So you’re thinking about starting an Amazon FBA business. You’ve seen the gurus making big money on YouTube and you want a piece of the action.
But before you take the plunge, an important question is – what are your realistic chances of success? In other words, what is the Amazon FBA success rate?
Let’s break it down…
How Profitable is Amazon FBA?
According to data from Jungle Scout in 2023:
- 25% of FBA sellers make between $1,000-$25,000 per month in sales
- 20% have monthly net profits of $1,250 to $6,250
- 20% generate over $6,000 in monthly net profit
That top 20% making over $6k per month includes major brands and wholesalers. For regular sellers, it’s more like 10%.
So around 1 in 10 FBA sellers reach that coveted 6-figure income level.
Another stat – 20% of FBA sellers produce over $100,000 in lifetime profit.
Here’s a summary:
| Monthly Sales | % of Sellers |
| Under $500 | 17% |
| $1,000 – $5,000 | 27% |
| $5,000 – $10,000 | 12% |
| $10,000 – $25,000 | 16% |
| $25,000 – $50,000 | 12% |
| $50,000 – $100,000 | 8% |
| $100,000 – $250,000 | 5% |
Seems like solid chances, right? But remember, sales don’t equal profit. Let’s look at profit margins…
| Profit Margin | % of Sellers |
| 1-5% | 7% |
| 6-10% | 16% |
| 11-15% | 19% |
| 16-20% | 17% |
| 21-25% | 19% |
| 26-50% | 16% |
| 51-100% | 3% |
| Not Profitable | 8% |
Over 70% of sellers enjoy a profit margin above 10%. That’s pretty good compared to brick-and-mortar businesses.
Nearly 20% achieve profit margins of 25% or higher. Very healthy.
So in terms of profit potential, FBA looks solid. But there are still risks and costs that can eat into your margins.
How Much Does it Cost to Start Selling on Amazon FBA?
To succeed in FBA, you need to invest both money and time upfront.
Money
Most gurus claim you only need $5,000 start-up capital for FBA.
In reality, it’s more like $15,000+:
- Product research & validation
- Building a brand & website
- Product prototyping & manufacturing
- Shipping & customs
- Amazon fees (referral, FBA, storage, etc)
- PPC advertising
Underestimating costs is why most new sellers fail.
Here’s how sellers funded their FBA business initially:
- 77% used personal savings
- 27% borrowed on credit cards
- 13% borrowed from family
- 28% took business loans
Time
You also need to dedicate real time to running your FBA biz:
- 10% spend 21-30 hours per week
- 14% spend over 40 hours per week (full-time)
- 53% spend under 10 hours per week
Dedicating consistent time in the early days is vital.
How Long Does It Take To Be Profitable on Amazon FBA?
Don’t expect overnight success.
For new private label products, it takes:
- 3-6 months to launch your first product
- 6-12 months to optimize your listing and become profitable
Here’s a breakdown of timeframes:
| Time To Profit | % of Sellers |
| Under 3 months | 15% |
| 3-6 months | 25% |
| 6-12 months | 39% |
| 1-2 years | 14% |
| Still not profitable | 8% |
The average is 6-12 months to see a profit. Just like any other business, Amazon FBA takes real dedication over a sustained period to work.
Be patient, keep iterating, and learn from mistakes.
Professional Product Videos Increase Sales
In addition to optimizing your listings, having high-quality product videos can drastically improve conversions and sales.
Professional video production companies like Product Video Studio specialize in creating captivating and effective product videos for e-commerce brands selling on Amazon.
Investing in engaging product videos with demonstrations, animations, dynamic b-roll, etc. can increase conversion rates by over 80%. Videos also improve your rankings.
Product Video Studio offers affordable Amazon-optimized product video production starting. Our videos showcase key features and help turn visitors into paying customers.
Having amazing product videos gives your listing a highly polished look that builds trust with customers. It’s one of the highest-returning investments you can make.
Why Do Some Sellers Fail on Amazon FBA?
Based on seller surveys and analysis of closed FBA stores, here are the main reasons small businesses fail on Amazon:
1. Bad Business Model
Wholesale, private label, retail arbitrage — choose a business model that matches your skills and interests. Don’t just copy what the YouTube gurus do.
2. No Product Research
Research properly instead of jumping on trends or copying others. Use tools like Jungle Scout to assess demand.
3. Poor Customer Support
Stay on top of customer communication, reviews, and refunds/returns to keep your rating high.
4. Unrealistic Expectations
Don’t buy into gurus promising quick millions. Building an FBA brand takes time and realistic goals.
5. Low Start-Up Capital
As mentioned above, most gurus vastly underestimate start-up costs. Assume you’ll need at least $15k, not $5k.
Key Tips For Amazon FBA Success
Follow this advice from successful FBA entrepreneurs:
- Start wide, not deep – Test lots of products in small quantities to begin with. This reduces risk and helps you learn.
- Just take action – Don’t overanalyze. Build momentum by starting small and staying consistent.
- Connect with other sellers – Getting advice from peers is invaluable. Join Facebook groups and forums like the Fulfillment by Amazon subreddit.
- Learn to problem solve – Running any business involves overcoming challenges. Build resilience and don’t be afraid to make mistakes.
Conclusion
Building a profitable, sustainable business on Amazon FBA is possible, but requires grit and realistic expectations.
- Around 10% of sellers reach over $100k yearly income
- 20% generate over $100k lifetime profit
So while the potential is huge, your chances of wild success are still modest. Treat FBA like any other business that takes time, money, and hard work to grow. Do it because you enjoy the process of selling, not because you expect a get-rich-quick scheme.
Frequently Asked Questions
Q: How much money do you need to start selling on Amazon FBA?
A: While some gurus claim you only need $5k, most successful FBA businesses start with around $15k or more in start-up capital. This covers all the initial costs like product development, inventory, Amazon fees, etc.
Q: Can you be profitable in the first 3 months?
A: It’s possible but unlikely. 15% of sellers manage to turn a profit within 3 months. For most though, it takes 6-12 months to optimize listings and become profitable.
Q: What is a good profit margin for Amazon FBA?
A: A profit margin of over 10% is considered decent. The top 20% of sellers achieve margins of 25% or higher. Anything under 5% is generally too low to sustain a business.
Q: How many hours per week should you commit?
A: When starting out, plan to invest around 20-30 hours per week. 14% of successful FBA entrepreneurs work full-time hours of 40+/week in their business.
Q: Does selling on Amazon FBA still work in 2023?
A: Yes, absolutely. Despite growing competition, the continued growth of e-commerce and Amazon’s huge customer base still offer huge opportunities if you run your FBA business correctly.
