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Many people claim that selling on Amazon is no longer profitable, a sentiment I encountered when I started my Amazon business over six years ago. Despite these claims, I persevered and have successfully generated over $5 million in sales. However, it's essential to evaluate whether these claims hold any truth today. This article will explore five significant assertions made by former Amazon sellers and analyze them using real data, providing insights into the current state of selling on Amazon.
A common complaint among Amazon sellers is that fees have skyrocketed, making it impossible to turn a profit. While it's true that fees have increased, my analysis of sales and fees reports from my Amazon account reveals that the percentage of revenue taken by Amazon has only decreased by 8% from 2022 to 2023. This means that sellers must adapt by sourcing smarter inventory and finding ways to enhance profit margins. Although fees are rising, they are not yet significant enough to deter me from selling on Amazon.
Another claim is that new sellers face significant barriers due to many brands being gated. While it's true that Amazon has restricted access to certain brands, there are still numerous opportunities for new sellers. Many brands remain accessible, and sellers can apply to sell gated products by submitting invoices from legitimate retailers. Additionally, some brands are auto-ungated, allowing new sellers to start selling immediately without the need for invoices.
The fear of account bans is prevalent among Amazon sellers, often stemming from experiences with Section 3 account reviews. These reviews require sellers to provide proof of legitimate inventory, and failure to do so can lead to account suspension. While I have not personally faced a Section 3 review, I have encountered challenges with brand approvals. Persistence is key in resolving these issues, and diversifying product offerings can mitigate risks associated with account health.
Despite claims that selling on Amazon is dead, data suggests otherwise. An analysis of product performance indicates that many items are selling faster than ever. With over 400,000 products actively selling faster in the last 90 days, there remains ample opportunity for sellers. Additionally, third-party sellers account for over 60% of Amazon's revenue, highlighting the platform's reliance on sellers like us. As retail stores close, more consumers are turning to Amazon for their shopping needs.
Many aspiring sellers believe they lack the funds to start an Amazon business, particularly in the private label space. However, starting with name brand products can require significantly less capital. For example, a seller aiming for $100,000 in monthly sales might need to invest around $50,000 in inventory. While starting an Amazon business does require some financial investment, it is possible to begin with a smaller amount, especially by leveraging low-cost products like used books.
In conclusion, while selling on Amazon has become more challenging over the years, the potential for profitability remains strong. The changes implemented by Amazon may be frustrating, but they are not insurmountable. As someone who has been in the business for over six years, I believe that with the right strategies and persistence, sellers can still thrive on the platform. If you're considering starting your Amazon journey, understanding the realities of the marketplace is crucial for success.
Q: Is selling on Amazon still profitable?
A: Yes, despite claims to the contrary, many sellers are still generating significant sales, with over 400,000 products actively selling faster than ever.
Q: Have Amazon fees increased significantly?
A: While fees have increased, the percentage of revenue taken by Amazon has only decreased by 8% from 2022 to 2023, indicating that sellers can still find ways to maintain profitability.
Q: Are gated brands a barrier for new sellers?
A: While some brands are gated, there are still many opportunities for new sellers, including brands that are auto-ungated or can be accessed by submitting invoices from legitimate retailers.
Q: Is account suspension a common issue for sellers?
A: The fear of account bans exists, but persistence and diversifying product offerings can help mitigate risks associated with account health.
Q: How much starting capital do you need to sell on Amazon?
A: While starting an Amazon business requires some financial investment, it is possible to begin with a smaller amount, especially by leveraging low-cost products like used books.
Q: What is the future of selling on Amazon?
A: The potential for profitability remains strong, and with the right strategies and persistence, sellers can still thrive on the platform despite the challenges.