How Much Can I Make Selling On Amazon? Selling on Amazon – Simplified

How Much Can I Make Selling on Amazon

Have you found yourself asking the question “how much can I make selling on Amazon?” often? Want to try your luck at selling on Amazon?

You may have all come across headlines and social media stories about people and brands making big bucks by selling on Amazon, but what returns can you expect by becoming an Amazon seller?

Keep reading to get all the answers.

Amazon is undoubtedly the biggest and the most powerful online retail platform in the world. The platform is expected to capture a whopping 50% share of the entire global e-commerce market by 2021. It attracts nearly half of all online product search traffic and more than 70% of all US consumers have shopped on Amazon in the last 6 months.

Needless to say, Amazon is the leader in online sales, with no signs of slowing down. It sells everything from shampoo to lamps to high-end electronics. When consumers land on Amazon.com, there’s a high chance that they will pull out their credit card.

As a budding internet entrepreneur, you should definitely be interested in Amazon. You can leverage its power and reach to make your business pick up pace easily.

The best part about selling on Amazon is that there’s no need to create a website or an online store. Sure, you will be required to pay some fees to Amazon, but in return you will have your items displayed to millions of customers all over the world.

How Much Can I Make Selling on Amazon?

Until 2015, there were over 2 million sellers (let’s take an estimate of 2.25 million) on Amazon and Amazon took $22,993 million as seller fees.

Looking at these numbers, if we factor fees at 10% of the total sales, we can say that there were a total of $230 billion annual third party sales on Amazon. This figure divided by 2.25 million is $115,000, which is the average annual turnover for a third party Amazon seller. However, this is just a rough estimate of the average earnings of an Amazon seller.

The truth is that there’s no fixed number. If you’re just coming to the market, it will definitely take some time before you make it big. You may start from, say, $20 a day. In a few months, you will move on to making about $200/day and in a few years you will be making $500/day. This will all depend on your competitive edge as a seller.

Comparing Amazon Vendor Central and Amazon Seller Central is essential to help you understand which option works best for you

How Does Selling on Amazon Work?

To sell things through Amazon, you should get familiar with its two different programs.

Amazon Vendor Central allows you sell your products directly to Amazon

Amazon Vendor Central

This is an invitation-only platform for businesses that want to sell their products to Amazon itself. Amazon gets the ownership of your inventory and they will be responsible for marketing and selling it to shoppers on their website.

The manufacturers or merchants sell their products to Amazon at wholesale prices. From this point on, the seller does not need to be involved in the process.

Amazon gets ownership of the products, pays the seller, and sets the price for the products to be sold on their marketplace. Amazon also handles delivery and shipping without the input of the seller.

Benefits of Using Amazon Vendor Central

  • If this option is available for you, it virtually eliminates all the hassles of working as a direct seller. This includes pricing, marketing, shipping and all other logistics required for completing product sales.
  • You automatically get a seal of approval from the consumers when Amazon sells your products. This can boost consumer confidence in your products which you probably cannot have as a third party seller.
  • The business model is simple. As a vendor, all you have to focus on is fulfilling purchase orders, billing and avoiding any chargebacks.
Amazon Seller Central can help you grow your online business

Amazon Seller Central

Amazon Seller Central is a self-service program which is open for practically everyone, unlike Vendor Central which is invite-only. Brands and merchants use this platform to market and sell their products directly to Amazon’s customers.

The inventory, brand name and pricing are all under the seller’s control and they just pay a specific fee to Amazon. Currently, more than half of the total sales that Amazon is generating comes from third party sellers.

There is definitely more work involved than selling on Vendor Central, however, there’s a greater level of control and higher chance of setting better margins.

As a user of Seller Central, you have two options for fulfilling the orders you receive from Amazon customers. These are Fulfillment by Amazon (FBA) and your own fulfillment (FBM).

With FBA, sellers enroll their products for Amazon’s fulfillment services. Amazon handles packaging and shipping through its own fulfillment centers.

On the contrary, sellers can choose to handle the shipping, customer service, and returns for every order themselves by using FBM. Amazon charges sellers to sell on their marketplace based on what fulfillment program they choose and how much they sell.

Benefits of using Amazon Seller Central

  • You get to reach millions of daily visitors and get more people to your online store.
  • Amazon’s marketplace is huge. Sellers gain exposure to new and diversified customers every month. Many of these shoppers would never encounter your physical or digital store otherwise.
  • Online shoppers that surf the internet for different products are more likely to buy on Amazon than on any other platform. In fact most of them visit Amazon’s website with the intent to buy. This means increased sales for the sellers.
How to make more money selling on Amazon

3 Actionable Ways to Earn More Money Selling on Amazon

Here are a few ways you can increase your earnings and become a more profitable seller on Amazon.

1. Choose the Right Niche

If you’re running a business on Amazon you have to keep up with the latest trends through social media. To sell products that people are actually interested in buying, you have to be on top of what’s in the news and other sources.

Some market fads may seem tempting for example wearable tech or fidget spinners. But you need to be careful as they don’t guarantee long term earnings.

Instead, you should focus on markets that can stand the test of time and are always strong. Some examples include natural health, fitness and weight loss, skincare and beauty, consumer electronics, yoga, personal development, baby food, pets and others.

You can check the top trending products on Amazon itself by looking at the bestsellers. You should choose and stick to a mainstream category since demand for products in such a niche will be long-lasting.

2. Step up Your Marketing Game

You have to really become a proactive marketer to be more successful at selling on Amazon. Your products won’t sell themselves. Implementing the right marketing strategies is, therefore, one of the many secrets for successful Amazon selling.

You need to market your business and products on social media and on your blog with links back to your Amazon product pages. Get the word out about your products by partnering with affiliates or social media influencers and leverage their following to your advantage.

Sending regular emails to your existing and prospective customers is also really important. You should encourage product reviews as well as a single positive review can go a long way.

3. Stay on Top of Your Competition

You should know what other sellers are doing in your niche—their pricing, the marketing strategies they’re employing, new additions to their product lines, and everything else they’re up to.

Even if you’re leading a specific market for now, there’s no guarantee that your business will stay that way. So, you need to be well aware of what your competitors are doing to stay profitable.

You can research your competitors’ websites, blogs and also go through reviews and feedback that they receive. Moreover, you should find out what people love about their products so you should be sure how to meet those criteria. Similarly, you should know about their customers’ grievances so that your own customers don’t have to experience problems of the likes.

Selling on Amazon is a wonderful way for budding digital entrepreneurs to get started in this market, while letting Amazon do all the heavy lifting. You will be exposed to a highly successful e-commerce ecosystem and reach a much larger buyer community when selling on Amazon.

Happy selling!