Amazon FBA success rate

Amazon FBA Success Rate: All The Crucial Stats [August 2023]

Selling on Amazon does have some pros: Access to Amazon’s loyal customer base, less worry about logistics, and get Prime shipping. However, what Amazon seller success rate is and how to increase it?

The stats say that 46% of Amazon sellers achieve an average Amazon FBA success rate of 11-25%. Moreover, 64% of Amazon sellers become profitable within 12 months.

The article below will guide you through the success rate of Amazon FBA and some steps to start selling on this marketplace. 

Is Selling on Amazon Still Profitable?

Covid-19 may hurt the sales and profits of different businesses, but Amazon sellers were still making a profit. During the epidemic, small-scale businesses and new third-party sellers witnessed a sales increase of 45%.

Notably, more than 200,000 new sellers listed their products on the Amazon marketplace in 2020. 

Moreover, the number of buyers has sharply been growing. With the rise of over 65% of customers shopping on Amazon during Q2/2021, Amazon has become more profitable than ever compared to Walmart (37%) and eBay (17%).

So as of writing this article, Amazon is still one of the most profitable marketplaces, whose growth has shown no sign of stopping yet.

💡Discover 11 steps to start your Amazon FBA Business & 6 tips to scale it up.

What Is the Amazon FBA Success Rate for Businesses?

Have you ever asked: “What is the success rate of Amazon FBA?” Most new sellers ask this question, so let’s find out what is the success rate of Amazon FBA right below!

How much revenue do Amazon sellers make?

The annual sales of every Amazon seller are different. On the one hand, there are people who struggle with making sales. On the other hand, there are “superstars” who can impressively generate over $1,000,000 in sales per year. 

Percentage (%) Annual sales (US Dollar)
22% < $500
13% $501-1,000
27% $1,001-5,000
13% $5,001-10,000
10% $10,001-25,000
8% $25,001-50,000
4% $50,001-100,000
1% $100,001-250,000
2% Unknown

As you can see, most new sellers achieve an Amazon FBA success rate of 27%. In this group, they make about $1,001-5,000 in annual sales.

However, it’s ok if you don’t make a huge sale in the beginning. It generally takes about 3 months to make the first sale. 

How much profit do Amazon sellers make?

Profit margin and sales are two different statistics. For example, making huge sales doesn’t necessarily mean you own that money. The Amazon profit margin shows the ratio of sales that have generated profits. 

According to Jungle Scout, the profit margin of Amazon vendors varies:

Percentage (%) Profit margin (%)
9% ~1-5%
10% 6-10%
15% 11-15%
18% 16-20%
13% 21-25%
16% 26-50%
3% 51-100%
8% Not yet profitable
8% Unknown

One thing to remember is that your profits will change based on sales volume, costs, and other factors. 

Here, you may be asking what a good profit margin is. The answer is profit margins fluctuate in every business, such as fashion, furniture, accessories, etc. 

Generally, a 10% profit margin is considered average, while a 20% margin is considered high. If your margin is below 5%, your margin is a bit low. 

If your margin is below 5%, high chances are that you might underprice/overprice your products or fail to optimize your costs. However, adjusting product prices and optimizing costs timely has always been easier said than done. You need real-time, accurate profit analytics.

For instance, if you cut corners on many expenses, you’ll have a deceived picture of your profit – you thought you earned big, but the fact is you’re losing bigger. Or you only track your profit analytics once a month and miss out on lots of opportunities to optimize your profit margin.

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How Long Does It Take To Become Profitable on Amazon?

Most Amazon sellers (24%) take 3-6 months to start making a profit. Meanwhile, only 2% of sellers take more than 2 years to become profitable. Let’s take a look at the table below to have a grasp of the average time a seller starts to make a profit. 

Percentage (%) Length of time generating profits (months)
21% < 3 months
24% 3-6 months
19% 6-12 months
11% 12-24 months
2% > 24 months
23% Unknown 

So as an Amazon newbie, in the first 6 months, you will have to:

  1. Conduct research about your market, niche, target audience, suppliers, and rivals: 1 – 2 weeks
  2. Build custom order inventory: 4 – 6 weeks
  3. Deliver products by sea: 4 weeks
  4. Create Amazon product listing page: 3 – 7 days
  5. Launch marketing campaign and research for the next items: 3 months

This timeline may vary between sellers as they put different efforts and time into their stores. This process can be repeated as the following:

  1. Order, manufacture, ship, and create a listing page for the second product: 12 weeks
  2. Launch marketing campaign and research for the next items: 6 weeks
💡Pro tips:If you want to maximize your profit, it’s important to know how many touchpoints your customers have gone through and the importance of each touchpoint to your customer’s final purchasing decision. And that’s where you need to know about multichannel attribution. Learn more!

How Much Does It Cost To Sell on Amazon?

Now that you know the Amazon FBA success rate for new sellers. However, it’s also good to think about new business expenses. There are various fees that buyers have to pay to use Amazon.

Generally, here are some of the fees you can expect based on your selling plan:

  • Monthly subscription fee: $39.99 per month (Only for Professional Selling Plan)
  • Per-item fees: $0.99 fee for each item sold (Only for Individual sellers)
  • Referral fee rates: Vary between categories
  • Closing fees: $1.80 per item (Applied in the categories of Books, DVD, Music, etc)
  • High-volume listing fee: $0.001 per eligible SKU (Charge monthly but the first 1.5 million SKUs will be waived)
  • Refund administration fee: $5.00 or 20% of the applicable referral fee (Applied if you refund a paid order)
💡For more details, check out our insightful article on Amazon FBA Fees: A Detailed Breakdown [4+ Tips]

How To Start Selling on Amazon?

Starting a business requires lots of effort, time, and money. The profit won’t just happen in a night. 

That’s why a good plan, market knowledge, and consistency are essential to success.

To start your journey, you have to:

  1. Start with a small number of items: If you’re new to Amazon, you can start selling 50 – 100 products to test the market. If you succeed in selling them, you can order more and adopt your selling strategy. Otherwise, you won’t suffer from huge losses if your business doesn’t take off.
  2. Research your keywords and optimize listings: Keyword research helps you find suitable keywords to target and gives important insights about the questions that your target audience is actually looking for. You can use keyword optimization tools to boost your ranking and sales.
  3. Invest in winning products: Winning products have high-quality and fair prices, so people tend to buy them. Selling these products helps you get more customers, make more sales, and it’s pretty easy to find.
  4. Look for new products: Most products will become outdated over time, so keep searching for best-selling items is important to remain your business.
  5. Invest in Amazon PPC: Amazon PPC, ads run by experts, help boost sales of your products. They can be costly, so you should be prepared with a strong budget.

Final Words

All and all, this blog has summed up everything about Amazon FBA success rate and how to start selling on this platform. In the end, only you can answer the question: “Is an Amazon FBA business right for you?” 

If you say yes, we can help you increase the chance of you being successful by offering profit-tracking analysis so that you can make informed decisions

TrueProfit provides powerful calculations and automated real-time profit analysis for all Shopify merchants. This app also calculates profit automatically, manages Cost of Goods Sold (COGS), integrates seamlessly with Ad platforms, and more.

Are you ready to start a business on Amazon? Get in touch with us today!

Discover what proper profit-tracking looks like at trueprofit.io

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