Are you considering establishing an Amazon business and want to know what the average Amazon seller income is so you can determine whether it’s worthwhile? Or perhaps you’re a seasoned seller who wants to know how you stack up against the rest?
In this blog post, we will break down the different factors that determine the average Amazon seller income so you won’t have to do the analysis yourself.
How Much Do Amazon Sellers Make?
It’s important to know what the average income for other sellers is, because if you’re a new seller, this will help you set goals or strategize to grow your business. If you’ve been selling for a while but haven’t yet reached average income, then this will give you an idea of what else needs to be done to improve revenue and generate more profit from your product sales!
The average income of an Amazon seller was recently determined through a survey conducted by JungleScout, a leading software that analyzes an Amazon business account and helps suggest ways to grow the business. They gathered the report information from insights from 4,864 entrepreneurs, store owners, and large brand owners on the Amazon platform.
In their key insights, they determined the following:
- 3 out of 5 sellers claim that their profits have increased in 2020
- 2 out of 5 sellers claim that their businesses did better than they anticipated despite the COVID-19 pandemic, which is a
- 39% of Amazon sellers are considering adding selling on Walmart as another avenue to diversify their e-commerce strategies
- 85% of Amazon sellers are profitable
JungleScout has determined that almost half of sellers on Amazon earn between $1,000-$25,000 monthly in sales, and larger sellers make even up to $250,000. Add it up, and this means that an Amazon seller can earn a yearly income of $12,000 to $300,000!
Based on JungleScout’s survey, here is a breakdown of Amazon sellers’ monthly sales:
|Monthly sales||Percent of sellers|
|More than $250,000||6%|
|I don’t know||4%|
Factors To Consider That Affect Average Amazon Seller Income
There are several reasons why Amazon sellers earn at drastically different rates. Here are the most common ones.
You can ask yourself how popular the category your products are in and observe how well-ranked your products are in the Best Sellers Rank. What do your product reviews and feedback look like compared to your competitors? How are you pricing your products compared to your competitors?
Additionally, sellers have varying expenses in maintaining and growing their business on Amazon. This is where it can get a bit more complicated.
Individual Sellers pay $0.99 to Amazon per item sold, while Professional Sellers pay $39.99 monthly. With this alone, it can make a difference in how a seller profits, because Individual Sellers sell significantly fewer items monthly than Professional Sellers.
Amazon also charges a referral fee per item to sellers, which is a fee associated with the role that they played for the transaction between seller and buyer to occur. It varies based on the type of item sold, but ranges from 3% to 45%. You can read more about Amazon Referral fees here.
Then for FBA fees, sellers have different fees to pay to Amazon for both inventory and order fulfillment. These fees depend on the product type, shipping weight, product size, and other factors. Sellers also pay fees for customer returns. These fees may not be very large, but it all adds up at the end of the month.
Then you have the sellers who spend a lot more on advertising campaigns than others. Some brands don’t need this kind of promotion, but others rely on it to keep their products visible. Most of the time, these advertising campaigns are worth the expenses to help keep their products competing with the familiarity of bigger brands.
All of these expenses are separate from how sellers run their businesses without Amazon’s involvement. For example, utilities, warehouse fees, workforce, Amazon FBA taxes, paying for seller software tools, and a lot more.
Related Reading: What is Amazon FBA: Complete Amazon FBA Guide in 2023
Is It Still Worth Selling On Amazon?
The expenses involved in managing an Amazon business sound a bit overwhelming, but the statistics from JungleScout’s reports tell us that Amazon’s customer base is consistently growing. This is good news for seller hopefuls!
The average income you should be aiming for doesn’t necessarily have to be the average of other sellers, but rather an amount that makes you feel like it is worth your time, effort, and investment while dealing with all of these factors.
It is definitely worth selling on Amazon as long as you play your cards right. You can start on it as a simple side hustle and work your way up to making it a full-time job!
What Can I Do To Maximize My Chances Of Earning Higher Than The Average?
This one is first because it’s the most important. You should never invest in a product that your research tells you that it won’t sell well and be profitable. Product research is the best way to save yourself from wasting money on unprofitable products. Take into consideration the kinds of products that you have knowledge in already, and use that to your advantage.
Look at the average monthly income of products in similar product categories, look into how long it takes to sell items on average, and what kinds of expenses are associated with those numbers. This is your best bet for making a profit by selling through Amazon!
It’s also very important to constantly observe the competition, even if you are starting to gain success. Use product comparison tools to your advantage in making it easier for you to make these observations. Sellers who understand this will put extra effort into improving their product listings by working on the images, writing clear titles and descriptions of products that are easy to read.
Focus On Getting Into The Best Sellers Rank
The average monthly income is higher for products that have a Best Sellers Rank of 100,000 or lower. You should focus your energy on figuring out how to get into this rank as quickly as possible. It’s difficult but worth it!
To speed up the process and know exactly how, you can make use of Amazon sales rank tracker tools. Some of them can even recommend your next steps to optimize your listings. They can generate keyword ideas, alert you of negative reviews, and help you analyze pricing, amongst other things. Working on as many aspects of your Amazon business as possible can help you with getting into the Best Sellers Rank.
Ensure That Buyers Are Getting Quality Products For Their Money
Put yourself in the shoes of a buyer. The competition is intense, and you want to stand out by selling quality products at the right price. It also takes a buyer a few simple clicks to see product reviews and read about the quality of your products. This can make or break your business.
When you aren’t the only brand in your niche, which is most often the case, it can be difficult to compete with other brands that are well known. If buyers see that they’re getting quality products when purchasing from you, they will take notice and be back for more!
Price Your Items Fairly
It may sound like higher prices equal higher earnings, but that actually isn’t always the case. With a quick search on Amazon, you have access to countless sellers. Buyers will easily be able to see other sellers who sell a similar product but at a better price, but still for good quality!
You can make use of Amazon seller tools to see the best way to price your items. You also have to price your items within Amazon Marketplace Fair Pricing Policies.
Don’t Sell Items That Weigh Too Much
This especially applies to new sellers. It may be tempting to sell larger items because they can typically bring you a big profit, but the fees associated with selling them can be large as well.
Start by selling less complicated items and work your way up once your business grows to accommodate the funds to cover what it takes to manage larger items, such as workforce, inventory costs, customer returns, and more.
There are many factors that can determine the average income for Amazon sellers. One thing is for sure, the majority of sellers on Amazon do make a profit. It may not be a 100% guarantee, but from statistics, we can say that it’s worth giving a shot if you are thinking of starting your own business.
Even if you are already selling on Amazon but haven’t reached the average income, there is hope for everyone. You can work to improve your current listings or even try doing something different. No matter what stage of selling online you’re in, always look out for ways to make it better, because the industry constantly changes!
Just be smart about how you go about this venture and prepare yourself for what’s next through the proper research. The Sourcing Monster blog can help you gain all the necessary knowledge!