Is Amazon FBA worth it? Fulfillment by Amazon (FBA) is a service that allows merchants and individuals to sell products on Amazon. You can outsource the entire logistics such as storage, packaging, shipping, returns, and customer service to Amazon.
Many individuals and businesses have recently started selling products through Amazon. Almost everyone was able to benefit from Amazon’s growth. In 2013, Amazon had total net sales of $74.46 million. In 2021, sales were a whopping $469.82 million.
In fact, Amazon has managed to increase its sales by 4.76 times. This massive growth resulted in 2,734,713 active sellers and 8,156,753 sellers overall (2021). And that’s precisely the problem for many individuals and companies in this country – massive competition.
One might wonder if Amazon FBA is still worth it because of the number of sellers. In this article, we try to explain the answer to this question. These are the contents of this article:
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Amazing statistics about Amazon.
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Is Amazon FBA Worth It?
Many e-commerce professionals or individuals considering starting an online business wonder if Amazon FBA is still worth it.
When Amazon made the FBA service available, many e-commerce entrepreneurs, regular retailers, or individuals started selling products through the platform.
For individuals, being able to outsource logistics and shipping to Amazon and thus sell products through the marketplace was awesome.
Selling on Amazon had many advantages. On the one hand, the necessary visitors were already on the platform. On the other hand, customers trust Amazon.
FBA enabled many individuals to become self-employed and e-commerce entrepreneurs were also able to significantly increase their sales.
Amazon FBA became popular in Germany and other countries as well. But what is the current situation?
Has it become harder to get customers? Has the cost of online advertising on Amazon increased?
With Amazon Prime, customers no longer have to pay for shipping. However, this also means a lower profit margin for retailers.
So is Amazon FBA still worth it?
Or are the profit margins already so low that it no longer makes sense to become an Amazon seller?
To answer this question, let’s take a look at the situation in the past:
Researching and shopping for products used to be easier than it is today. This is due to the following reasons, among others:
The situation on Amazon looks different everywhere:
- An increasing number of Amazon FBA sellers leads to increased competition
- An increasing number of products, which also leads to more competition
- Good products with good listings
- Manufacturers from China have more work and are not dependent on individual dealers
- High-quality products are offered on Amazon
- Shipping is free in most cases because of Amazon Prime
Considering these circumstances, the current situation seems to be a lot more challenging than in the past.
So is Amazon FBA still worth it, or should you invest your time in your own online shop or even in other online marketplaces?
Is searching for products more difficult?
Searching for products to sell on Amazon has become more difficult—many niches are already occupied by good sellers. That doesn’t mean that finding good Amazon FBA products is impossible.
Amazon is like any other market. Competition is increasing and more vendors are joining every day.
However, you should never think that something has an end. More often than not, people who think this way will fail.
Selling on Amazon has just gotten harder, which doesn’t mean it’s impossible to build a successful business.
Today there are great tools that can double your chances of success.
For example, if you use Helium 10, it’s amazingly easy to find great niche products.
It is by far the best Amazon tool out there. You should read through this article as it explains two strategies for researching products using Helium 10.
You can also sign up for a free Helium 10 account here.
Anyone who can bring a better product to market than the competition will be successful in the long run.
Amazon merchants need about six to twelve months to build up a profitable Amazon business. From a business perspective, that’s not a long time.
When you use Helium 10, you can do the right marketing activities to accelerate your Amazon business growth.
Read Our Post Amazon FBA Beginners Guide 2022
Sourcing and finding a manufacturer
As for sourcing your products, it’s just like researching products.
As a seller, you need to do a lot more and better research and improve your negotiating skills.
If you do things right, you will definitely be able to find a manufacturer for your products.
Jungle Scout now even has a tool that you can use to research all available manufacturers in the world. You can watch it here.
You can research information such as a supplier’s other customers, average costs, and much more. You can learn more about Jungle Scout here.
You can definitely still build a profitable Amazon FBA business. As always, focus and perseverance are key.
You can’t build a profitable online business in a day or a week. If you keep at it, success will come over time.
If you want to be on the safe side, start selling books on Amazon.
Product research and the search for the right supplier have become more difficult, but Amazon FBA is definitely still worth it.
In addition, Amazon sellers are getting better and better Amazon Seller Tools, which make the work itself much easier.
Such a tool is a must-have for every Amazon seller. Be sure to check out our article on Helium 10.
How much does Amazon make from FBA?
You can make a profit of about $2,000–$6,000 a year if you have a profit margin of 16–50%, which is what about 52% of vendors claimed. You may easily earn $3600 per year if you keep your Amazon FBA company’s profit margin at a healthy 30% and strive for a minimum of $1000 monthly sales.
Can I do Amazon FBA full-time?
Nevertheless, this indicates that the majority of Amazon sellers hold other jobs, many of them full-time. In fact, 37% of Amazon sellers hold down full-time jobs in addition to running their companies, and this number includes individuals who work more than 60 hours per week.
Is it free to sell stuff on Amazon?
Every time you sell a product under the Individual plan, you are required to pay $0.99. There is a $39.99 monthly fee for the Professional plan, regardless of how many goods you sell. The referral fee, which varies by product category and is also collected by Amazon for both plans, is a percentage of the overall transaction amount.
What is the difference between Amazon FBA and Dropshipping?
The main distinction, to put it simply, is stock ownership. When you dropship, you serve as a middleman between suppliers and customers without really owning any of the products. Contrarily, if you use Amazon’s FBA service, you must spend money on goods and store them in Amazon’s warehouse.