Is Amazon FBA worth it in 2021
The is a question that is being asked by many entrepreneurs, is Amazon FBA worth it in 2021? The short answer is yes, it is worth it. Amazon sales volumes are booming and the market is still profitable for new sellers. However, you will need to find competitive products to sell and invest in marketing tools before starting your business.
E-commerce trend in the United States
E-Commerce and Amazon
A study is ongoing which is trying to find out how eCommerce is being used in 2021. The trend is towards a more digital marketplace, with less brick and mortar. This is a mix of not only online and mobile commerce but also social media, big data, personalisation and transparency. Amazon is the clear market leader in this rapidly changing world. Sales volumes are booming, they have an upward trend. This is a great time to get started with an Amazon FBA store.
The beauty of starting an online E-commerce business is that most of the time it costs a fraction of a similar brick and mortar business. Quite often you can run a successful e-commerce business from the comfort of your own home. You don’t need as much staff and can avoid expensive commercial rental costs. Apart from rental expenses you can save on warehouse, decoration and product exposition costs, as well as maintenance and utilities.
Usually when there is an upward trend there is money to made.
However it is not as easy to start an Amazon FBA store now than in the past. You might need to look for more competitive products and put effort into marketing your brand. There are plenty of options still open, but probably less so then a few years ago. You will also need tools like product research software, sourcing software, FBA software and tools for marketing your products.
The best all in one tool to get started with Amazon FBA is Jungle Scout. It is very user friendly and has all the tools you need to start a successful Amazon FBA business. This tool is not only rated so highly by us. It has excellent user reviews and a 4.6 star rating on trust-pilot.
Jungle Scout key features:
- Product research – the best way to find what items will sell
- Product sales forecast
- Keyword research – Find the best keywords, giving you a better chance at ranking higher and promoting your product.
- Alerts – customize them and so you can take action fast
- Automate review requests
- Plan and manage your inventory
- Monitor your sales, product performance, profits and costs
The biggest advantage of an Amazon FBA business is that it can be a side hustle without quitting your normal job. The initial investment to get started is also not that high.
This is definitely not a get rich quick scheme but it is possible to make a nice side income, or if you commit to it full time, a very nice living.
Benefits of running an Amazon FBA business
- Amazon FBA is the worlds largest marketplace.
- You can start without a lot of upfront investment.
- It is not necessary to quit your day job, it is possible to make this into an income generating side hustle.
- There is quite some potential left in the market, the sooner you start the better chance of success you have.
- You can also use Amazon FBA to sell your products overseas, especially in countries where you might not have a lot of competition.
- It is possible with an Amazon FBA store to build yourself up into something bigger if that is what you are looking for.
- Profits from sales on Amazon FBA are generally higher than brick and mortar sales due to lower overhead costs.
- You don’t need a warehouse – Amazon stores and ships the products you sell
- You don’t need a lot of employees to handle this type of business
- You can outsource some of the work
- Once setup it doesn’t require that much work to maintain it
- You do not need an office to run this business, everything can be done from home
There are many benefits of running an Amazon FBA. You might want to try starting out as side hustle first before quitting your day job. This is because there is also a lot of competition out there, and the market is not as easy to enter as it was before. Luckily Amazon continues to grow year on year with more products being added every day.
Drawbacks of running an Amazon FBA business
- You will need a lot of work to get started and it is possible that you won’t make money from day one, or at least until you have built up some momentum.
- You are at the mercy of Amazon and if they change their policies or close your listings for some reason you might be out of business
- There is a lot of competition out there, it is not as easy as it used to be to get started
- It is not a get rich quick scheme, it is possible to make money but you need to work hard at it
There are horror stories about Amazon FBA stores being closed down for one or another reason. Amazon is a digital marketplace and it can change their policies for no apparent reason. Amazon is a retail behemoth which means that they have the power to control their marketplace.
It is always good not to keep all your eggs in one basket. Diversify if you can, and don’t only count on FBA for your income. There plenty of other marketplaces (for example: Etsy or Ebay) where customers come looking for niche products like yours. You can also always start a Shopify or ebay dropshipping store to supplement you Amazon FBA business.
How much do Amazon Sellers make
On average almost half of Amazon sellers make at least $1,000 per month in sales and $25000 lifetime profits. 6% of sellers became millionaires thanks to the Amazon marketplace. There is no guarantee that you will be one of those 6% winners, but if you put some effort there is a very big chance you will be making some profits in the first 3 months.
How much does it cost to get started with Amazon FBA
It is not that expensive to get started with an amazon fba store. If you are looking for a side hustle then it is possible that the initial investment is around $500-$1000.
How much work does it requires to run an Amazon FBA store
It is not that much work to maintain your amazon fba business once it is set up. More than half of sellers spend less than 20 hours a week on their business.
It is possible to outsource a lot of the tasks like product research, listing, customer service, social media management, advertising or logistics. Using specialized software tools saves a lot of time as well.
Once setup and running correctly with all the right products for sale it is possible that you will only need to spend a few hours each week on your Amazon FBA business.
Is Amazon FBA worth it – Final Thoughts
What Amazon sellers say:
Just jump in now. Perfection is the enemy of profit.” “I wish I knew how important it was to start sooner. The barrier to quick trajectory seems to be higher over time.” “I wish I had known where to start and where to get good information.”
Is Amazon FBA worth it in 2021? In our opinion this is a good time to get started with an Amazon FBA business. Amazon is the biggest marketplace in the world and it is still growing with more products being added every day. You might need to do some work, but with the right tools it is possible that you will make your first sales and profits within weeks.
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