Is Amazon FBA Worth it for Third-Party Sellers?

Is Amazon FBA Worth it in 2022 and beyond for Third-Party Sellers?

In 2021, Amazon’s revenue was more than $469 billion, up from $386 billion in 2020. Nearly $104 billion (22%) of that revenue is generated by third-party sellers. Which is very impressive.

In the old days of selling, entrepreneurs would need a large amount of money to have a respectable business. By selling on Amazon, you can eliminate half of those requirements and start a business. The capital required to start an amazon business for third-party sellers is far less than that what would be required for setting up a traditional business. It is a business that does not need a physical location. You don’t need to have a massive inventory to start. You don’t have to be a recognized Brand. Anyone with sufficient capital can start an amazon business.

How Much Money Do Amazon sellers make?

We are sure that you would love to know the answer to the famous question that “How much money do amazon sellers make? Let’s answer this question according to research reported by Jungle Scout. The stats are as follows:

Profit Margins:

• 32% of the Third Party Sellers are Earning profit margins of More than 20%; while
• 65% of the sellers are earning profit margins higher than 10%.

Lifetime Profits:

• 14% of Amazon sellers have earned a lifetime profit of over $100,000 from their amazon business.

Monthly Sales:

• 13% of Amazon Sellers have monthly sales between $25,000-$250,000.
• 50% have between $1,000-$25,000, while
• 22% have reported sales under $500 per month.

This isn’t bad, considering many new sellers start this as a side hustle!

What Products are Third-Party Sellers Gonna Sell on Amazon?

As a third Party Seller, we are not looking for a 100million dollar company, we are looking for a business that can provide us from 1,000$ to 10,000$ monthly profits with our available resources. That is why we target products that have a great demand but there is very little competition to go in for. Third-party sellers’ business grows as the market grows with time. It’s a fairly easy business to start and be successful for third-party sellers provide that factors like product selection and sourcing along with product packaging and listing have been paid attention to. You would be surprised to know that more than 50% of the sellers as of today are third-party sellers and they currently are dominating the amazon market places. They started a few years back and with the growth of the amazon market, they have grown really big and become the amazon marketplace leaders.

How Much Does Amazon Business Cost to Third-Party Sellers?

This business can be started from home with just 15,000$ or even less to have a monthly profit of around 1,000$-1,500$. For people living in the subcontinents, this may be a lot of money but for the individual living in the US, UK, Australia, and Canada you want to have at least 5,000$ at the month’s end to be satisfied with a business and live a good life. For a business to have a monthly profit of 5,000$, the required investment will be around 30,000$. (You can convert this US currency into your home currency to get a rough estimate of the budget for your business on amazon).

Flipping Amazon Business

Amazon Private Label business is an asset that can be sold once established. There are many third-party sellers that have sold their businesses on amazon at a rate of 2.5X to 5X of their annual profits. Say you have established a business of 30,000$ in 2020, and that business has achieved an average monthly profit of say 6,000$ in 2022. There are marketplaces where your business can be sold from (6000X12X2.5) $180,000 to (6,000$X12X5)$360,000. Which is a lot of money if you consider the initial investment that you had. Now, you can relaunch 3 more products from half of the receipt and spend the remaining for your luxury life. After 2 to 3 years you can sell your new brand again and this cycle goes on.

Let’s Conclude Is it Worth Being An Amazon Seller? and If So which model is the Best Model?

You are here today because you probably have heard that selling on amazon is really a good opportunity to make a lot of money and perhaps even change your life. But it’s not the only way to make money selling e-commerce. You can start your own website, you can do business through the Shopify site, which is basically a software tool that hosts your own website. You can do drop shipping. Actually there whole a wide array of things that you can do to sell on eCommerce. But Amazon is the Best opportunity, hands down. It is probably one of the best opportunities in the last 100 years, period. Amazon FBA is worth it because of the huge amazon audience and selling with the amazon fulfillment facility.

Would love to know and answer your queries and concern. Please leave a comment and we will surely reply to your queries.