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Is Amazon FBA worth it? Fulfillment by Amazon (FBA) enables everyone to sell products on Amazon easily. Using FBA, you can outsource storage, packaging, shipping, returns, and customer service to Amazon.
In recent years, many individuals and businesses started selling their products on Amazon. Almost all of them were able to take advantage of Amazon's growth. In 2013, Amazon's total net revenue was $74.46 million. In 2019, they had a revenue of $280.52 million.
In fact, they were able to 3,76x their sales.
Yet, this massive growth led to 2,734,713 active sellers and a total of 8,156,753 sellers (March 2020).
And that's exactly what's the problem for many individuals and businesses out there.
People might wonder if Amazon FBA is still worth it because of the high number of sellers out there.
In this post, I will answer the question of whether Amazon FBA still works and whether it' s worth selling on Amazon.
Here's what you will learn:
To start quite easy, here's an infographic about the most important Amazon stats of 2019.
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Many eCommerce businesses or individuals considering starting an online business on Amazon wonder whether Amazon FBA is still worth it or not.
When Amazon launched the FBA service, lots of businesses and individuals started selling products on Amazon.
For individuals, the opportunity to outsource logistics and sell products on Amazon was ingenious.
Selling on Amazon provides many benefits. On the one hand, Amazon has a lot of TRAFFIC.
On the other hand, customers RELY on Amazon.
Regarding this, many individuals were able to set up their own business, and eCommerce companies were able to increase their sales significantly when they offered their products on Amazon.
But what is the situation in these times? Has it become more challenging to sell products on Amazon?
Are the costs for promotion much higher than in past years?
Also, with Amazon Prime, customers no longer have to pay for shipping. This means more fees and less money for sellers.
So does Amazon FBA still work?
Perhaps the profit margins are already so low that it no longer makes sense to sell products on Amazon?
To find out if FBA still works, let's take a look at the situation in the past:
Product research and sourcing used to be more relaxed past times. Here's why:
These days, the situation on Amazon is more challenging. Here's why:
Looking at these facts, the current situation seems to be A LOT more competitive than the past one.
So the final question is:
Is Amazon FBA still worth it, or should you invest your time in an own online shop or even in other online marketplaces?
These days, searching for products to sell has become more complicated.
Many niches are already occupied with good sellers, but that doesn't mean it's impossible to find a niche and a product that sells GREAT.
Amazon is like any other market in the world, the competition is increasing, and more sellers are joining the marketplace every day.
However, you should never think that something has an END.
In most cases, people who think this way are likely to fail.
Selling on Amazon has merely become more complicated, but this does not mean that it's impossible to start a successful business on Amazon.
Anyone who can bring a better product to the market will be successful in the long run.
These stats back that up:
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It takes Amazon sellers about six months to one year to build a profitable Amazon business. From a business perspective, 6 months is not a very long time.
If you use Helium 10, you will also be able to perform the right marketing activities to speed up your business growth.
When it comes to sourcing your products, it's the same as with product research.
As an Amazon seller, you have to do more research and improve your negotiation skills. If you do it the right way, you will definitely find a manufacturer for your products.
There is even a tool from Jungle Scout with which you can discover all available manufacturers on plane earth.
You can check it out here.
You can check out information such as other customers of suppliers, average costs, and much more.
In any case, you can still build a profitable Amazon FBA business. As always, concentration and perseverance are the keys to success.
You can't build a profitable online business in a day or a week. If you stick to it, you'll be successful over time.
If you want to play it save, start selling books on Amazon.
Product research and searching for the right supplier have become more complicated, but Amazon FBA is worth it.
Also, there are always better tools available for Amazon sellers that make the work itself much more comfortable.
Make sure to check out our article about Helium 10.
In the end, here're are some useful how-to's, if you want to start a business on Amazon: