Can You Make Money Selling On Amazon?

There is a lot of hype about selling on Amazon.  There are coaches, programs, and a variety of other products advertised to help you get going.  I’d like to cover this topic in a more general fashion, rather than a review of any specific program, to give you an idea of what you can expect when starting an Amazon FBA business.

Can you make money selling on Amazon?  Absolutely!  Many people do.  However, there are things you need to know before you start.

What is Amazon FBA?

First of all “FBA” stands for “Fulfillment By Amazon”.  What this means to the Amazon seller, is that once you list your product, Amazon handles collecting the money, packing and shipping the product, and all product support (and returns).  Your work is essentially done after sending your product to the Amazon Warehouse.  This is a way you can put in front end work, and make money while you sleep.  It’s a great business model that allows you to work anywhere you can connect to the Internet.

This service does not come free, however.  You are charged fees from Amazon to store, pick, and ship your product from their warehouse.  Amazon also gets a small cut of the sale.  You have to price your product accordingly.

With that said, you do not have to use Amazon’s fulfillment.  You can list on Amazon and ship your product yourself.  This saves you the Warehouse storage fees, and the picking and shipping fees.  But to be honest, if you’re just starting out, I don’t see any way for you to save money by doing all this work, yourself.  Amazon is very efficient, and they can ship things far cheaper than you can.  Why take on that headache, even if you could save $1?  The whole idea is to create a passive income, which is hard to do if you have to ship your products yourself.

It’s up to you to find a product, pay for it, have it shipped to Amazon, and monitor your inventory (you don’t want to run out).  This sounds simple, but there is a lot involved in this process, and it can be time consuming.  If you are a beginner, you MUST get some kind of training that can guide you from start to product.  There are many things the hyped Amazon business training videos don’t tell you.  You find out AFTER you’ve paid for it.  I’m letting you know up front, so you go in with a plan and the right mindset.

Initial Investment Needed To Get Started

Your initial cost is your Amazon business account ($39.99/month), some necessary software tools ($30-100’s/month), training (100’s to 1,000’s), and the cost of your first product.

In reality, you’ll be looking at a minimum of $100/month in fees for Amazon and research tools.  You’ll also spend hundreds to thousands on a solid training program, which sounds like a lot, but keep in mind that good training can guide you away from making very expensive mistakes when it comes to product selection.  Ultimately, your product is going to be your main expense going forward.

As far as start-up capital goes, the short of the story is that you’ll want to have at least $3000 to invest up front, to get your business going with your first product.  If this seems impossible in your current situation, Amazon FBA is really not for you… at least not right now.  But that’s okay, there are other online opportunities with less up-front costs.

If you don’t have the capital, but you still want to build an online business, my recommended platform can be found in this review.

Is This Online Business Model Saturated?

The answer to this is both yes and no.  There are over one million small business sellers on Amazon.  I believe small business sellers account for nearly 60% of Amazon’s sales.  What this means is that, yes, there are TONS of sellers on Amazon, and certainly some product categories that are saturated that you would be wise to avoid.  But, if you do your research well, there is certainly room for one more seller.  There are plenty of niches that are not saturated.

With far more products than sellers, you can still carve out your own piece of the pie.  There are always new niches to tackle and new products coming out.  If you have products you make yourself (hand-made, or even digital products), you have something unique you can sell.

The Reality vs. The Hype

I see many programs out there that teach you how to sell on Amazon.  Some merely consolidate free information you can compile yourself with a little time and effort.  Others take your through the entire process of building your Amazon business, guiding you each step of the way.  Some claim that you can build a six-figure business in just a few hours a week.  Others claim a nearly work-free passive income stream.

If you are new to this, it’s hard to tell the hype from the reality; the good programs from the not-so-good (and the scams).  Below are a few things you can expect in building an Amazon business.  Compare this with the hype you hear from those selling training programs.

First, expect to put in a good bit of quality time into your business.  While the goal may be to reclaim your time, the reality is that it requires you to pay it forward, so to speak.  Invest your time now, and reap the rewards later.  Those courses that suggest you can build your business in just a couple of hours a week are not telling you the full truth.  While this is possible, you will likely be building it at a snail’s pace.  Rewards come to those who put in the time and effort.

Second, you can expect for it to take 2-3 months to go from start to your first product, and more time to net your first sale.  Yes, it can be done in less time, but this is a realistic time-frame for most.

Third, you are not likely to make six figures in your first year, as so many programs suggest.  You CAN, it’s POSSIBLE, but few do.  It takes time and effort to build your business.  If you have more capital to invest in products, you can accelerate the pace.  Just make sure you take time to choose your products wisely.

Lastly, yes, this is passive income stream, but only after you’ve done all the front work involved in listing your product.  It doesn’t stop here, though.  If you really want to hit that six figure income level, you do this by adding products to your store.  You need to come up with more product ideas, while making sure you don’t run out of inventory of existing products.  Once you get your system down, things do speed up.  It’s like anything else.  Learning and executing at first can be slow.  Once you get the hang of it, the process takes less and less time.  You will build momentum if you stick with it.

Be mentally prepared, this IS a business.  The first two months or so is ALL WORK (and training/learning the ropes).  I’m not trying to talk anyone out of it, I just want you to know what to expect.  There is no get rich quick program, and there is no six figures your first year by working on it an hour a day.  It’s not rational to expect such a huge reward for so little effort.  With that said, you can make money selling on Amazon.

The One Tool You Must Have

As I mentioned, above, there are tools you will need in order to build your Amazon business.  The most important one is a product research tool to help you find a product niche (and product ideas).  It is essential to be able to locate unsaturated niches that still have enough searches (and sales) to make it worth your while to list a product therein.  To do this, you need the right software.  There are several tools that fit the bill, but the two most recommended ones (by Amazon sellers) are Helium 10 and Jungle Scout.

Helium 10 has several options, but the complete (Platinum) package most use, is $97/month (or $970, billed annually).  Jungle Scout is $49/month (or $468, billed annually, Google plug-in extra).  You get more with the Helium 10 Platinum (see below), but if you are on a tight budget, Jungle Scout is a solid option.

While the $97/month is quite a bit more than the $49/month for Jungle Scout, there is a lot more to the story.  You also get access to a comprehensive 8-week Amazon FBA training course.  They call this the “Freedom Ticket“.  And yes, it IS comprehensive.  I wish they had this offer when I was starting out, as it would have saved me a lot of money.   For one monthly price, you get both training and the most comprehensive set of research tools out there.   Because of this, it gets the nod from me (full review coming soon), though I can certainly recommend both tools, from purely the research side of the equation.

As an affiliate for Helium 10, I have been given coupon codes that can save you money on the price of a subscription.  These are good for the ala carte subscriptions, as well as the packages, like the Platinum package that I recommend.

The coupon codes will show up on the landing page, after you click on the first link, below, which is for the free Helium 10 trial.  I haven’t been told how long the discounts are good for, so if you don’t see them on the landing page, they’ve expired.  😉  One is for 50% off your first month, and the other is 10% off every month (a much better value if you keep it long term).

For a free Helium 10 trial, click here.

You can sign up for a free Jungle Scout trial here.

If you are interested in Helium 10’s Freedom Ticket, more information can be found here.

My recommendation is that if you are interested, get all the information you can through the links, above, and if you like what you see, get a TRIAL account.  This way, you can test it out yourself, to see if it’s right for you.

Feel free to share your thoughts in the comment section, below.  I value your input.  If there is another tool you’d like me to test out and review, let me know.  I do have a review in the works for Helium 10, but will review others as time allows.

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12 Comments

  1. Hi Steve,

    You have put together an amazing blog post here! I like how you broke it down to its simplest form on how you can ship products with the help of a warehouse or you can do it for yourself…which I didn’t know much about, thanks for that.

    I agree that any business takes front end work to really make it a passive one, and the good thing is that you specifically added the amount of months it can take to make a sale and then the next one. That helped me visualize where I could be if I were to take on this business model one day.

    Yes, there are WAY to many programs and free content that pushes how to make money with Amazon FBA and anywhere on Amazon and how you have to be careful what you hear and who you follow. I appreciate that you broke that down in a simple format.

    I really enjoyed your post, keep up the amazing work!

    • Hi Michael,

      Thanks for taking the time to comment. I really appreciate it.

      I’m glad you found my article informative. That’s my goal, and it’s good to hear feedback that I’m hitting the mark.

      I’ll be adding more Amazon FBA information at a later date. I’m contemplating a “day in the life of…” series, to give people an idea of what all is involved in the process of putting a product on Amazon.

      There is a lot of training out there for Amazon FBA. When I took the training, it was quite expensive, but I wanted to follow a successful person, and get insight into how they did things. One-on-one training is expensive. It was worth the money to me, as it gave me a “safety net” of sorts for my first listing.

      Now, you can get good training through Helium 10, just by signing up for their suite of products (which are essential tools for your business… you’ll need them anyway). You don’t get a one-on-one with an expert to walk you through all the steps, but it gives you the information you’ll need to start and grow your business. And the price is right. 😉

      All the best,
      Steve

  2. Hi Steve,

    I really enjoyed reading this article. Your opinion on this business model, selling on Amazon is honest and insightful.
    Like you mentioned, a business is a business and many are selling the 6 figures dream that not anyone can achieve.
    Kind regards,
    Yoana

    • Hi Yoana,

      Thanks for the kind words. I try to be honest and lay out everything you can expect, which means I’ll never sell a training program. 😉

      All the best,
      Steve

  3. Hi, Steve,

    This was a very informative read, thank you for sharing your experience without charging anything 🙂

    I like the way you encourage to start it with the right expectations.

    I believe it’s crucial to not get discouraged down the road and quit.

    These are the things that are rarely tackled from this perspective.

    • Hi Natalie,

      Thanks for taking the time to comment. I always appreciate reader engagement.

      You hit on one of the main problems I have with all the hype surrounding the many Amazon (and Affiliate Marketing, as well) classes. They suck you in by saying you can make six figures your first year in just four hours a week. That’s just not the reality of it. I think this is why so many fail at creating an online business. They go in with the wrong expectations, then quit when things don’t work out as expected (as soon as expected).

      From my personal perspective, my online business are businesses. They are treated as businesses and run like businesses. To do this right takes a lot of legwork, effort, learning, and time to build up right. Sometimes, there is trial and error. That is a part of business (and life). It doesn’t happen over-night, and it’s not quick and easy.

      Go in with the right expectations, that it’s going to require a lot of work and effort, and your chance of succeeding is much higher, as you are less likely to quit. And so what if it takes more time to build a replacement income than what’s advertised? Isn’t building a six-figure income worth it? Maybe some can do it in a year, but what if it takes you five years to make it happen? Five years will go by whether you try to build a business or not.

      This is why you’ll see articles on this site take a more serious tone on this front. Don’t build for NOW, build for the FUTURE. If done right, your business will reap rewards down the road – whether that’s Amazon FBA or any other online business model.

      All the best,
      Steve

  4. Very interesting article. I have often wondered how I could make money from amazon. Thanks for an informative yet clear post.

  5. Hello,
    Well done on such an informative and in-depth article. It’s great that you summarise your recommendation at the bottom too, it makes it easier for me to come to a judgement/understanding of the article when it’s articulated again at the end.

    The Helium offer certainly sounds like a good deal too.

    Keep up the good work!

    Sharon

    • Thanks for the kind words, Karen. I’m glad you found the article informative.

      Helium 10 recently upgraded its tool stack. Definitely worth checking out. On my TTD list is to lay out the new feature set/updates. It was great before, and is even better now.

      Thanks for stopping by.
      Steve

  6. Hi,

    I’ve always been interested in starting an online business including the Amazon, but never had the time and opportunity to look into it as much.

    Thank you so much for making it possible for me to look into a further.

    Thanks
    Habib

    • Amazon was where my online business ventures started. It’s a great way to make money for _some_. It’s not necessarily for everyone, but it is a great business model. If you are able to take a risk with a few thousand dollars (without putting yourself into fiscal trouble), and have some good ideas, it could very well be your ticket.

      I appreciate you stopping by and taking your time to leave a comment.

      All the best,
      Steve

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