What Percentage of Amazon Sellers are Successful

Why does anyone want to be an Amazon seller?  There are more than a few reasons, including the ability to work for yourself, establish a business on the world’s largest eCommerce platform, or just to give it a try.

But how many Amazon sellers are actually successful? 

Quite a few, as it happens. By some estimates, slightly more than three-quarters of Amazon sellers classified as small- to medium-sized businesses are profitable.  

Which doesn’t mean that everyone who decides to be an Amazon seller is automatically going to be a successful Amazon seller. 

To increase your percentage of becoming a successful Amazon seller, here are some tried and true strategies to follow:

  • Advertise
  • Private label 
  • Sell high volume products
  • Time commitment
  • Fulfillment by Amazon
  • Monitor and recover FBA fees
amazon sellers advertise

Advertise

This seems obvious but apparently isn’t so obvious to Amazon sellers who are low performers. Arguably, one of the key characteristics of low-earning Amazon sellers is they don’t invest in advertising.

We get it. When margins are tight, you are understandably reluctant to spend money. In terms of marketing though, the old truism holds: you’ve got to spend money to make money. Whether it is Amazon PPC (pay per click), Google ads, Facebook ads, or other social media, or even in some cases traditional print and broadcast ads, effective advertising correlates directly with earning potential.

Just because you sell on Amazon, just because you sell quality products on Amazon, doesn’t mean buyers are going to purchase from you. They come to you because you make buyers aware you are an Amazon seller of quality products. That means advertising your brand and your products.

If you’re just getting started, we recommend Amazon PPC. Some 80% of Amazon sellers use Amazon PPC as well as other Amazon marketing tools.

Private Label

Most Amazon sellers favor private labeling (sourcing a product produced by another company but selling it under your own brand), in part because it allows you to build a brand identity that gains customer loyalty. (It also requires some higher up-front investment, but the investment usually earns higher profit margins than simply reselling other brands.)  

Private labeling only works, however, if you effectively market your brand. This goes beyond advertising, including creating a unique logo with an informative Amazon page employing effective graphics and promotional copy. It also means employing social media to drive external traffic to your Amazon business. This can also include creating your own external website for your brand, with links to your Amazon page to purchase your products.

Successful private label Amazon sellers with a recognized brand identity are also of more interest to potential investors. In fact, many Amazon sellers work at marketing their brand to increase business valuation with the long-term intent to sell their business for a premium. What many of these entrepreneurs typically do after selling one Amazon business is to start another.

High Volume Products

It stands to reason that the more you sell, the more you are likely to make. Most successful Amazon sellers carry at least 20 or more active product listings. 

However, it’s not enough to have a lot of products. The key to selling in high volumes requires offering added value with:

  • Overall high quality 
  • Innovations similar products lack
  • Colors and options similar products lack
  • Specific changes and requests resulting from customer feedback

A corollary to adding high-volume products to your portfolio is identifying product categories that aren’t moving as anticipated. These require discounting (even if it sometimes means at a loss) to clear inventory and, needless to say, discontinuing.

checking time, time commitment

Time Commitment

While selling on Amazon is a side business for some, it still requires a considerable time commitment, particularly if you are a solo entrepreneur. As everything we’ve discussed so far indicates, an Amazon business requires a time commitment. Successful Amazon sellers spend at least 30 hours a week on their business, if not more.

This isn’t a “put some product listings together and wait for orders to come through” kind of thing. If you really want to grow your business, you need to spend time on other activities besides product sourcing. This includes marketing on and off Amazon, earning and obtaining positive customer reviews, monitoring your finances, and managing expenses. 

If you aren’t committed to making your business successful, even if the business is a side-hustle, it probably won’t be.

Fulfillment by Amazon

One good way to save time, however, is Fulfillment by Amazon (FBA). This is a service where Amazon handles all your warehouse, inventory, and order fulfillment on your behalf. While you have to pay a fee for FBA, you’d have similar, in some cases even greater, costs if you handled these logistics on your own or paid another third-party provider. 

The advantages are that FBA generally makes it easier to run your business so you can concentrate your time on other growth activities.

Monitor and Recover Your FBA Fees

Which isn’t to say you can totally leave everything for Amazon to handle for you. Amazon makes mistakes, which is not surprising given its size and the millions of transactions handled on a daily basis. You are owed FBA reimbursement for any error or overcharge Amazon makes in handling your inventory and fulfilling orders. Unfortunately, Amazon doesn’t automatically reimburse you for these errors; in many cases, it is your responsibility to detect the errors and submit claims. Yet another time-consuming process that detracts from other activities essential to building your business.

Effectively managing expenses is another key characteristic of successful Amazon sellers. Unclaimed FBA reimbursements amount on average to anywhere between 1% to 3% of an Amazon seller’s annual revenues. If your sales total about a hundred thousand dollars annually, that’s at least $1,000 to $3,000 Amazon owes you. 

The easiest and least expensive way to make sure you recover FBA reimbursements owed to you is GETIDA (GET Intelligent Data Analytics).  

GETIDA reviews the previous 18 months of FBA activity to find discrepancies where reimbursement may apply and generates a report estimating the potential amount owed. 

If you decide to proceed, GETIDA files claims on your behalf. You are only charged a small percentage of successful claim amounts. And the first $400 in reimbursement are free.

It’s also free to sign up for GETIDA. Even better, you can get $400 in free FBA Reimbursements to try them out. Which is one reason why so many successful Amazon sellers like to use GETIDA.