Jungle Scout surveyed 1,046 Amazon sellers. We analysed the data to determine: is Amazon FBA worth it?
What is Amazon FBA?
FBA stands for fulfillment by Amazon. As an Amazon seller this means that you send your product directly to Amazon’s warehouse to be shipped directly to the customer. Amazon takes care of the customer support side of things whilst you are able to focus on the business.
There is another method of Amazon selling known as Fulfilment by Merchant (FBM). This method of selling means that the seller handles the shipping, customer support and storage of their products.
How does the Amazon fulfillment process work?
- You send your products to Amazon which they store in one of their fulfilment centers.
- Your products are stored until a product is sold.
- When a customer places an order, Amazon staff then picks and packs your products and sends it off to the customer.
- When the product arrives with the customer, Amazon follows up with the customer and makes sure everything is ok with the order. Amazon speak to the customer directly.
Is Amazon FBA profitable for sellers in 2020?
The short answer is yes. According to Jungle Scout, Amazon sellers are earning between $26,000 – $810,000 a year in profits.
How much money do Amazon FBA sellers make?
74% of Amazon sellers earn more than $1,000 a month in sales. A massive 39% of Amazon sellers make more than $10,000 a month in sales.
How easy is it to make money as a seller with Amazon FBA?
Selling on Amazon takes time and effort and is not a “get rich quick” tactic. If by asking is Amazon FBA worth it we meant would the time and money invested make it easy, this is not necessarily the case.
Making a sizeable profit is possible with Amazon FBA, however you must be prepared to:
- Spend time completing correct product research.
- Invest in your product inventory, fees and promotion.
- Use the right tools to analyse your products, your competitors and your audience.
How much time does it take to become an Amazon FBA seller?
According to Jungle Scout’s State of Seller report, 60% of sellers got their Amazon businesses off the ground within 3 months.
| Time taken to make first product live | Percentage(%) |
| Fewer than 6 weeks | 35% |
| 6 weeks – 3 months | 25% |
| 3 – 6 months | 19% |
| 6 months – 1 year | 13% |
| More than 1 year | 6% |
| I don’t know | 2% |
How much Money do Amazon FBA Sellers Make?
What are the FBA fees?
- For selling on Amazon, Amazon charges a 15% referral fee on all sales in most product categories.
- Amazon charges a fee to cover the cost of shipping and handling your products.
- Categories such as books have an additional flat fee.
- If your products are kept in the Amazon fulfillment center for too long, they will charge you a long term storage fee.
Benefits of being an Amazon FBA seller
- Sellers can transform their lifestyles by being able to work from anywhere in the world.
- Compared to other small businesses and startups, Amazon sellers are twice as likely to be profitable.
Disadvantages of being an Amazon FBA seller
- With Amazon launching more of their own product ranges each year, often sellers have to compete with Amazon itself in the marketplace.
- There has been a rise in recent years of numerous “Black hat” Amazon sellers, these sellers have been known to hijack sellers listings.
Is Amazon FBA Worth it?
If you are interested in making money online without the hassle of dealing with customers, managing staff or looking after the operational side of your business then starting as an Amazon FBA seller could be an ideal way you could start making money online. 43% of Amazon FBA sellers are making lifetime profits of over $25,000. However 38% of sellers are making under $25,000. They key to being successful and profitable with Amazon FBA, is to ensure you have enough time, money and energy to invest in the right tools and the right product.
