Amazon isn’t just the largest online marketplace. It’s the third-largest company in the world by revenue: In 2021 alone, it reported a mind-boggling $469.82 billion in revenue.
But how many sellers on Amazon are actually profitable? What percentage of the nearly 2 million active sellers across 21 country marketplaces (and counting) see a return on their investment?
A lot more than you might think: 85% and 76% of Amazon sellers achieved profitability in 2021 and 2022, respectively — regardless of the COVID-19 pandemic, rising inflation levels, and global supply chain issues.
Let’s take a closer look at these and other numbers and what they might mean for the future of selling on Amazon. Read through to the end for some battle-tested tips on opening your own Amazon store and maximizing your chances of success.
How Many Active Amazon Sellers Are There?
There are nearly 2 million Amazon active sellers worldwide, according to the 2021 Amazon Small Business Empowerment Report. These are small and medium-sized businesses (SMBs) that are third-party selling partners separate from Amazon Retail.
- Amazon is the world’s biggest marketplace for online retail sales and the third-largest company by revenue. In 2021 alone, it generated a whopping $469.82 billion in revenue.
- As of October 2022, Amazon operates 21 country marketplaces: Australia, Belgium, Brazil, Canada, France, Germany, India, Italy, Japan, Mexico, Netherlands, Poland, Saudi Arabia, Sweden, Singapore, Spain, Turkey, U.K., United Arab Emirates, U.S, and limited operations in China.
- The U.S., U.K., and German Amazon marketplaces have the highest number of third-party top sellers. While the U.S. was down 15% from 2020, it remained the strongest market, with 434 top third-party sellers in 2021.
Sources: Amazon, JungleScout, Marketplace Pulse, Statista
How Many Amazon Sellers Are in the U.S.?
Amazon is home to over 500,000 sellers in the U.S., according to the 2021 Amazon Small Business Empowerment Report.
- Almost half (49%) of Amazon sellers live in the United States.
- Most are based in California: 18% of sellers live there. Florida and Texas come second with 9% each, followed by New York and Illinois with 6% each.
- Delaware (2,000+), Florida (50,000+), and Utah (7,500+) are the three states with the highest number of Amazon sellers per capita.
- Nearly one in three Americans have purchased something on Amazon.
- By 2025, the number of American Prime users is projected to surpass 176 million subscribers, up from 163.5 million in 2022.
- Amazon is the second-largest private employer in the U.S. The company hired 270,000 new employees in the second half of 2021 alone.
- In 2020, more than 200,000 new third-party sellers from around the globe joined Amazon’s U.S. store: a 45% increase from 2019.
- U.S. sellers sold over 3.8 billion products between September 1, 2020, and August 31, 2021. That averages 7,400 products per minute.
Sources: Amazon, JungleScout, Statista, TechJury, Washington Post
How Many New Sellers Join Amazon Every Day?
Between 700,000 and 800,000 new sellers join Amazon every year. While the rate isn’t currently accelerating, Amazon continues to add more than 2,000 new sellers daily.
- More than 472,000 sellers joined Amazon in 2021.
- This averages to around 1,824 new sellers daily.
- While Amazon’s marketplaces in North America — the U.S., Canada, and Mexico — are the largest, they report the slowest growth because they have been operating the longest.
Sources: Helium 10, Marketplace Pulse
Are Amazon Sellers Employed?
Only 22% of Amazon sellers support themselves through their Amazon business alone. The majority (70%) have additional income streams. 36% have a full-time job of 40 or more hours per week, and 25% are self-employed or own a business. In addition:
- 9% of sellers are employed and work up to 39 hours per week.
- 2% of sellers are retired.
- Students, unemployed job seekers, unemployed people with disabilities, and people furloughed due to COVID are 1% each.
Another 1% don’t currently work or seek work. These include people on parental leave and stay-at-home parents.
Source: JungleScout
SMBs Selling on Amazon.com U.S.
According to Amazon data, small and medium businesses (SMBs) selling on Amazon’s U.S. marketplace supported an estimated 1.1 million jobs in 2020.
- Purchases from SMBs account for around 60% of all Amazon sales.
- SMBs in the U.S. sell over 4,000 products per minute on average.
- During the 2020 holiday season alone, SMBs sold nearly 1 billion items on Amazon U.S.
- The majority (85%) of SMBs selling on Amazon opened new jobs in 2020, compared to just 52% of those that don’t sell through Amazon.
Source: Amazon
How Many Amazon Sellers Use Amazon’s FBA?
Fulfillment by Amazon (FBA) is a service that allows Amazon sellers to outsource storage, shipping, delivery, customer service, and returns to Amazon. At least 73% of sellers have joined Amazon FBA.
- Around 50% of sellers on Amazon U.S. use Amazon FBA, saving over 30% on average in fulfillment costs compared to other shipping providers.
- Sellers report a 20-25% increase in sales on average after joining FBA.
How Much Do Amazon Sellers Make?
The earnings per month of nearly half of Amazon sellers range between $1,000 and $2,500. Some report earning up to $45,000 per year.
However, these are conservative estimates only. It’s not impossible to make a six-figure annual profit as an Amazon seller. Some 4,000 U.S. sellers surpassed $1 million in sales for the first time between September 1, 2020, and August 31, 2021.
That said, all Amazon sellers pay fees that offset some of their earnings, including:
- Amazon FBA fees: These vary based on the size and weight of the product. Smaller and lighter items cost less to handle.
- Membership fees: The amount depends on the seller’s plan. Individual plans allow sellers to sell up to 40 items per month at $0.99 per item sold. Sellers on a Professional plan can sell more than 40 items for a $39.99 monthly fee.
- Referral fees: Sellers pay a small referral fee for each item they sell.
The best-selling product categories are:
- Books
- Clothing
- Electronics
- Video Games
- Toys & Games
- Camera & Photo
- Shoes & Jewelry
Sources: Amazon, Helium 10, liveaboutdotcom, Statista
Amazon Sellers That Saw an Increase in Profits from 2020 to 2021
Nearly half (45%) of Amazon sellers reported an increase in profits between 2020 and 2021. That was despite the fact that some consumers went back to shopping in physical retail stores.
- Not everyone was that successful: In 2021, 30% of sellers on Amazon Marketplace lost over $10,000 in online sales due to supply chain issues.
Source: JungleScout
What Percentage of Amazon Sellers Achieve Profitability?
A surprisingly high percentage of sellers on Amazon are successful. Running a store on Amazon continues to be profitable despite the COVID-19 pandemic, rising inflation levels, and global supply chain issues. A whopping 85% of Amazon sellers were profitable in 2021. Three-quarters (76%) achieved profitability in 2022 as well.
Sources: JungleScout, Renolon
How Do You Become an Amazon Seller?
Becoming an Amazon seller is easy. All you need to do is select a membership plan, open a seller account, choose your selling and fulfillment strategies, and upload your products.
- Choose a seller plan: Opt for the Individual plan to sell up to 40 products a month for $0.99 each or the Professional plan to sell unlimited products for $39.99 a month. Note that Amazon charges a referral fee on each transaction for both plans. The referral fee is a percentage of the sale amount that varies by product category.
- Decide on a selling strategy: You can resell products that are already available on Amazon, manufacture your own products, source goods to sell under a private label, or a combination of the above.
- Create an Amazon seller account: Use your existing customer account or set up a professional one with your business email. To open a seller account, you will need a government ID, a phone number, your tax information, a globally recognized credit card, and a bank account to receive your sales proceeds.
- Chose a fulfillment method: You can choose between Fulfillment by Merchant (FBM), in which you store, pack, and ship your goods yourself, or Fulfillment by Amazon (FBA) to outsource these responsibilities to Amazon after sending your products to an Amazon fulfillment center.
- Add your products: Note that some product categories are open to all sellers, but others require a Professional seller account or approval from Amazon. There are also products that can’t be sold by third-party sellers at all. You can learn more about product restrictions on Amazon’s Seller Central Help.
- Write the product listings: Each product requires a dedicated listing in Seller Central. If another Amazon store offers the same product, you only need to match the existing listing. If your product is unique, you must create a new listing. All listings feature a product identifier (UPC, EAN, GTIN, or ISBN), a product ID or SKU, product details (brand, name, category, description, and images), and offer details (price, available quantity, product condition, and delivery options). You should also include keywords and search terms to help customers find your product.
- Fulfill Amazon’s Perfect Launch plan: Perfect Launch is a five-step plan for the first 90 days after launching your store. It consists of five programs — Brand Registry, A+ Content, Amazon FBA, Automated Pricing, and Advertising. Amazon data suggest that new sellers who complete the Perfect Launch within that timeframe become more profitable more quickly.
- Attract customers: Consider offering expedited delivery through Amazon Prime, which you can get by becoming an Amazon FBA member. You may also want to pay for Amazon Advertising to reach a wider audience.
Sources: Amazon, smartminded
Tips on Becoming a Successful Amazon Seller
Being an Amazon seller is hard work, but these workarounds can help you become better at online selling faster:
- Take good product photos: High-quality visuals will help customers picture your products better. For best results, take product photos against a plain background and in a well-lit area. Avoid using filters and depicting other products not included in the offer. Make sure to include pictures of the product from several angles and consider adding a video as well.
- Be descriptive: The more information you provide about your products, the better. Use all available space on the listing to describe each item, including the snippet at the top of the page.
- Understand how Amazon SEO works: Amazon works a lot like a search engine. Familiarize yourself with its search algorithm and learn how to maximize sales using the right keywords and search terms and well-written copy.
- Package items with care: If fulfilling orders yourself, invest in high-quality packaging to prevent damage to products in transit. Thoughtful touches like handwritten thank-you notes and free samples can also go a long way.
Conclusion
It remains to be seen whether Amazon will repeat or surpass its 2021 record of $469.82 billion in revenue in 2023 and beyond. We also don’t know if it will maintain its average of around 1,824 new sellers daily.
What we do know is that the company seems to prepare for further growth as it plans expansion into four new countries — Chile, Colombia, Nigeria, and South Africa — by mid-2023 after launching its latest marketplace in Belgium in 2022.
The future seems bright for the world’s biggest online marketplace, especially considering how many sellers on Amazon achieved profitability in the midst of a raging global pandemic, sky-high inflation, and severe supply chain issues: a shocking 85% and 76% in 2021 and 2022, respectively.
