Printful can make things much easier for you.
Having someone take care of product manufacturing, customer service, as well as packing and shipping products will allow you to focus on business operations and your selling plan. It’ll also significantly decrease your business expenses—you won’t need to pay for a warehouse or hire extra staff for stock management or customer support.
Global shipping
Another big plus for selling with Amazon FBA is the global reach your store will have because of Amazon’s large supply chain. As an Amazon FBA seller, your products will automatically be eligible for Amazon Prime free two-day shipping, and your shipping costs will be lower.
Fast shipping will be a major bonus for your business—studies show that customers increasingly expect quick shipping times. One study found that when online shopping, 62% of consumers expect their free shipping orders to arrive within the next 3 days.
Cons of selling on Amazon
As a new seller, you’ll inevitably run into some setbacks. Let’s go over some potential drawbacks of selling on Amazon that you need to keep in mind when you’re just starting out.
Expensive service fees
If you’re new to the ecommerce game, you need to be mindful of Amazon fees that come with selling your products on the platform—they can really stack up and eat into your profits.
When starting your Amazon selling journey, you’ll first need to choose a seller plan—most sellers opt for the Professional selling plan, which offers more ecommerce options and costs $39.99 a month. You’ll also have to pay referral fees for every item you sell. Head over to Amazon Seller Central to learn more about Amazon selling fees.
If you plan to sell with Amazon FBA, there are various FBA fees to consider in addition to the selling charge and referral fee. You’ll have to pay shipping fees, fulfillment fees, a monthly inventory storage fee, inventory removal and disposal fees, and more.
Intense competition
Another challenge will be the intense competition. Because Amazon is so popular, everybody wants a piece of the ecommerce pie, so you’ll have to work hard to stand out.
Amazon doesn’t release specific numbers on how many merchants sell on the Amazon website, but it’s estimated that the number could be around 9 million sellers. To put things in perspective—Shopify, a popular ecommerce platform, hosts roughly 2+ million merchants, while Etsy, another ecommerce giant, has just around 7 million sellers. What does this mean? You’ll have to work extra hard to get noticed on Amazon.
How can you make your store stand out? You can start with finding a solid niche for your brand. This will make your products worth selling. If you’re not sure how to find your niche or build a strong brand, you can check out our Printful Academy course on how to build a brand for your business.
Amazon FBA inventory requirements
The Amazon FBA program will make your life significantly more manageable in the sense that you won’t have to think about shipping and customer service. However, you’ll have to adhere to Amazon’s requirements when sending your products to their warehouses.
This can get tricky—you’ll have to make sure your products are packaged, labeled, and shipped according to Amazon warehousing guidelines. If this sounds like it might be too time-consuming for your taste and you don’t want any hassle managing your inventory, you should opt for a third-party print-on-demand provider like Printful.
Like Amazon FBA, working with Printful will give you access to international order fulfillment and customer returns. But, since Printful prints, packs, and ships out all orders in-house, you won’t have to go through the extra step of sending your products to an Amazon warehouse.
Who is selling on Amazon best for?
Amazon will be great for sellers who want to conduct multi-channel business because the platform offers great options for cross-channel selling. For example, Amazon’s Multi-Channel Fulfillment allows you to sell your products in off-Amazon channels like BigCommerce or eBay, while still using the Amazon fulfillment network.
Source: Amazon
So, you can easily run your own website powered by an ecommerce platform and still sell on Amazon as your secondary channel.
