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AgainstAllOdds

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The purpose of this thread is to present real, concrete facts and numbers on why starting a business on Amazon might be the absolute dumbest, lowest ROI thing you could do. It's not based on anecdotes. It's not based on hypotheticals. It's based around numbers published by one of the most pro-Amazon sites out there: JungleScout. However, instead of presenting it the way JungleScout wants to, I'll break down the numbers into what they really mean.

A quick summary: The average person fails at Amazon. Of those that succeed, the average person makes $9,000 a year at $10 per hour. To get there, they invest 10+ months of their time, and $4,000. Amazon has reached the point of "Uber" where it has misled people into believing that they're starting a real business that's generating real returns - when in reality the average seller is slaving away at $10 per hour.

In later posts, feel free to share theories and anecdotes. The Amazon-brainwashed crowd, feel free to post emotional responses and select anecdotes. In this post, I'll dive right into the numbers.

Before we begin, let me note the inspiration for this thread: @jpanarra's "New Sellers Earn Between $26,000 To $810,000 Per Year In Profit" - a thread based around data that was taken from the following primary source: How Much Money Do Amazon Sellers Make? | Jungle Scout. I was originally going to write a quick reply to his post, but as I started looking at the language and numbers, I started breaking them down and noticed exactly how bad they really were. That's how this thread was born. If the language is a little off, note that it was originally intended as a reply before the data became valuable enough to make its own thread.

So let's get to it.

First, let's start with the note that the data is published by JungleScout - whose primary incentive is to get more people selling on Amazon. Next, let's look at exactly who the data is based on:

"Between November 14 and December 10, 2019, Jungle Scout surveyed 2,063 Amazon sellers about their experiences. This article references responses from 1,046 experienced Amazon sellers who have more than a year of selling experience and at least one live product listing."

These guys literally surveyed 2,063 people. Decided that half of them suck and don't support their findings. Tossed them out, and kept only half the responses, 1,046 sellers that had attained "some" success.

Why?

Because the 1,017 others didn't fit their narrative and PR push.

If you look at what that actually means, it means that over 50% of preselected Amazon sellers (that were serious enough to have a JungleScout account), fared worse than the data that will be presented below. Add to that all the people without a js account, all the people that have already failed, or those that will fail, and you're left with a very high percentage of sellers that have been huge disappointments.

Of the 50% left, they further fudged the numbers using misleading statements and improper calculations. Let's start with an example of one of those statements:

"For 67.2% of the sellers, the profit margin is more than 10%. If that is not impressive enough, 36% see profit margins above 20%."
This statement at face value looks impressive. Here's what it actually means:
  • 32.8% of sellers make between 0-10%
  • 31.2% of sellers make between 10-20%
  • 36% of sellers making profit margins above 20%
And here's what that means in terms of average person...

29562

Using the chart above, it means that the median profit margin per Amazon seller is 15% (and note: I said MEDIAN, not "average" or some bullshit that Jungle Scout will use to change perception). That's from the product. Not net after including R&D, branding, EMPLOYEE costs, and all other costs. If you factor in those costs, then the true net margin will be a lot lower.

Is that still impressive? Could be. But is it as impressive as the statement that they built around the data? Definitely not.

Next, let's see how they present sales numbers:

"A little over half or 50.7% make from $1,000-$25,000/month. In terms of annual sales, it can mean anywhere from $12,000-$300,000.

Another one in five (20%) make $25,000 – $250,000/month, totaling annual sales between $300,000 and $3,000,000. But there is another small group (3.3%) making more than $250,000 in monthly sales.

On the lower side of the earning scale, 23.8% of sellers make less than $1,000 per month, with 2.1% not knowing how much they make."
Another quote that seems incredibly impressive. In reality, far from it.

That's what the article presents for sales numbers. Let's see what these numbers actually mean in terms of sales percentiles based on this statement:
  • 0 percentile: Lose money
  • 24th percentile: $1,000 in sales per month
  • 80th percentile: $25,000 in sales per month
  • 99.9th percentile: $250,000 in sales per month
From their statement, they made you think that 1 in 5 sellers do $250k+ in sales per month. However, one in five people don't do $250k in sales per month. One in a hundred does. The exception to the rule. The outlier.

To dive deeper, luckily for us, JungleScout was naive enough to publish their full data:

29563

So using this info, we can continue and break down the data even more into what it actually means:

2% don't know their sales, so we'll just add them into the lower tier group (likely wantrepreneurs), making the rest of the percentiles as follows:
  • 0-17th percentile: Make under $500 in sales (aka - lose money)
  • 17-26th percentile: $500 to $1,000 in sales
  • 26-48th percentile: $1,000 to $5,000 in sales
  • 48-61st percentile: $5,000 to $10,000 in sales
  • 61-76th percentile: $10,000 to $25,000 in sales
  • 76-85th percentile: $25,000 to $50,000 in sales
  • 85-92nd percentile: $50,000 to $100,000 in sales
  • 92-97th percentile: $100,000 to $250,000 in sales
  • 97-99.9th percentile: $250,000+ in sales
The average person (50th percentile) makes $5,000 in sales per month. Think about that.

If you don't understand managerial or financial accounting, then you'll assume that the number is good. Afterall, the average person doesn't "make" $5,000 at their job every month. Amazon has to be the way. Or does it. We have to ask the next question...

So what's that mean in terms of profit per year? Not sales, but profit.

If we use JungleScout's bullshit metric, then that's a ton of money. If we use the median profit margin of 15% (which it is according to the chart above), then here's what that means:
  • 0-17th percentile: Lose money a year.
  • 17-26th percentile: $900 to $1,800 in GROSS profit per year
  • 26-48th percentile: $1,800 to $9,000 in GROSS profit per year
  • 48-61st percentile: $9,000 to $18,000 in GROSS profit per year
  • 61-76th percentile: $18,000 to $45,000 in GROSS profit per year
  • 76-85th percentile: $45,000 to $90,000 in GROSS profit per year
  • 85-92nd percentile: $90,000 to $180,000 in GROSS profit per year
  • 92-97th percentile: $180,000 to $450,000 in GROSS profit per year
  • 97-99.9th percentile: $450,000+ in GROSS profit per year
The average seller grosses $9,000 per year from their Amazon business.

And I know you wantrepreneurs will say "Yeah, but look at the top brackets, those guys are killing it". Yeah, they are, but how much are they spending on employees?

Those guys that are doing $450,000 gross per year? How many employees do you think they have? And how much money do you think they're actually putting into their pocket end of the year? I won't answer this question since there's too much variability, however I will give you concrete data for the next point.

"Ok, so $9,000 a year. That would help me a lot with my life. How much do I have to work in order to make that money?"

Here's the breakdown from Junglescout:
  • Fewer than 4 hours per week: 13%
  • 4-10 hours: 24%
  • 11-20 hours: 20%
  • 21-30 hours: 15%
  • 31-40 hours: 10%
  • 41-50 hours: 9%
  • 51-60 hours: 3%
  • More than 60 hours: 6%
What's that actually mean in terms of percentiles?
  • 0-13th percentile: 0-4 hours per week
  • 13-37th percentile: 4-10 hours per week
  • 37-57th percentile: 11-20 hours per week
  • 57-72nd percentile: 21-30 hours per week
  • 72-82nd percentile: 31 to 40 hours per week
  • 82-91st percentile: 41-50 hours per week
  • 91-94th percentile: 51-60 hours per week
  • 94-99.9th percentile: 60 hours + plus week
The average person works close to 20 hours per week. That's what the means. For argument's sake, let's estimate that down to 18 hours per week.

The average person works 18 hours per week on their Amazon "business" to make $9,000 a year. Still worth it?

Let's break that down per hour:

18 hours per week * 50 weeks [two vacation weeks] = 900 hours per year.

$9,000 / 900 hours = $10 per hour.

The average "successful" seller works at $10 per hour to make $9,000 per year.

But wait... that's not all folks. There's also a startup cost!

You have to research Amazon, learn the Amazon skill sets, learn how to import, pay for courses, samples, moulds, manufacturing costs for products that you'll mess up and have to throw out, etc.

That all takes money and time.

How much money and time? Here's the breakdown from JungleScout:

They asked their sellers "How long does it take to become profitable on Amazon?":
  • Profits within 3 months: 22%
  • Profits within 3-6 months: 22%
  • Profits within 6 months-1 year: 23%
  • Profits within 1-2 years: 13%
  • Profits within more than 2 years: 3%
The median person took over 6 months of time to become profitable. My estimate, is around 9 months for the 50th percentile mark.

Disappointed?

Let me disappoint you further.

Here's the data set when looking solely at people that started selling in 2018 and 2019:
  • Profits within 3 months: 16%
  • Profits within 3-6 months: 23%
  • Profits within 6 months-1 year: 24%
For people that jumped in recently, the time to be profitable increased significantly. My estimate for the average: 10 months.

Oh, and to add even more salt: the data above doesn't include sample, research, or studying time, the entire wantrepreneur phase where you're taking courses and reading threads on the fastlane forum.

And note: "Time to be profitable" can otherwise be written as "Time to stop losing money". Because that's what it really is. It takes the average person ten months to stop losing money on top of whatever they spent on courses.

So how much money do people "invest" to get started on Amazon?

Here's how much JungleScout users spent:
  • Sellers spent less than $500: 17%
  • $500-1,000: 12%
  • $1,001-2,500: 13%
  • $2,501-5,000: 18%
  • $5,001-10,000: 21%
  • More than $10,000: 21%

The median person spent about $4,000 to get started selling on Amazon.

So all in all, using JungleScout's data...

The average seller spends $4,000 and 10+ months to get started on Amazon. Once they're up and running, they can expect to make $9,000 a year at $10 per hour. From that, they have to subtract out employee costs, and other expenses, likely netting them a lot less.

Oh ... and that's if you're successful. If you're in the 50%+ category of people that JungleScout deleted from its "data set", then just expect to lose money altogether.

Amazon still sound cool? @MJ DeMarco
 

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francevalue

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Great post! Add to that they can terminate your account anytime they want, and you're screwed!
 
D

Deleted69685

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The purpose of this thread is to present real, concrete facts and numbers on why starting a business on Amazon might be the absolute dumbest, lowest ROI thing you could do. It's not based on anecdotes. It's not based on hypotheticals. It's based around numbers published by one of the most pro-Amazon sites out there: JungleScout. However, instead of presenting it the way JungleScout wants to, I'll break down the numbers into what they really mean.

A quick summary: The average person fails at Amazon. Of those that succeed, the average person makes $9,000 a year at $10 per hour. To get there, they invest 10+ months of their time, and $4,000. Amazon has reached the point of "Uber" where it has misled people into believing that they're starting a real business that's generating real returns - when in reality the average seller is slaving away at $10 per hour.

In later posts, feel free to share theories and anecdotes. The Amazon-brainwashed crowd, feel free to post emotional responses and select anecdotes. In this post, I'll dive right into the numbers.

Before we begin, let me note the inspiration for this thread: @jpanarra's "New Sellers Earn Between $26,000 To $810,000 Per Year In Profit" - a thread based around data that was taken from the following primary source: How Much Money Do Amazon Sellers Make? | Jungle Scout. I was originally going to write a quick reply to his post, but as I started looking at the language and numbers, I started breaking them down and noticed exactly how bad they really were. That's how this thread was born. If the language is a little off, note that it was originally intended as a reply before the data became valuable enough to make its own thread.

So let's get to it.

First, let's start with the note that the data is published by JungleScout - whose primary incentive is to get more people selling on Amazon. Next, let's look at exactly who the data is based on:

"Between November 14 and December 10, 2019, Jungle Scout surveyed 2,063 Amazon sellers about their experiences. This article references responses from 1,046 experienced Amazon sellers who have more than a year of selling experience and at least one live product listing."

These guys literally surveyed 2,063 people. Decided that half of them suck and don't support their findings. Tossed them out, and kept only half the responses, 1,046 sellers that had attained "some" success.

Why?

Because the 1,017 others didn't fit their narrative and PR push.

If you look at what that actually means, it means that over 50% of preselected Amazon sellers (that were serious enough to have a JungleScout account), fared worse than the data that will be presented below. Add to that all the people without a js account, all the people that have already failed, or those that will fail, and you're left with a very high percentage of sellers that have been huge disappointments.

Of the 50% left, they further fudged the numbers using misleading statements and improper calculations. Let's start with an example of one of those statements:



This statement at face value looks impressive. Here's what it actually means:
  • 32.8% of sellers make between 0-10%
  • 31.2% of sellers make between 10-20%
  • 36% of sellers making profit margins above 20%
And here's what that means in terms of average person...

View attachment 29562

Using the chart above, it means that the median profit margin per Amazon seller is 15% (and note: I said MEDIAN, not "average" or some bullshit that Jungle Scout will use to change perception). That's from the product. Not net after including R&D, branding, EMPLOYEE costs, and all other costs. If you factor in those costs, then the true net margin will be a lot lower.

Is that still impressive? Could be. But is it as impressive as the statement that they built around the data? Definitely not.

Next, let's see how they present sales numbers:



Another quote that seems incredibly impressive. In reality, far from it.

That's what the article presents for sales numbers. Let's see what these numbers actually mean in terms of sales percentiles based on this statement:
  • 0 percentile: Lose money
  • 24th percentile: $1,000 in sales per month
  • 80th percentile: $25,000 in sales per month
  • 99.9th percentile: $250,000 in sales per month
From their statement, they made you think that 1 in 5 sellers do $250k+ in sales per month. However, one in five people don't do $250k in sales per month. One in a hundred does. The exception to the rule. The outlier.

To dive deeper, luckily for us, JungleScout was naive enough to publish their full data:

View attachment 29563

So using this info, we can continue and break down the data even more into what it actually means:

2% don't know their sales, so we'll just add them into the lower tier group (likely wantrepreneurs), making the rest of the percentiles as follows:
  • 0-17th percentile: Make under $500 in sales (aka - lose money)
  • 17-26th percentile: $500 to $1,000 in sales
  • 26-48th percentile: $1,000 to $5,000 in sales
  • 48-61st percentile: $5,000 to $10,000 in sales
  • 61-76th percentile: $10,000 to $25,000 in sales
  • 76-85th percentile: $25,000 to $50,000 in sales
  • 85-92nd percentile: $50,000 to $100,000 in sales
  • 92-97th percentile: $100,000 to $250,000 in sales
  • 97-99.9th percentile: $250,000+ in sales
The average person (50th percentile) makes $5,000 in sales per month. Think about that.

If you don't understand managerial or financial accounting, then you'll assume that the number is good. Afterall, the average person doesn't "make" $5,000 at their job every month. Amazon has to be the way. Or does it. We have to ask the next question...

So what's that mean in terms of profit per year? Not sales, but profit.

If we use JungleScout's bullshit metric, then that's a ton of money. If we use the median profit margin of 15% (which it is according to the chart above), then here's what that means:
  • 0-17th percentile: Lose money a year.
  • 17-26th percentile: $900 to $1,800 in GROSS profit per year
  • 26-48th percentile: $1,800 to $9,000 in GROSS profit per year
  • 48-61st percentile: $9,000 to $18,000 in GROSS profit per year
  • 61-76th percentile: $18,000 to $45,000 in GROSS profit per year
  • 76-85th percentile: $45,000 to $90,000 in GROSS profit per year
  • 85-92nd percentile: $90,000 to $180,000 in GROSS profit per year
  • 92-97th percentile: $180,000 to $450,000 in GROSS profit per year
  • 97-99.9th percentile: $450,000+ in GROSS profit per year
The average seller grosses $9,000 per year from their Amazon business.

And I know you wantrepreneurs will say "Yeah, but look at the top brackets, those guys are killing it". Yeah, they are, but how much are they spending on employees?

Those guys that are doing $450,000 gross per year? How many employees do you think they have? And how much money do you think they're actually putting into their pocket end of the year? I won't answer this question since there's too much variability, however I will give you concrete data for the next point.

"Ok, so $9,000 a year. That would help me a lot with my life. How much do I have to work in order to make that money?"

Here's the breakdown from Junglescout:
  • Fewer than 4 hours per week: 13%
  • 4-10 hours: 24%
  • 11-20 hours: 20%
  • 21-30 hours: 15%
  • 31-40 hours: 10%
  • 41-50 hours: 9%
  • 51-60 hours: 3%
  • More than 60 hours: 6%
What's that actually mean in terms of percentiles?
  • 0-13th percentile: 0-4 hours per week
  • 13-37th percentile: 4-10 hours per week
  • 37-57th percentile: 11-20 hours per week
  • 57-72nd percentile: 21-30 hours per week
  • 72-82nd percentile: 31 to 40 hours per week
  • 82-91st percentile: 41-50 hours per week
  • 91-94th percentile: 51-60 hours per week
  • 94-99.9th percentile: 60 hours + plus week
The average person works close to 20 hours per week. That's what the means. For argument's sake, let's estimate that down to 18 hours per week.

The average person works 18 hours per week on their Amazon "business" to make $9,000 a year. Still worth it?

Let's break that down per hour:

18 hours per week * 50 weeks [two vacation weeks] = 900 hours per year.

$9,000 / 900 hours = $10 per hour.

The average "successful" seller works at $10 per hour to make $9,000 per year.

But wait... that's not all folks. There's also a startup cost!

You have to research Amazon, learn the Amazon skill sets, learn how to import, pay for courses, samples, moulds, manufacturing costs for products that you'll mess up and have to throw out, etc.

That all takes money and time.

How much money and time? Here's the breakdown from JungleScout:

They asked their sellers "How long does it take to become profitable on Amazon?":
  • Profits within 3 months: 22%
  • Profits within 3-6 months: 22%
  • Profits within 6 months-1 year: 23%
  • Profits within 1-2 years: 13%
  • Profits within more than 2 years: 3%
The median person took over 6 months of time to become profitable. My estimate, is around 9 months for the 50th percentile mark.

Disappointed?

Let me disappoint you further.

Here's the data set when looking solely at people that started selling in 2018 and 2019:
  • Profits within 3 months: 16%
  • Profits within 3-6 months: 23%
  • Profits within 6 months-1 year: 24%
For people that jumped in recently, the time to be profitable increased significantly. My estimate for the average: 10 months.

Oh, and to add even more salt: the data above doesn't include sample, research, or studying time, the entire wantrepreneur phase where you're taking courses and reading threads on the fastlane forum.

And note: "Time to be profitable" can otherwise be written as "Time to stop losing money". Because that's what it really is. It takes the average person ten months to stop losing money on top of whatever they spent on courses.

So how much money do people "invest" to get started on Amazon?

Here's how much JungleScout users spent:
  • Sellers spent less than $500: 17%
  • $500-1,000: 12%
  • $1,001-2,500: 13%
  • $2,501-5,000: 18%
  • $5,001-10,000: 21%
  • More than $10,000: 21%

The median person spent about $4,000 to get started selling on Amazon.

So all in all, using JungleScout's data...

The average seller spends $4,000 and 10+ months to get started on Amazon. Once they're up and running, they can expect to make $9,000 a year at $10 per hour. From that, they have to subtract out employee costs, and other expenses, likely netting them a lot less.

Oh ... and that's if you're successful. If you're in the 50%+ category of people that JungleScout deleted from its "data set", then just expect to lose money altogether.

Amazon still sound cool? @MJ DeMarco
Finally someone who gets it!

Excellent post backed up with clear evidence. Thank you.

Amazon-related biz has never been for me.
 
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AgainstAllOdds

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Let's continue with the JungleScout data set.

They asked sellers "Will selling on Amazon be profitable in 2020?"

And here's the response that they got ...

Nearly all sellers (92%) said they plan to continue selling on Amazon in 2020, and 72% are optimistic that selling on Amazon will be a viable way to make money online in the future.

These are sellers that have been on Amazon for over a year.

If you flip the question, then here's what it means:

28% of sellers that are currently successful on Amazon, don't think that there will be money to be made on Amazon in the future.

Imagine walking into 4 brick and mortar stores and asking people if there business would still be viable in three years. If you get over 5% of people saying no, then I'd be surprised.
 

Blackman

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I have never sold on Amazon, so I'm not really "qualified" to post anything to dispute your point, but one thing you'll find in business and generally in life, that by being "average" you'll always get shit results.

It's like if you take an "average" salary of a developed country and then start subtracting the living costs, then you wonder how do people survive?

I think no matter what business model you look at, taking average results as a metric to judge it, won't always show you the real picture. I'm sure those guys who do 6 figures monthly on Amazon wouldn't do it, if it wasn't worth it, right?

Just my 2 cents.
 

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The biggest problem with this thread: You're using Junglescout numbers. Junglescout is not Amazon. It doesn't matter how you look at the numbers, or how they're flawed. It's not Amazon data. So how can anyone say "Amazon sucks" when they don't really know what Amazon sellers are doing?

The biggest problem people have is they don't know how to utilize Amazon as a sales channel. The physical products business is just another business like home development is. You can't discredit an entire industry based off some numbers a SAAS platform posts about a certain sales channel. A lot of big brand names were started on Amazon. The reason they became big? They knew how to utilize Amazon as a sales channel.

No disrespect, but I think this thread is meaningless.
 
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Now onto theory...

Here's why I think "selling on Amazon" is one of the worst business models out there:
  • Everyone knows how much you sell
  • Everyone knows what you sell
  • Everyone knows what you sell it for
  • Everyone knows who you sell it to
  • With a little research they know what you buy it for
  • And with all that... they can compete with the few clicks of a button.
My theory:

Any product that has high margin will eventually be eroded on Amazon. By selling on Amazon, you're willfully providing data to your future competition. If your product is not protectable, then it shouldn't be on Amazon.

Who will end up competing against you is anyone for whom it's worth it to compete. This either means: someone that has the economies of scale to compete, or someone willing to work for a lot less.

The people working for a lot less are typically not even in the U.S.

If the average person is making $10 an hour on Amazon, then why do you think that is? It's either because most people don't make the calculation on how much money they actually make, or it's because people overseas are ecstatic to make $10 an hour living in China/India/etc.
 

MoneyDoc

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Now onto theory...

Here's why I think "selling on Amazon" is one of the worst business models out there:
  • Everyone knows how much you sell
  • Everyone knows what you sell
  • Everyone knows what you sell it for
  • Everyone knows who you sell it to
  • With a little research they know what you buy it for
  • And with all that... they can compete with the few clicks of a button.
My theory:

Any product that has high margin will eventually be eroded on Amazon. By selling on Amazon, you're willfully providing data to your future competition. If your product is not protectable, then it shouldn't be on Amazon.

Who will end up competing against you is anyone for whom it's worth it to compete. This either means: someone that has the economies of scale to compete, or someone willing to work for a lot less.

The people working for a lot less are typically not even in the U.S.

If the average person is making $10 an hour on Amazon, then why do you think that is? It's either because most people don't make the calculation on how much money they actually make, or it's because people overseas are ecstatic to make $10 an hour living in China/India/etc.
Right. If you sell another spatula. Those who make it don't sell another spatula.

Competing on cost has no return.
 
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The biggest problem with this thread: You're using Junglescout numbers. Junglescout is not Amazon. It doesn't matter how you look at the numbers, or how they're flawed. It's not Amazon data. So how can anyone say "Amazon sucks" when they don't really know what Amazon sellers are doing?

The biggest problem people have is they don't know how to utilize Amazon as a sales channel. The physical products business is just another business like home development is. You can't discredit an entire industry based off some numbers a SAAS platform posts about a certain sales channel. A lot of big brand names were started on Amazon. The reason they became big? They knew how to utilize Amazon as a sales channel.

No disrespect, but I think this thread is meaningless.
The data set it's based on was created in support of Amazon and why selling on Amazon is good.

When you dive into the numbers, they're far from that.

Your argument is "There's other numbers out there, and because of that, these numbers are bullshit, and this thread is worthless."

I'm sure you're making money, but you're in the top percentiles. Most people aren't.

My guess is that non-Jungle Scout data would be representative of this data or worse considering that the data was preselected for "successful sellers".
 

kelvinfernandezm

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The purpose of this thread is to present real, concrete facts and numbers on why starting a business on Amazon might be the absolute dumbest, lowest ROI thing you could do. It's not based on anecdotes. It's not based on hypotheticals. It's based around numbers published by one of the most pro-Amazon sites out there: JungleScout. However, instead of presenting it the way JungleScout wants to, I'll break down the numbers into what they really mean.

A quick summary: The average person fails at Amazon. Of those that succeed, the average person makes $9,000 a year at $10 per hour. To get there, they invest 10+ months of their time, and $4,000. Amazon has reached the point of "Uber" where it has misled people into believing that they're starting a real business that's generating real returns - when in reality the average seller is slaving away at $10 per hour.

In later posts, feel free to share theories and anecdotes. The Amazon-brainwashed crowd, feel free to post emotional responses and select anecdotes. In this post, I'll dive right into the numbers.

Before we begin, let me note the inspiration for this thread: @jpanarra's "New Sellers Earn Between $26,000 To $810,000 Per Year In Profit" - a thread based around data that was taken from the following primary source: How Much Money Do Amazon Sellers Make? | Jungle Scout. I was originally going to write a quick reply to his post, but as I started looking at the language and numbers, I started breaking them down and noticed exactly how bad they really were. That's how this thread was born. If the language is a little off, note that it was originally intended as a reply before the data became valuable enough to make its own thread.

So let's get to it.

First, let's start with the note that the data is published by JungleScout - whose primary incentive is to get more people selling on Amazon. Next, let's look at exactly who the data is based on:

"Between November 14 and December 10, 2019, Jungle Scout surveyed 2,063 Amazon sellers about their experiences. This article references responses from 1,046 experienced Amazon sellers who have more than a year of selling experience and at least one live product listing."

These guys literally surveyed 2,063 people. Decided that half of them suck and don't support their findings. Tossed them out, and kept only half the responses, 1,046 sellers that had attained "some" success.

Why?

Because the 1,017 others didn't fit their narrative and PR push.

If you look at what that actually means, it means that over 50% of preselected Amazon sellers (that were serious enough to have a JungleScout account), fared worse than the data that will be presented below. Add to that all the people without a js account, all the people that have already failed, or those that will fail, and you're left with a very high percentage of sellers that have been huge disappointments.

Of the 50% left, they further fudged the numbers using misleading statements and improper calculations. Let's start with an example of one of those statements:



This statement at face value looks impressive. Here's what it actually means:
  • 32.8% of sellers make between 0-10%
  • 31.2% of sellers make between 10-20%
  • 36% of sellers making profit margins above 20%
And here's what that means in terms of average person...

View attachment 29562

Using the chart above, it means that the median profit margin per Amazon seller is 15% (and note: I said MEDIAN, not "average" or some bullshit that Jungle Scout will use to change perception). That's from the product. Not net after including R&D, branding, EMPLOYEE costs, and all other costs. If you factor in those costs, then the true net margin will be a lot lower.

Is that still impressive? Could be. But is it as impressive as the statement that they built around the data? Definitely not.

Next, let's see how they present sales numbers:



Another quote that seems incredibly impressive. In reality, far from it.

That's what the article presents for sales numbers. Let's see what these numbers actually mean in terms of sales percentiles based on this statement:
  • 0 percentile: Lose money
  • 24th percentile: $1,000 in sales per month
  • 80th percentile: $25,000 in sales per month
  • 99.9th percentile: $250,000 in sales per month
From their statement, they made you think that 1 in 5 sellers do $250k+ in sales per month. However, one in five people don't do $250k in sales per month. One in a hundred does. The exception to the rule. The outlier.

To dive deeper, luckily for us, JungleScout was naive enough to publish their full data:

View attachment 29563

So using this info, we can continue and break down the data even more into what it actually means:

2% don't know their sales, so we'll just add them into the lower tier group (likely wantrepreneurs), making the rest of the percentiles as follows:
  • 0-17th percentile: Make under $500 in sales (aka - lose money)
  • 17-26th percentile: $500 to $1,000 in sales
  • 26-48th percentile: $1,000 to $5,000 in sales
  • 48-61st percentile: $5,000 to $10,000 in sales
  • 61-76th percentile: $10,000 to $25,000 in sales
  • 76-85th percentile: $25,000 to $50,000 in sales
  • 85-92nd percentile: $50,000 to $100,000 in sales
  • 92-97th percentile: $100,000 to $250,000 in sales
  • 97-99.9th percentile: $250,000+ in sales
The average person (50th percentile) makes $5,000 in sales per month. Think about that.

If you don't understand managerial or financial accounting, then you'll assume that the number is good. Afterall, the average person doesn't "make" $5,000 at their job every month. Amazon has to be the way. Or does it. We have to ask the next question...

So what's that mean in terms of profit per year? Not sales, but profit.

If we use JungleScout's bullshit metric, then that's a ton of money. If we use the median profit margin of 15% (which it is according to the chart above), then here's what that means:
  • 0-17th percentile: Lose money a year.
  • 17-26th percentile: $900 to $1,800 in GROSS profit per year
  • 26-48th percentile: $1,800 to $9,000 in GROSS profit per year
  • 48-61st percentile: $9,000 to $18,000 in GROSS profit per year
  • 61-76th percentile: $18,000 to $45,000 in GROSS profit per year
  • 76-85th percentile: $45,000 to $90,000 in GROSS profit per year
  • 85-92nd percentile: $90,000 to $180,000 in GROSS profit per year
  • 92-97th percentile: $180,000 to $450,000 in GROSS profit per year
  • 97-99.9th percentile: $450,000+ in GROSS profit per year
The average seller grosses $9,000 per year from their Amazon business.

And I know you wantrepreneurs will say "Yeah, but look at the top brackets, those guys are killing it". Yeah, they are, but how much are they spending on employees?

Those guys that are doing $450,000 gross per year? How many employees do you think they have? And how much money do you think they're actually putting into their pocket end of the year? I won't answer this question since there's too much variability, however I will give you concrete data for the next point.

"Ok, so $9,000 a year. That would help me a lot with my life. How much do I have to work in order to make that money?"

Here's the breakdown from Junglescout:
  • Fewer than 4 hours per week: 13%
  • 4-10 hours: 24%
  • 11-20 hours: 20%
  • 21-30 hours: 15%
  • 31-40 hours: 10%
  • 41-50 hours: 9%
  • 51-60 hours: 3%
  • More than 60 hours: 6%
What's that actually mean in terms of percentiles?
  • 0-13th percentile: 0-4 hours per week
  • 13-37th percentile: 4-10 hours per week
  • 37-57th percentile: 11-20 hours per week
  • 57-72nd percentile: 21-30 hours per week
  • 72-82nd percentile: 31 to 40 hours per week
  • 82-91st percentile: 41-50 hours per week
  • 91-94th percentile: 51-60 hours per week
  • 94-99.9th percentile: 60 hours + plus week
The average person works close to 20 hours per week. That's what the means. For argument's sake, let's estimate that down to 18 hours per week.

The average person works 18 hours per week on their Amazon "business" to make $9,000 a year. Still worth it?

Let's break that down per hour:

18 hours per week * 50 weeks [two vacation weeks] = 900 hours per year.

$9,000 / 900 hours = $10 per hour.

The average "successful" seller works at $10 per hour to make $9,000 per year.

But wait... that's not all folks. There's also a startup cost!

You have to research Amazon, learn the Amazon skill sets, learn how to import, pay for courses, samples, moulds, manufacturing costs for products that you'll mess up and have to throw out, etc.

That all takes money and time.

How much money and time? Here's the breakdown from JungleScout:

They asked their sellers "How long does it take to become profitable on Amazon?":
  • Profits within 3 months: 22%
  • Profits within 3-6 months: 22%
  • Profits within 6 months-1 year: 23%
  • Profits within 1-2 years: 13%
  • Profits within more than 2 years: 3%
The median person took over 6 months of time to become profitable. My estimate, is around 9 months for the 50th percentile mark.

Disappointed?

Let me disappoint you further.

Here's the data set when looking solely at people that started selling in 2018 and 2019:
  • Profits within 3 months: 16%
  • Profits within 3-6 months: 23%
  • Profits within 6 months-1 year: 24%
For people that jumped in recently, the time to be profitable increased significantly. My estimate for the average: 10 months.

Oh, and to add even more salt: the data above doesn't include sample, research, or studying time, the entire wantrepreneur phase where you're taking courses and reading threads on the fastlane forum.

And note: "Time to be profitable" can otherwise be written as "Time to stop losing money". Because that's what it really is. It takes the average person ten months to stop losing money on top of whatever they spent on courses.

So how much money do people "invest" to get started on Amazon?

Here's how much JungleScout users spent:
  • Sellers spent less than $500: 17%
  • $500-1,000: 12%
  • $1,001-2,500: 13%
  • $2,501-5,000: 18%
  • $5,001-10,000: 21%
  • More than $10,000: 21%

The median person spent about $4,000 to get started selling on Amazon.

So all in all, using JungleScout's data...

The average seller spends $4,000 and 10+ months to get started on Amazon. Once they're up and running, they can expect to make $9,000 a year at $10 per hour. From that, they have to subtract out employee costs, and other expenses, likely netting them a lot less.

Oh ... and that's if you're successful. If you're in the 50%+ category of people that JungleScout deleted from its "data set", then just expect to lose money altogether.

Amazon still sound cool? @MJ DeMarco
Thank you for breaking this down you're doing a great service. This is why I hate surveys so much. The data can be skewed in whatever way you want. Surveyors are the worst liars. And people trust them because they show you numbers and you know "numbers don't lie." What they won't tell you is that they threw away the other half of the people surveyed and only chose the top sellers to be published.
 

MoneyDoc

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The data set it's based on was created in support of Amazon and why selling on Amazon is good.

When you dive into the numbers, they're far from that.

Your argument is "There's other numbers out there, and because of that, these numbers are bullshit, and this thread is worthless."

I'm sure you're making money, but you're in the top percentiles. Most people aren't.

My guess is that non-Jungle Scout data would be representative of this data or worse considering that the data was preselected for "successful sellers".
But which business is this not true? Every industry has the winners and losers, don't they? But again... Amazon is not an industry. It's a sales channel. And if you tell a brand owner NOT to use Amazon because they won't make any money, that's absurd.
 

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MoreValue

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Yup...blown away how people don’t realize this yet. Not just Amazon, but literally all selling platforms, you can’t build a real business or have high margins at all. Completely unsustainable.

I saw maybe a couple months ago that Nike is pulling all products off Amazon? Whenever I see brands whose value is primarily branding, on Amazon I cringe. Finally someone woke up at Nike. Or maybe it was the counterfeit issue.

3rd party sales platforms are akin to retail distributor relationship. There is a reason you never see Gucci in Walmart or Amazon. The brand does not align. Saks Fifth Avenue, brand alignment works.

These products on Amazon have one value skew, function-based 99% of the time. Function based value especially in e-commerce is too easy to duplicate. Just pay for tooling, boom I just destroyed your business.

Real businesses have avalue skew of both function, brand, and quality. None of these are cheap if done 100% correctly.

Everytime I hear someone starting an Ecom business for like $3k or something and not planning to invest beyond that. I know it is gonna be garbage.
Edit: These are the type of people to be like I got $500,000 sales. Profit is like $30,000
 

ProblemOd

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Yup...blown away how people don’t realize this yet. Not just Amazon, but literally all selling platforms, you can’t build a real business or have high margins at all. Completely unsustainable.

I saw maybe a couple months ago that Nike is pulling all products off Amazon? Whenever I see brands whose value is primarily branding, on Amazon I cringe. Finally someone woke up at Nike. Or maybe it was the counterfeit issue.

3rd party sales platforms are akin to retail distributor relationship. There is a reason you never see Gucci in Walmart or Amazon. The brand does not align. Saks Fifth Avenue, brand alignment works.

These products on Amazon have one value skew, function-based 99% of the time. Function based value especially in e-commerce is too easy to duplicate. Just pay for tooling, boom I just destroyed your business.

Real businesses have avalue skew of both function, brand, and quality. None of these are cheap if done 100% correctly.

Everytime I hear someone starting an Ecom business for like $3k or something and not planning to invest beyond that. I know it is gonna be garbage.
This guy again.

How much sales have you done?
 

EVMaso

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Now onto theory...

Here's why I think "selling on Amazon" is one of the worst business models out there:
  • Everyone knows how much you sell
  • Everyone knows what you sell
  • Everyone knows what you sell it for
  • Everyone knows who you sell it to
  • With a little research they know what you buy it for
  • And with all that... they can compete with the few clicks of a button.
My theory:

Any product that has high margin will eventually be eroded on Amazon. By selling on Amazon, you're willfully providing data to your future competition. If your product is not protectable, then it shouldn't be on Amazon.

Who will end up competing against you is anyone for whom it's worth it to compete. This either means: someone that has the economies of scale to compete, or someone willing to work for a lot less.
There's been a big push the past year for either branding your own goods (so they can't be directly copied) or coming up with your own unique products to sell through Amazon. Trying to simply "outmarket" the competition is such an uphill climb when some of these people already have systems and contacts in place as well as experience from 1+ years of a headstart.

For me if you want to get your feet wet in e-commerce and have some "learning moneys" to spare, you can dive in and learn the process by trying to start up a store, but I would just put that money towards a course (tons of them out there, some have quite good reviews) and futz around on ads with your own money and learn that way, then follow some internet marketing blogs/forums/podcasts to keep up with the latest trends.

The Amazon waters are red, try and see where all the older ships are pointing, they're probably going to some crystal blue oceans.
 
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AgainstAllOdds

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By the way, I'm not saying there's no money on Amazon. But for the average person there is not. The average person that starts an Amazon business today will fail and will waste their time.

Very few people hit those top percentiles where they're making anything significant.

To get there, you need to think different and act different.

@biophase and the guys from his program are making money. Doing things that other people aren't has proven to create success.

If you're deadset on Amazon, follow what they're preaching.

If you're not yet on Amazon, and thinking about it, then my suggestion is to not even start. There's a lot easier ways to make money. The odds are stacked against you and consistently getting worse.
 

Vadim26

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If someone's whole strategy is purely based on what channel they are going to sell - they are indeed doomed to fail.

Starting from the most important:

1) Product;
2) Audience;
3) Creative;
4) Copy;
5) Sales channel.

Notice where the sales channel is.
The right product marketed to the right audience will always be needed.

DO start on amazon if you have a great product solving a problem (not spatula etc) just based on the sheer sales volume of this channel.

The thread is geared towards a simple person just starting out, who isn't as business-savvy and looking to dropship someone's product (ie not looking to put effort, and wants to get easy money).

Then yes, stay the hell off Amazon and sell facial steamers on shopify. Much easier.

To add: considering the size of amazon bandwagon out there with all the people taking courses on how to "game" a system and improve someone's product, the data doesn't discourage me at all. Quite the opposite, actually.


@biophase and the guys from his program are making money. Doing things that other people aren't has proven to create success.
Do You Want To Do It The EASY Way, Or The HARD Way?
 
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jpanarra

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This is the reason why I brought this article to the forum. I knew there were more experienced people that could see through the smoke and mirrors.

It seemed a bit toooo optimistic for me and I had doubts due to the article coming from jungle scout. I guess i was a bit hopeful and wanted to share.

@AgainstAllOdds thanks for taking your time and breaking this illusion down for us.
 

Primeperiwinkle

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Well.. damn. My naive happy lil bubble has burst. Better now than later though.

Thank you for the time and energy spent on this. Much appreciated.
 

Xeon

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The one pro-Amazon argument I always hear about selling on Amazon, is that it has ready traffic. Your product, once uploaded, gets a shit ton of views. Whereas on your own website, you've to pay for FB ads to drive all the traffic yourself. Plus, on Amazon, the people go there already with the buying mindset.

Of course, I don't sell on AMZ so I don't know how true or powerful the "gigantic stream of traffic" argument is. Would that factor be enough to override the cons?
 

biophase

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The one pro-Amazon argument I always hear about selling on Amazon, is that it has ready traffic. Your product, once uploaded, gets a shit ton of views. Whereas on your own website, you've to pay for FB ads to drive all the traffic yourself. Plus, on Amazon, the people go there already with the buying mindset.

Of course, I don't sell on AMZ so I don't know how true or powerful the "gigantic stream of traffic" argument is. Would that factor be enough to override the cons?
I launched a new company the week before last black friday, so it's basically been selling for 5 weeks. So far, the company was sold about $21,000 in sales and spent about $700 in Amazon PPC. I doubt I could have done this on my own website and spent only $700.

I want to add that Amazon takes 15% commission, so you could argue that I've spent an additional $3,150 on traffic ($21k X .15% = $3,150).

So total spent would be $3,850. I wonder if I could get $21k sales on $3,850 FB or Google PPC spend.

Hmmm. I'm actually not sure. Just throwing out some numbers. Let's say I'm paying $2/click and have 5% conversion rate on my website.

1900 clicks = 95 sales @ 5% conversion rate (which is really high)

On Amazon I had 400 sales.

I think Amazon wins here.
 

MoreValue

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I launched a new company the week before last black friday, so it's basically been selling for 5 weeks. So far, the company was sold about $21,000 in sales and spent about $700 in Amazon PPC. I doubt I could have done this on my own website and spent only $700.

I want to add that Amazon takes 15% commission, so you could argue that I've spent an additional $3,150 on traffic ($21k X .15% = $3,150).

So total spent would be $3,850. I wonder if I could get $21k sales on $3,850 FB or Google PPC spend.

Hmmm. I'm actually not sure. Just throwing out some numbers. Let's say I'm paying $2/click and have 5% conversion rate on my website.

1900 clicks = 95 sales @ 5% conversion rate (which is really high)

On Amazon I had 400 sales.

I think Amazon wins here.
What about the long term value of having your own website. You actually own your customers. So you email market to them for a cost of next to nothing in the future. I believe Amazon restricts direct marketing to customers. Correct me if I’m wrong.

Why pay traffic when you can get it organically and reoccurring ? Forums, SEO, blog posts, etc.
 

sparechange

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What about the long term value of having your own website. You actually own your customers. So you email market to them for a cost of next to nothing in the future. I believe Amazon restricts direct marketing to customers. Correct me if I’m wrong.

Why pay traffic when you can get it organically and reoccurring ? Forums, SEO, blog posts, etc.
Little life hack for ya, inside your package you can leave a note to your customer, IG link FB etc
 

Roli

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The purpose of this thread is to present real, concrete facts and numbers on why starting a business on Amazon might be the absolute dumbest, lowest ROI thing you could do. It's not based on anecdotes. It's not based on hypotheticals. It's based around numbers published by one of the most pro-Amazon sites out there: JungleScout. However, instead of presenting it the way JungleScout wants to, I'll break down the numbers into what they really mean.

A quick summary: The average person fails at Amazon. Of those that succeed, the average person makes $9,000 a year at $10 per hour. To get there, they invest 10+ months of their time, and $4,000. Amazon has reached the point of "Uber" where it has misled people into believing that they're starting a real business that's generating real returns - when in reality the average seller is slaving away at $10 per hour.

In later posts, feel free to share theories and anecdotes. The Amazon-brainwashed crowd, feel free to post emotional responses and select anecdotes. In this post, I'll dive right into the numbers.

Before we begin, let me note the inspiration for this thread: @jpanarra's "New Sellers Earn Between $26,000 To $810,000 Per Year In Profit" - a thread based around data that was taken from the following primary source: How Much Money Do Amazon Sellers Make? | Jungle Scout. I was originally going to write a quick reply to his post, but as I started looking at the language and numbers, I started breaking them down and noticed exactly how bad they really were. That's how this thread was born. If the language is a little off, note that it was originally intended as a reply before the data became valuable enough to make its own thread.

So let's get to it.

First, let's start with the note that the data is published by JungleScout - whose primary incentive is to get more people selling on Amazon. Next, let's look at exactly who the data is based on:

"Between November 14 and December 10, 2019, Jungle Scout surveyed 2,063 Amazon sellers about their experiences. This article references responses from 1,046 experienced Amazon sellers who have more than a year of selling experience and at least one live product listing."

These guys literally surveyed 2,063 people. Decided that half of them suck and don't support their findings. Tossed them out, and kept only half the responses, 1,046 sellers that had attained "some" success.

Why?

Because the 1,017 others didn't fit their narrative and PR push.

If you look at what that actually means, it means that over 50% of preselected Amazon sellers (that were serious enough to have a JungleScout account), fared worse than the data that will be presented below. Add to that all the people without a js account, all the people that have already failed, or those that will fail, and you're left with a very high percentage of sellers that have been huge disappointments.

Of the 50% left, they further fudged the numbers using misleading statements and improper calculations. Let's start with an example of one of those statements:



This statement at face value looks impressive. Here's what it actually means:
  • 32.8% of sellers make between 0-10%
  • 31.2% of sellers make between 10-20%
  • 36% of sellers making profit margins above 20%
And here's what that means in terms of average person...

View attachment 29562

Using the chart above, it means that the median profit margin per Amazon seller is 15% (and note: I said MEDIAN, not "average" or some bullshit that Jungle Scout will use to change perception). That's from the product. Not net after including R&D, branding, EMPLOYEE costs, and all other costs. If you factor in those costs, then the true net margin will be a lot lower.

Is that still impressive? Could be. But is it as impressive as the statement that they built around the data? Definitely not.

Next, let's see how they present sales numbers:



Another quote that seems incredibly impressive. In reality, far from it.

That's what the article presents for sales numbers. Let's see what these numbers actually mean in terms of sales percentiles based on this statement:
  • 0 percentile: Lose money
  • 24th percentile: $1,000 in sales per month
  • 80th percentile: $25,000 in sales per month
  • 99.9th percentile: $250,000 in sales per month
From their statement, they made you think that 1 in 5 sellers do $250k+ in sales per month. However, one in five people don't do $250k in sales per month. One in a hundred does. The exception to the rule. The outlier.

To dive deeper, luckily for us, JungleScout was naive enough to publish their full data:

View attachment 29563

So using this info, we can continue and break down the data even more into what it actually means:

2% don't know their sales, so we'll just add them into the lower tier group (likely wantrepreneurs), making the rest of the percentiles as follows:
  • 0-17th percentile: Make under $500 in sales (aka - lose money)
  • 17-26th percentile: $500 to $1,000 in sales
  • 26-48th percentile: $1,000 to $5,000 in sales
  • 48-61st percentile: $5,000 to $10,000 in sales
  • 61-76th percentile: $10,000 to $25,000 in sales
  • 76-85th percentile: $25,000 to $50,000 in sales
  • 85-92nd percentile: $50,000 to $100,000 in sales
  • 92-97th percentile: $100,000 to $250,000 in sales
  • 97-99.9th percentile: $250,000+ in sales
The average person (50th percentile) makes $5,000 in sales per month. Think about that.

If you don't understand managerial or financial accounting, then you'll assume that the number is good. Afterall, the average person doesn't "make" $5,000 at their job every month. Amazon has to be the way. Or does it. We have to ask the next question...

So what's that mean in terms of profit per year? Not sales, but profit.

If we use JungleScout's bullshit metric, then that's a ton of money. If we use the median profit margin of 15% (which it is according to the chart above), then here's what that means:
  • 0-17th percentile: Lose money a year.
  • 17-26th percentile: $900 to $1,800 in GROSS profit per year
  • 26-48th percentile: $1,800 to $9,000 in GROSS profit per year
  • 48-61st percentile: $9,000 to $18,000 in GROSS profit per year
  • 61-76th percentile: $18,000 to $45,000 in GROSS profit per year
  • 76-85th percentile: $45,000 to $90,000 in GROSS profit per year
  • 85-92nd percentile: $90,000 to $180,000 in GROSS profit per year
  • 92-97th percentile: $180,000 to $450,000 in GROSS profit per year
  • 97-99.9th percentile: $450,000+ in GROSS profit per year
The average seller grosses $9,000 per year from their Amazon business.

And I know you wantrepreneurs will say "Yeah, but look at the top brackets, those guys are killing it". Yeah, they are, but how much are they spending on employees?

Those guys that are doing $450,000 gross per year? How many employees do you think they have? And how much money do you think they're actually putting into their pocket end of the year? I won't answer this question since there's too much variability, however I will give you concrete data for the next point.

"Ok, so $9,000 a year. That would help me a lot with my life. How much do I have to work in order to make that money?"

Here's the breakdown from Junglescout:
  • Fewer than 4 hours per week: 13%
  • 4-10 hours: 24%
  • 11-20 hours: 20%
  • 21-30 hours: 15%
  • 31-40 hours: 10%
  • 41-50 hours: 9%
  • 51-60 hours: 3%
  • More than 60 hours: 6%
What's that actually mean in terms of percentiles?
  • 0-13th percentile: 0-4 hours per week
  • 13-37th percentile: 4-10 hours per week
  • 37-57th percentile: 11-20 hours per week
  • 57-72nd percentile: 21-30 hours per week
  • 72-82nd percentile: 31 to 40 hours per week
  • 82-91st percentile: 41-50 hours per week
  • 91-94th percentile: 51-60 hours per week
  • 94-99.9th percentile: 60 hours + plus week
The average person works close to 20 hours per week. That's what the means. For argument's sake, let's estimate that down to 18 hours per week.

The average person works 18 hours per week on their Amazon "business" to make $9,000 a year. Still worth it?

Let's break that down per hour:

18 hours per week * 50 weeks [two vacation weeks] = 900 hours per year.

$9,000 / 900 hours = $10 per hour.

The average "successful" seller works at $10 per hour to make $9,000 per year.

But wait... that's not all folks. There's also a startup cost!

You have to research Amazon, learn the Amazon skill sets, learn how to import, pay for courses, samples, moulds, manufacturing costs for products that you'll mess up and have to throw out, etc.

That all takes money and time.

How much money and time? Here's the breakdown from JungleScout:

They asked their sellers "How long does it take to become profitable on Amazon?":
  • Profits within 3 months: 22%
  • Profits within 3-6 months: 22%
  • Profits within 6 months-1 year: 23%
  • Profits within 1-2 years: 13%
  • Profits within more than 2 years: 3%
The median person took over 6 months of time to become profitable. My estimate, is around 9 months for the 50th percentile mark.

Disappointed?

Let me disappoint you further.

Here's the data set when looking solely at people that started selling in 2018 and 2019:
  • Profits within 3 months: 16%
  • Profits within 3-6 months: 23%
  • Profits within 6 months-1 year: 24%
For people that jumped in recently, the time to be profitable increased significantly. My estimate for the average: 10 months.

Oh, and to add even more salt: the data above doesn't include sample, research, or studying time, the entire wantrepreneur phase where you're taking courses and reading threads on the fastlane forum.

And note: "Time to be profitable" can otherwise be written as "Time to stop losing money". Because that's what it really is. It takes the average person ten months to stop losing money on top of whatever they spent on courses.

So how much money do people "invest" to get started on Amazon?

Here's how much JungleScout users spent:
  • Sellers spent less than $500: 17%
  • $500-1,000: 12%
  • $1,001-2,500: 13%
  • $2,501-5,000: 18%
  • $5,001-10,000: 21%
  • More than $10,000: 21%

The median person spent about $4,000 to get started selling on Amazon.

So all in all, using JungleScout's data...

The average seller spends $4,000 and 10+ months to get started on Amazon. Once they're up and running, they can expect to make $9,000 a year at $10 per hour. From that, they have to subtract out employee costs, and other expenses, likely netting them a lot less.

Oh ... and that's if you're successful. If you're in the 50%+ category of people that JungleScout deleted from its "data set", then just expect to lose money altogether.

Amazon still sound cool? @MJ DeMarco
Okay, so you've just proved the 80/20 rule works with Amazon.

20% of sellers make 80% of the profits, this is true of anywhere, doesn't mean a new seller shouldn't at least try Amazon out.
 

Roli

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Of course, I don't sell on AMZ so I don't know how true or powerful the "gigantic stream of traffic" argument is. Would that factor be enough to override the cons?
Short answer, yes. Look at @biophase's response to this thread. He got $21k sales in 5 weeks, which he himself (a very experienced seller) would not have got on his own website.

The long answer is, it depends on your product, margins, search volumes, and how much you pay Amazon to promote your product.

To be honest, I don't get the point of this thread, it seems like the OP has had a bad experience with Amazon and now wants to prove they're no good.

The fact is there are many people who make a good living on Amazon, the ones who also make sure that they're selling elsewhere will do the best, however even sellers who exclusively sell on there can do very well.

At the end of the day the 80/20 rule comes into play, 20% of the sellers will be responsible for around 80% of profits, that doesn't mean you shouldn't give it a go if you have a viable product.
 

Xeon

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What about the fact that there's a whole ton of competitors and potential future competitors researching and copying your products on AMZ? Hasn't that worry those of you AMZ sellers here? I mean, you can build a brand etc., but those tens of thousands of hungry copycat wolves scouting AMZ to sell a me-too version of your product will do the exact same.
 

Ing

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Only my thoughts:

In my hometown there are trends: 3 years ago lots of people (20-40yrs) were buying a motocross/enduro bike, last year bikes were sold and the began fishing.
Now the trend is e- mountainbiking.

I m riding motocross for about 40 years now.
Why should be some newcommer perform much better than me? They didnt though Im a bit old in that sport.

I m fishing since about 30 years.

And I have 6 years empirical knowledge in e mountainbiking.

When I translate this into AMA:
Why should more than the 20% super talented newcomers perform better than average?
 

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