Global e-commerce is predicted to grow from $3.3 trillion today to $5.4 trillion in 2026 - according to investment firm Morgan Stanley.
Of the $870.8 billion in US e-commerce sales in 2021, 41% of all orders and 63% of initial product searches took place on Amazon.
It’s no wonder that more and more Amazon buyers are taking advantage of the FBA business model to become Amazon sellers and build an additional stream of income.
So… Is Amazon FBA still worth it in 2022?
The short answer is yes - and in this article, we go over every detail:
Every year after FBA’s launch in 2006, we’ve heard our very own friends share the same worries:
It’s too late to start.
There are too many sellers.
Too much competition.
And year after year, they watch as more sellers enter the marketplace and make serious profits… yet they express the same fears again - never making any progress toward their goals.
While it’s true that competition has increased on Amazon and other e-commerce platforms, so too has the demand for online shopping.
Amazon has 310 million customers worldwide, and 90 million of these are Amazon Prime members
Amazon dominates the e-commerce market. Compared to Amazon’s 41% of 2021’s total e-commerce sales, Walmart, the next closest competitor, accounted for only 6%.
In 2021, Amazon’s revenue was $469 billion - compared to $386 billion in 2020. Of this revenue, nearly a quarter (22%) is driven by third party sellers. 89% of those third party sellers use Fulfillment by Amazon.
But how much are these sellers actually making? Let’s find out.
According to Amazon’s 2021 Small Business Empowerment Report, the number of US sellers surpassing $1 million in sales grew by nearly 15% during 12 months, ending on August 31st 2021.
Jungle Scout, a leading platform for Amazon FBA businesses, ran a survey of thousands of their extensive network of sellers. According to their findings, most sellers make at least $1000-$5000 a month in sales - while the most successful sellers make $100K+ per month.
But what about profits? The higher the profit margin, the better… and 65% of sellers see profit margins higher than 10%. Across all respondents, 64% said they were profitable within the first year of selling.
Another way to consider the growth trajectory of Amazon FBA businesses is to look at how many successful Amazon entrepreneurs sell their businesses to investors. In 2021, the marketplace Empire Flippers sold 106 Amazon FBA businesses for a total of $122,595,363.97. Compared to 2018, Empire Flippers’ 2021 numbers showed a 675.9% increase in sales activity.
That means your earning potential doesn’t stop at your monthly profits. If you build a powerful brand from the start and you achieve profits - your business will draw in the eyes of investors or buyers.
Starting any new venture is bound to cause some worry - and investing in an Amazon FBA business is no exception. There are several valid fears that hold potential sellers back. Let’s walk through them.
I don’t think I have enough capital to invest.
Starting any business requires some investment. FBA is one of the leanest ways to sell product, as you don’t need to worry about leasing a space or funding staff - Amazon takes care of that for you.
You have control over the type of product you decide to sell, and how much initial inventory you choose to purchase in the beginning. Maybe instead of choosing a $65 product as your first offering, you start your Amazon store with a $15 product.
I don’t know enough. What if I pick the wrong product?
Product choice can absolutely make or break your business. Thankfully, Amazon FBA has been around for quite some time now (since 2006) and there are tried and true methods to determine whether a product is a winner or a loser.
There are plenty of tools like Jungle Scout or Viral Launch available to help you research your product to see if it’s a good fit.
To reduce the analysis paralysis, you may appreciate some guidance.
There are tons of free YouTube videos available if you are curious about the world of Amazon FBA. There are some nuggets of wisdom, but you do have to spend a lot of time trawling through content and figuring out what is useful.
Another way is through purchasing a course. There are many Amazon gurus with courses which you follow module by module. While many have found success going this route, there are some risks. The Amazon landscape changes often, and there are no guarantees that the course you purchase will be frequently updated with the latest, most relevant content.
Neither of these options are ideal because the onus is on you to do the diligent research, complete the course, and execute with precision. At the end of the day, you’re still a beginner, and you don’t have the trust or faith that your time, headaches and efforts will be rewarded.
Wouldn’t it be great to have a partner who has already done what you’re venturing to do?
They have launched and scaled several Amazon businesses before, and their expertise is at your fingertips.
They work with you each step of the way, vetting your product ideas, negotiating with their trusted manufacturers, building your launch plan and overseeing your advertising… taking away so much of the guesswork, headaches and hundreds of hours you’d have had to spend if you did it all on your own.
And because they’re your business partners, they are motivated to work toward your success. With their help, your business is propelled toward financial freedom much faster than you ever thought was possible.
This is what the HIVE Partnership Program offers.
Together, our team of experts have built ___X___ profitable e-commerce businesses over the past __X__ years.
As HIVE partners, you take advantage of our team’s collected knowledge, expertise and network to give yourself the best chance of a profitable e-commerce business - achieved while using a fraction of your time and energy, while also being among the lowest cost business start-ups in today’s digital economy.
Amazon gets 2.7 billion site visits per month.
The sooner you get started, the sooner your future customers will find your perfect product. Who knows… this side hustle could grow into a business that sets you financially free.
There’s no better time to start an online business than now - and no better business partners than HIVE.
Schedule a call today to learn more about how we can work together, and how you can join our community of __X__ partners.
