Is Amazon FBA worth it? Fulfillment by Amazon (FBA) enables everyone to sell products on Amazon. Using FBA, you can outsource storage, packaging, shipping, returns, and customer service to Amazon.
Many individuals and businesses started selling their products on Amazon in recent years. 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, their revenue was $280.52 million.
They were able to increase their sales by 3,76 times. However, this massive growth led to 2,734,713 active sellers and a total of 8,156,753 sellers (March 2020).
And that’s the problem for many individuals and businesses out there – massive competition.
People might wonder whether Amazon FBA is still worth it because of the high number of sellers on Amazon. This post will answer whether Amazon FBA still works and whether it’s worth selling on Amazon.
Here’s what you will learn:
- Important Amazon stats
- Is Amazon FBA worth it?
- If it’s worth it, why?
Here’s Everything You Need To Know About Amazon
To start quite easy, here’s an infographic about the most important Amazon stats of 2019.
Is Amazon FBA Still Worth It?
Many ecommerce businesses or individuals considering starting a business on Amazon wonder whether Amazon FBA is still worth it or not.
When Amazon launched the FBA service, many 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 has many benefits. On the one hand, Amazon has a lot of traffic. On the other hand, customers trust Amazon.
Regarding this, many individuals were able to set up their own business, and ecommerce companies increased their sales significantly when they offered their products on Amazon.
But what is the situation today? Has it become more challenging to sell products on Amazon. Are the costs for promotion higher than in past years?
Also, with Amazon Prime, customers no longer have to pay for shipping, which leads to more fees and less money for sellers.
So, does Amazon FBA still work? Or are the profit margins already too low that it no longer makes sense to sell products on Amazon?
To find out whether FBA still works, let’s take a look at the situation in the past:
Product research and sourcing were easier in the past. Here’s why:
- Less Amazon FBA sellers
- Fewer products listed on Amazon
- Worse products with bad listings
- Less work for manufacturers in China
- Low-quality articles
- No free shipping
Today, the situation on Amazon is more challenging. Here’s why:
- An increasing number of Amazon sellers, leading to increasing competition
- A growing number of products on the Amazon marketplace, which also indicates increasing competition
- Excellent products with good listings
- Chinese manufacturers have more work and are not dependent on individual sellers
- Amazon sellers offer high-quality products
- Shipping is free, because of Amazon Prime
Looking at these facts, the current situation seems to be more competitive than the past one.
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 Product Research More Challenging?
Today, searching for products to sell on Amazon 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.
There are great tools that can help you double your chance of success. For example, using Helium 10, you can still find money-making products to sell.
It’s by far the best research tool for Amazon sellers. You can go here and sign up for a free Helium 10 Account if you want.
There’s no way around using Helium 10 for product research.
Anyone who can bring a better product to the market will be successful in the long run.
These stats back that up:
It takes Amazon sellers about six months to one year to build a profitable Amazon business. From a business perspective, six months is not a very long time.
Using Helium 10, you can also 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. You should also check out our Jungle Scout Review.
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 great Amazon seller tools that make selling on Amazon much more easier.
Make sure to check out our article about Helium 10.