One question I am consistently asked since launching fulltimefba.com back in 2013 is this… “Is there still room for new Amazon FBA sellers?“
Most people ask this question out of two fears they are experiencing:
- The fear of not finding enough profitable inventory to sell on Amazon.
- The fear of too many competitors who will tank prices so I’m never able to get a sale.
I totally get it. When you’re new at selling on Amazon (or even still in your first year), you experience the pains of being a newbie.
You might laugh at me, but I thought some similar thoughts back in 2011 when I first started selling on Amazon. I thought, “Will I be able to find enough inventory to sell, or will I waste my time sourcing for inventory that just isn’t there anymore? Will I actually be able to sell the inventory I buy, or will my competitors tank the price and steal my sales?”
And that was back in 2011…
If you think you’re too late for the Amazon FBA Profit Party, then I’ve got some great news for you:
I totally believe that the profit potential of Amazon FBA is still in its infancy. That’s right… still at the beginning. If you get started now, then you’re still joining in on the ground floor of what’s possible with Amazon and FBA.
You might be wondering how I’m thinking this when the Amazon FBA program started over 11 years ago. That’s like ancient, right? Well, to help you see things in the right light, you need to have the correct perspective. In the rest of this blog post I’ll share with you the reasons I think there is plenty of room for new Amazon FBA sellers:
1. Amazon is taking over the world – and needs your help!
Over and over again, it seems as if Amazon consistently does something that changes everything. From launching an online bookstore in 1994, to moving beyond books in 1998, to making free 2-day delivery everyone’s expectation starting in 2005, to opening FBA warehouses to 3rd party sellers in 2006, and so much more (CreateSpace on-demand book printing, Kindle tablets and ebooks, Amazon Fresh, Amazon Echo, Merch on-demand T-shirt printing, and so much more.).
Over and over again, Amazon continues to revolutionize online shopping and the expectations we have a shoppers. The more Amazon expands, the more Amazon will need you and I to sell on the Amazon platform.
2. Buyers are only just now starting to buy more items online.
You might buy many items on Amazon throughout the year, but you’re not the average person. It would shock you how many people in the US still think that Amazon.com is just an online bookstore. I still come across many people who have no idea that Amazon sells clothes, shoes, or groceries. Here are some eye-opening stats for you:
Right now, 62% of Americans buy on Amazon at least once a month, with the amount of time between purchases decreasing every day. As we look toward the future, 67% of Millennials and 56% of Gen Xers prefer online shopping over in-store shopping; this leaves so much room for growth as more people start to buy on Amazon more often. Overall, Americans only spend about 36% of their monthly shopping budget online, and every year that number keeps getting bigger and bigger. Because more and more people are shopping online every day, Amazon is depending on 3rd party sellers (that’s you and me) to find the inventory to stock the FBA warehouses.
3. Without 3rd party sellers, Amazon would lose over 50% of their sales.
A huge benefit that only 3rd party sellers can bring to Amazon is the incredible amount of product selection and increase in customer choice. Third party sellers can find inventory to sell that Amazon can’t. This, combined with the fact that only 16% of manufacturers in the world sell their items directly on Amazon, means that 84% of manufacturers still don’t sell on Amazon – leaving a huge hole on Amazon that you and I can fill with inventory. In other words, our inventory sourcing efforts are vital to the continuation of Amazon’s success. In fact, if Amazon stopped 3rd party sellers from selling on Amazon, they would lose over half of their annual sales (which would equate to billions of dollars lost for Amazon).
4. Only recently did Amazon finally surpass Google as the starting point for online shoppers.
Before 2017, online shoppers would start on Google (or other search engines) in order to search for the items they wanted to buy online. Google could send these online shoppers almost anywhere… to Amazon, a specific brand’s website, eBay, a specific retail store, or to an unlimited number of possible store websites. Only just recently, starting in 2017, do a majority of online shoppers (over 50%) now start their online shopping experience on Amazon. This is huge for the future of Amazon and how much Amazon needs new sellers to find inventory to sell on Amazon.
5. Many Amazon sellers have no idea what they are doing, which can be to your benefit!
I can’t tell you how many times I see a listing on Amazon where there are 100 sellers, but only a few are actually competing for the sale. These other sellers are throwing their money away on storage fees for inventory they are not selling. If you take the right steps in your Amazon business, then you can set yourself up for long-term success. For info about how to start a successful Amazon FBA business from the beginning, then check out JumpStart Amazon.
6. Mobile sales are only now starting to generate momentum.
It’s amazing to see the growth of sales that are generating directly from their smartphones. The term showrooming (see image caption) wasn’t even a thing a few years ago, and now it’s a normal occurrence. In fact, over 50% of online shoppers use their smartphone to buy online… and over 60% use their tablets. These numbers are only going to increase the more people start to learn about shopping online via their smartphone and tablets.
7. Amazon keeps attracting more and more customers every day.
Here are just a few things Amazon does that almost every savvy online shopper has now come to expect: Amazon Prime free 2-day shipping, easy reordering, easy returns, and easy refunds. Why does Amazon do this? So that more and more people will come to Amazon to shop… and it’s working! I know my online shopping expectations have been influenced by Amazon. It’s annoying to me when I order something online elsewhere and it doesn’t arrive in 2 days. And that consistency by Amazon keeps me (and millions of others) coming back for more.
I’m not exaggerating when I say millions, because Amazon has over 300 million accounts. Back in 2015, 50 million people had a Prime account. In 2017, that number has grown to almost 70 million Prime members. Again, these numbers are growing every year. With more buyers, Amazon needs more sellers to stock the Amazon shelves with inventory.
Seriously, I could go on forever with even more reasons (see the source links at the end of this post for even more stats), but I hope by now you get my point. The growth of Amazon and their need for you to fill up their FBA warehouses with inventory is still at the very early stages.
If you start your Amazon FBA business now, I guarantee that in a few years, you’ll be so glad you started “way back in 2019.” There will seriously never be a better time to start.
If you’re ready to start your Amazon FBA business with a plan that will lead you toward long-term success, then I invite you to check out the JumpStart Amazon course.
In JumpStart Amazon, you will know exactly, step-by-step, how to build up a successful Amazon FBA business from scratch. From setting up your seller account to finding profitable inventory to knowing how to best use your profits, I’ll show you the proven strategies for how to start your Amazon FBA business off on the right foot.
After you experience JumpStart Amazon, you’ll be able to:
- Understand multiple proven strategies to find profitable inventory that sells quickly on Amazon
- Know the right steps that will help make your first Amazon paycheck a big one
- Easily decipher the most misunderstood aspect of selling on Amazon
- Recognize the right inventory items to sell and which ones you should avoid
- Handle brand and category restrictions with ease so that you can sell even more products
- Know the biggest problem with sourcing inventory (and how to overcome it)
- Know the strategies to have your products sell more often than your competition.
- and so much more!
So, now I’d love to hear from you. Are you excited about the huge growth potential of selling on Amazon? What fears do you still have about selling on Amazon? How have you tried to overcome these fears? What excites you most about selling on Amazon? Answer below in the comments.
Source Links: Invespcro, Bigcommerce, SellerLabs, BusinessInsider, SeekingAlpha.
I totally agree that there is room for new online sellers, however, Amazon are making it harder and harder for new sellers to get a foothold. The other factor that is putting people off is the sheer power that Amazon wield. They can destroy a business overnight.
All it takes is a couple of customers to spuriously complain that a seller is selling fake products and bang you’re gone. No concept of innocent until proven guilty, or investigating the matter properly, they literally take the customers word for it and then it’s up to you to prove that you have sourced your products legitimately. God help you if you’ve had that stock in for some time. Your supporting invoices have to be less than 180 days old. That is exactly what has happened to a friend of mine here in the UK who was selling through FBA. Then there’s A-Z claims. Negative feedback and all the other seller metrics (Amazon hoops) that you have to jump through. Now if you’ve been trading sometime as I have, one neg isn’t going to make a difference but for a new seller one neg can decimate your account health. Amazon offer zero protection from buyers with malice in mind (and they do exist). I recently had a customer request a return for an item she had received her products damaged when they were still sat in my porch awaiting collection by the postman as she had only ordered them that same day. This was the second claim she had made against me in as many weeks. The first time was for non-receipt and then she subsequently admitted she had received it but that it was rusty (the item was made of glass). Both times Amazon upheld the claim although they funded it. It did not however stop my account being restricted so Amazon held my funds to ransom for 30 days owing to 2 spurious claims made against me by the same customer. A month later I got a third order from that same customer. I cancelled it. I would sooner risk the pre-delivery cancellation against my account health than the inevitable claim she would have made for some other bogus reason. The point is that as a long-time trader (5 years) on Amazon I can withstand that kind of penalty. A new trader would quite possibly be crushed by it. So trading on Amazon is not for the faint hearted.
Hi Louise, I’m really sorry you’ve had these problems with your seller account. It sounds pretty frustrating. I do want to point out for anyone reading these comments that the problems with A-Z claims only relate to merchant fulfilled orders, not FBA orders. This is a big reason why I am a proponent of the FBA program. Yes, there are occasionally bad customers who place orders through both FBA and MF and make false claims, but FBA claims/customer service is much easier to deal with than MF — and most importantly, the number of orders with these claims truly is rare compared to the number of orders without them. Think of it like air travel: everyone gets upset hearing about a plane crash, but the number of flights that make it safe and sound to their destination far outweighs the occasional crash, and overall air travel is extremely safe. The same is true with selling on Amazon.
I do want to point back to the original purpose of this blog post — is there room for new FBA sellers? The answer is a resounding yes! The business opportunities with FBA are huge and will only grow from here. There are definitely anecdotal stories out there (yours included, and again, I’m sorry you’ve had this experience) of times things go wrong for sellers, but overall the FBA program is a great opportunity and the data show that there is huge profit potential even for new FBA sellers.
As long as Amazon is working, or new products are in the market, there is a room for new buyers.
Indeed, Amazon is making a lot harder for the new buyers, it is all because some buyers know they are selling the counterfeit products, doing black hats cheating, buying the fake reviews, etc.
If people really want to sell on Amazon, they should do follow Amazon rules.
We all experience bad customers. If you use FBA, a lot of problems can be solved. When Amazon deals with the shipping and most customer services, they can see whether the problem comes from the product quality or the customer easily. They can ban bad customers as well.
Exactly! Great comment.
I’m at CESV in Orlando with the movers and shakers of the E-commerce world including Stephen himself. The overarching theme of this year’s CES conference is: Online sales are going to continue to increase rapidly and there is plenty of room. You all know the saying “When is the best time to plant a tree?” 10 years ago or now. Amazon, Ebay, Shopify and the many other e-commerce sites are booming. Get in there and do it. Thanks Stephen!
Yes! Good stuff.. that’s right: the best time to plant a tree is 10 years ago… and the second best time is today! Get on it!
My husband and I started selling fba in April of this year. We have paid hundreds of dollars in fba courses (only to find out they were all written before Feb 2017 when all the restrictions were put in place for new sellers). If you started selling before Feb and were grandfathered in to be able to sell in the now restricted categories and brands, fba could be very profitable. But as a new seller starting after Feb when all the restrictions were put in place, it is very difficult to find enough items to source in order to be profitable or make it worth your time. Maybe if you have the cash to start selling wholesale or private label you will have better luck , but retail arbitrage and online arbitrage are extremely difficult and frustrating.
Brenda, I know that restrictions seem to be everywhere… but so is profitable inventory. It’s totally out there to find and ramp up your sales on Amazon. Our new JumpStart Amazon course (www.fulltimefba.com/jumpstart) deals with these restrictions, and I’m also going to have a new YouTube video coming out soon that will share exactly how to respond and deal with these brand restrictions, category restrictions, sub-category restrictions, and even ASIN restrictions. Be sure to subscribe to my YouTube channel so you don’t miss out on that video (www.fulltimefba.com/youtube).
Most people don’t get approved because they assume restrictions are permanent. Many times, all it takes is seeking approval. Overall, there is still plenty of inventory to find and sell… and the more you sell the better your seller metrics become so your chance of getting approved to sell restricted items increase substantially. Think of it like leveling up in a game. The longer you play, the more you can level up and get approved to sell more items. Hope this helps.
Hi Stephen, Thank you for the response. It is encouraging. I think I already to subscribe to your you tube channel because I am a big fan of yours. I will go check out that video.
I had no idea when I started in May 2017 that starting after February 2017 was a bad thing. Maybe I am doing it wrong but even with the restricted categories, I am seeing steady 35-40% profit margins only part time. I will break $150K in sales before year’s end.
You’re doing great! Keep up the good work and don’t let the complainers get you down. Complaining, after all, is not a profitable use of time. 🙂
I’m just starting out what are some things you would recommend out what is your strategy?
Start here: https://www.fulltimefba.com/jumpstart
It’s not too late. I’ve been selling for quite a while now and I still see new people kicking butt with FBA. Just remember to focus on offering quality products and superb customer support.
Hi Stephen
I find your information very helpful. I am struggling to start my account, Amazon keep sending same repeated standard reply every time that I have hard time understanding.
Below is the reply
Can you explain what they want from me please? I have already send power and internet bills, my credit card statements, my account statements. I am totally not getting what they want, it could possibly be because the requirements that they are requesting might be a little different that I am not used to something like that.
Please help
We have reviewed the document(s) you recently provided.
We were unable to verify the document you provided because it was illegible.
Please provide the following updated documents and confirm there is a valid credit card on file:
–Utility bill with name and address visible
–Business license
–If you have active listings, include copies of invoices, receipts, contracts or delivery orders from your supplier issued in the last 90 days.
You can send files in .pdf, .png, or .gif format. These documents must be authentic and unaltered.
You may remove pricing information, but the rest of the document must be visible.
Please submit your documents by following this link (LINK REMOVED).
Once we receive your documents, we will review them and decide whether you may sell on Amazon.com again.
If you do not send the requested documents, we may cancel your listings and any funds in your account may be held for up to 90 days, but funds could be held longer.
Learn more about account reviews in Seller Central Help: (LINK REMOVED).
Best regards,
CA
The information on those documents must match 100% with the info you used to sign up for an account. If you said you live on “123 Main Street” and the documents say “123 Main St.” then they will not accept that. Maybe that’s the issue.
Hi Stephen,
I like your sincerity and honesty. I just discovered Amazon Fba. Please I will need your assistance. I am outside U. S and a student. Please help me out