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Last Updated on December 10, 2022 by Chris Panteli
Is Selling On Amazon Worth It?
More and more, businesses are transitioning to an online model. In 2020 alone, Amazon increased its revenue by $280 billion from the previous year.
Even more interesting? A good part of those sales come from Amazon’s many online sellers, who use the Amazon marketplace to sell various goods.
However, it can be a little difficult for new sellers to navigate. There is selling on Amazon, and then there is selling on Amazon FBA, and there is a pretty big difference between the two. Plus, there is always that one eternal question all business owners have:
Is selling on Amazon worth it?
We have the inside scoop to help you determine if selling on Amazon FBA is worth it for your home or professional business.
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- Is Selling On Amazon Worth It?
- How To Sell On Amazon
- What To Sell On Amazon
- How Much Does Selling On Amazon Cost?
- How To Make The Most Money Selling On Amazon
- How Much Money Can I Make Selling On Amazon?
- How To Get Paid When Selling On Amazon
- Pros And Cons Of Selling On Amazon
- Tips For Selling On Amazon
- Bottom Line
- Is Selling On Amazon Worth It?
How To Sell On Amazon
Amazon is the first stop for many consumers today who have been won over by competitive pricing, endless inventory, and two-day free shipping.
When it comes to selling on the Amazon marketplace, there are two ways to sell online: Amazon and Amazon FBA.
Selling on Amazon means that you keep all of your inventory and ship orders yourself to the customer. It tends to be more ideal for businesses or individuals that are already set up to do their shipping.
On the other hand, Amazon FBA is like a concierge service where Amazon maintains your inventory for you and ships directly to Amazon shoppers without you ever having to touch the product. You benefit from Amazon customer service, too.
To help you determine which one is right for you, consider the items you want to sell and where you will be sourcing each item from.
How To Sell On Amazon FBA
Amazon FBA means Fulfilled by Amazon. To begin selling, you simply ship your products to the appropriate Amazon warehouse. Then its fulfillment centers take over from there, storing, packing, and shipping your orders directly to your customers as ordered.
With Amazon FBA, it couldn’t be simpler: you ship all your products in one shipment and let Amazon take care of the rest.
What To Sell On Amazon
Amazon’s versatility makes it easy to be able to sell a wide number of items, including everyday items like books and beauty products to more niche items like home improvement tools and gourmet foods.
The most important thing to remember is that you are selling to make money, so you want to make sure that your margins are high enough to make a profit. Amazon offers a helpful calculator that allows you to check margins based on your chosen fulfillment method.
There are three common ways that will help make selling on Amazon worth it:
- Retail arbitrage: Purchase from a store and resell on Amazon at a higher price.
- Online sourcing: These are items that you purchase from an online seller and then resell for a higher profit.
- Private label: You can work with Amazon FBA to create a private label for manufactured or wholesale products. This tends to be a better choice for more experienced sellers, since
Some items may also require permission to sell, further complicating the process of selling and earning.
Before you choose which items to sell, consider which items may require special approval.
| Category | Approval Required | Approval Not Required |
| Amazon Kindle | ✔ | |
| Amazon accessories | ✔ | |
| Automotive and power sports | ✔ | |
| Baby products | ✔ | |
| Beauty | ✔ | |
| Books | ✔ | |
| Business products | ✔ | |
| Camera and photo | ✔ | |
| Cell phones | ✔ | |
| Clothing and accessories | ✔ | |
| Collectible coins | ✔ | |
| Electronics | ✔ | |
| Fashion jewelry | ✔ | |
| Fine art | ✔ | |
| Fine jewelry | ✔ | |
| Grocery and gourmet food | ✔ | |
| Health and personal care | ✔ | |
| Home and garden | ✔ | |
| Industrial and scientific | ✔ | |
| Luggage and travel accessories | ✔ | |
| Musical instruments | ✔ | |
| Office products | ✔ | |
| Outdoors | ✔ | |
| Personal computers | ✔ | |
| Shoes, handbags, and sunglasses | ✔ | |
| Software and computer games | ✔ | |
| Sports | ✔ | |
| Sports collectibles | ✔ | |
| Tools and home improvement | ✔ | |
| Toys and games | ✔ | |
| Video, DVD, and Blu-Ray | ✔ | |
| Video games and consoles | ✔ | |
| Watches | ✔ | |
| Professional services | ✔ |
Items like books are great because they are easily accessible, can be bought for cheap, and do not require the amount of storage space required of larger items.
How Much Does Selling On Amazon Cost?
There are specific fees that will apply to your Amazon or Amazon FBA account.
Selling on Amazon FBA requires both a storage and handling fee for the additional service. The amount you pay all depends on the sales plan you choose and also which category of items you are selling. Pricing may also vary by weight and season.
There are two plans available when selling on Amazon: the Individual and the Professional.
Selling on Amazon and Amazon FBA
| Number of Items Per Month | Cost per Month | Selling Fees | |
| Individual | 40 | $0 | $0.99 per item + referral fees + variable closing fees |
| Professional | Unlimited | $39.99 | Referral fees + variable closing fees |
Referral fees can range from 8% to 45 percent, depending on the item category, with some items carrying a minimum charge of $0.30, if there is a minimum at all.
If you are new to Amazon or Amazon FBA, you can always begin with the Individual plan and upgrade later to the Professional plan when you are ready.
If you opt to sell via Amazon FBA, there are some additional fees you may incur in the form of fulfillment and storage fees.
| Order fulfillment | Storage fee | |
| Amazon FBA | By weight; $2.41 to $4.71+ per unit | Per 30 days: $0.48 to $2.40 per cubic foot |
For example, if you sell a computer monitor weighing 41 pounds, you can expect to pay around $76.57 in fulfillment fees, while a T-shirt weighing a little more than 12 ounces costs less than $5 in fees.
Which Amazon Or Amazon Fba Plan Is Right For Me?
Before deciding, consider what item you will be selling and how much help you reasonably need to fulfill demand.
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How To Make The Most Money Selling On Amazon
The question of whether selling on Amazon is worth it all depends on you.
There are a few factors that can help make you successful when selling on Amazon and Amazon FBA.
- Start-up capital
To first get started, you will need to invest some money into your business. Look for cost-effective ways to build your inventory while minimizing your total investment. This could mean shopping at thrift stores or visiting consignment shops to find rare but valuable goods.
- Storage
Storing a bunch of video games is far different from storing electronics or musical instruments, simply because of the space requirements. When you sell on Amazon, you will have multiple items from whichever category you choose, and that can start to take up a lot of room after a while.
This is where selling on Amazon FBA can be a fantastic option because Amazon takes care of all the storage and shipping so you can focus on what is most important: sourcing more inventory to meet demand.
- Time
The amount of time you invest will also help determine how much money you can make selling on Amazon FBA and Amazon. It will take some time to set up and then maintain your storefront, although Amazon FBA can help save you time if you do a high volume of orders or have storage issues.
Just like anything else, the more time you spend selling, the more selling on Amazon is worth it.
- Perseverance
Not all people may be suited toward a sales gig on Amazon. It requires patience, as it may take a little time to get your business rolling with regular demand.
It also helps if you like to shop. If you go the retail arbitrage route, you will need to spend some time in stores scanning items to find out their resale value. Depending on what you sell, you may need more time to shop for some items than others.
How Much Money Can I Make Selling On Amazon?
When you ask yourself “Is selling on Amazon worth it?” there is usually one primary concern: money. The first thing most people want to know is how much money can be made selling via Amazon and Amazon FBA.
Many sellers are able to make a tidy profit selling on Amazon, with JungleScout reporting the following numbers for Amazon sellers:
- Half of all Amazon sellers make more than $5,000 in sales each month.
- Half of all Amazon sellers have made over $50,000 in lifetime sales.
- One-quarter of Amazon sellers make more than $25,000 in sales each month.
- Nearly 20% of sellers have earned $1 million or more in lifetime sales.
Here is a detailed look at the kind of profit margins you can make to help you decide whether selling on Amazon is worth it.
| Profit margin | Percentage of Amazon sellers |
| 1% – 5% | 6% |
| 6% – 10% | 10% |
| 11% – 15% | 13% |
| 16% – 20% | 19% |
| 21% – 25% | 14% |
| 26% – 50% | 19% |
| 51% – 100% | 3% |
| Not currently profitable | 8% |
| Don’t know | 8% |
How To Get Paid When Selling On Amazon
All you need is an Amazon account to get paid for your sales.
At signup, you will be asked to provide banking and credit card information. The details you provide will be used for any subscriptions and fees you owe, as well as any new deposits from sales.
Pros And Cons Of Selling On Amazon
Just like anything else, there are both pros and cons to selling on Amazon.
Pros
- The Amazon name
- Open to everyone
- Efficiency
- Advertising
Cons
- Fees apply
- Storage costs for FBA
- Fluctuating rates
We dive deeper into the pros and cons of selling on Amazon so you can decide if it is worth it for you.
Pros Of Selling On Amazon
- The Amazon name: Amazon has over 300 million active users already established to instantly create a new clientele for your business, offering the potential of millions of views for your product.
- Open to everyone: It is easy to sell on Amazon, whether you are a new user or a more established online retailer or reseller.
- Efficiency: Amazon sellers have the option to sign up for Amazon FBA, so they do not have to worry about order fulfillment and shipping. You simply ship your products to Amazon and let them do the rest, including Prime shipping on the buy box for your new Amazon shoppers.
- Advertising: Amazon PPC is a great way for Amazon sellers to advertise their services and help customers find their way to that magic buy box.
Cons Of Selling On Amazon FBA
- Fees apply: When you sell on Amazon or Amazon FBA, there are subscription or per-item fees that you will incur for the service.
- Storage costs: If you opt for Amazon FBA, you will be required to pay a storage fee based on the total number and weight of the items stored.
- Fluctuating rates: While some prices are set, there are other variables that can make it difficult to accurately calculate current pricing, such as season all fees or charges based on weight.
Tips For Selling On Amazon
Today, Amazon is an excellent place to shop your wares, becoming a top spot for both burgeoning and established business owners alike. However, to be successful, it is important to find ways to stay ahead of the pack and on the verge of trend-setting.
When trying to determine if Amazon is worth it, be sure to do your research and choose your products carefully. You don’t want to risk investing all of this money into a new venture only to find out that the profit margins are not big enough to earn you a profit, or worse, you are not permitted to sell the items on Amazon at all.
After you pick the right items to sell, remember to be patient as you dive into the world of Amazon e-commerce. Mistakes will be made as you learn systems and establish your own storefront, but learning from other, more established sellers can help you learn how to be more successful with your own products.
Take A Course About Selling On Amazon
Selling on Amazon has become so popular that there are actually courses available now to help you become strategic and successful in your sales. However, with so many out there, it is hard to determine which Amazon course is the best.
Especially as a new seller, you can use an Amazon course to learn about Amazon and also help you determine if selling on Amazon FBA is worth it for you. The best part is that the course comes from sellers who are already successfully selling on Amazon.
The Selling Family makes $100,000 per year working just part-time and runs its Amazon Bootcamp to share expert tips and advice. Courses such as this one can give you all the information upfront to get you going, so you can skip the learning curve and get to selling that much faster.
Bottom Line
So, with all of this information, there is just one question:
Is selling on Amazon worth it for you?
It all depends on you. You can make money as a side hustle, but most sellers make the most when they treat selling on Amazon as a full-time or part-time job and not just an occasional gig.
At the end of the day, selling on Amazon is worth it when you have the time, effort, and expense to get started and stay committed.
