The Amazon FBA success rate in 2024 is between 1% to 27%, according to TrueProfit. Only 1% of sellers succeed with an annual salary of around $100,001-$250,000, while 27% achieve success by making $1,001-$5,000 per year. Succeeding in this industry means properly managing your performance metrics like conversion rates, profit margins, order defect rate, account health rating, and many more. Utilizing the Amazon Best Sellers Rank and Amazon Brand Registry tools allows you to optimize product sales and prevent issues like listing hijacking. Experienced Amazon FBA sellers also maximize Amazon Buy Box (now Amazon Featured Offer) to increase store and product discovery.
According to Quora user Jonas Leuffe, customer reviews are the most important thing for succeeding in Amazon FBA. He said that most sellers gain many negative reviews over time because of neglecting product quality and supplier reputability. Tech2Globe also mentioned how considering product competition, selection, marketing, and pricing are crucial to achieving continued growth and profitability. In fact, Jungle Scout's survey revealed that only 31% of beginner Amazon FBA sellers make at least $500 monthly.
Increasing your success rate depends on how you handle Amazon's fee structure, rules and regulations, and tools and services. This article focuses on critical metrics you need to consider, reasons individuals fail in Amazon FBA, and helpful tips on how to succeed and grow your business. Plus, top success stories and a more profitable and scalable business model for achieving financial stability in 2024 and beyond.
9 Key Metrics for Boosting Your Amazon FBA Success Rate
What Percentage of Amazon FBA Sellers are Successful?
46% of Amazon FBA sellers are successful, according to data from TrueProfit. These sellers have an 11%-25% success rate with 64% of them achieving profitable businesses within 12 months. Brian Connolly's 2024 article on Jungle Scout also reveals that 57% of Amazon FBA sellers exceed the 10% profit margin mark while 28% achieve over 20% in profit margin. However, 13% of Amazon FBA sellers in 2024 reports not earning enough profit. In fact, Reddit user NotimeleftinMelbs transitioned from a 100% FBA model to 30% because Amazon's policies are getting more strict. They identify and regulate businesses that are making significant income to make sure they have paperwork or authorizations for the products.
Comparing Amazon Success Rate With Other Businesses
Simple display of why internet businesses kick ass.
Amazon FBA
Restaurant
Startup Cost
$15,000+
$250,000+
Profit Margin
15%-40%
3%-5%
Success Rate
10% become 6 figure sellers, around 25% make $1000 to $6000 net profit per month.
20% succeed long term. (60% fail within 1 year, 80% fail within 5 years)
Amazon FBA beats getting into the restaurant business in every way.
How does Amazon FBA compare with another online business like local lead generation?
Amazon FBA
Local Lead Generation
Startup Cost
$15,000+
$2000
Profit Margin
15%-40%
80%-95%
Success Rate
Roughly 35% make at least $1000 per month or more
Rough estimate, 40% simply because the business is less competitive than Amazon FBA
Being able to profit from Amazon's large user base is a great opportunity, but I will always love local lead generation because you have such high profit margins since you're not dealing with physical products. It's less hassle too.
What I love about Amazon FBA is that if you build an exceptional brand, you can sell it (exit) for 3-5 multiple of annual revenue. Which is crunching time in a major way.
Top Amazon FBA Success Stories
Reddit user 10kFBA shared how he made about $850,000 in a year selling DIY project materials on Amazon FBA. He achieved a good sales volume for his niche products even without spending money on advertisements. 10kFBA only relied on his affiliate links to drive traffic into his store. Since he started in 2016, he's been exploring new niches and product sets to increase product sales. 10kFBA grew his product list gradually by adding 2-5 products yearly.
In Travis Marziani's YouTube channel, Anna mentioned how she made $1.2 million in profit in just a year of Amazon FBA selling. She started her Amazon journey with a $700 initial investment to sell ocean-based products. Anna's total operating costs ran around $26,149 because she formed an LLC for business protection and invested in other equipment. She attributes her profitable and successful journey to using high-quality product images and Amazon's array of tools and services.
In another Reddit post, user Adorable-Gas-3926 revealed how he makes £220K-£230K ($27K-29K) monthly in gross profit. His Amazon FBA business generates about £800K (over $1M) yearly in revenue. Adorable-Gas-392 grinds 6 hours daily to make a significant income. When he started in this industry, he didn't join any Amazon FBA courses. His success relied on his time and effort.
How Much Money Do Amazon FBA Sellers Make on Average?
27% of Amazon FBA sellers make $1K-$5K yearly on average, based on TrueProfit's latest data. 22% make under $500 per year while 13% make $5K-$10K yearly. However, gross business revenue differs from profit margins. According to Jungle Scout, 18% of Amazon FBA sellers make around 16%-20% while only 3% achieve 51%-100% profit margins. New Amazon sellers can earn between $26,000 and $810,000 annually, but those are sales numbers. They tell us nothing about what these sellers are actually taking home.
So, when you consider the Amazon FBA success rate, remember that it’s not all about the sales. You also need to consider your initial investment, advertising, and Amazon FBA fees. These fees alone take 15% of your product’s selling price. Reddit user DollaBillsErrDay shared how he/she makes a 7-figure revenue with a 30% profit margin. It took 2 years for him/her to scale to a 7-figure income. But these aren't numbers you'll see as you begin your journey.
Why Do People Fail at Amazon FBA in 2024?
1. They don’t choose the right business plan. Most people fail at Amazon FBA in 2024 because of this mistake. This is important because it's what makes the business run in the right direction. Successful Amazon FBA sellers refer to this as a guide whenever problems arise. So, make sure you choose the right business plan for you. Sellers base their businesses off of wholesale, private label, and retail arbitrage strategies. Each has their own advantages and disadvantages.
2. They jump in without researching their product. According to Quora user Curtis Keeping, most sellers start a business without acquiring in-depth knowledge about the business model first. This leads to burnout and individuals quitting before even starting to sell products. Brainstorm products and research them well, so you don’t spend your initial investment money on a product that is a guaranteed flop.
3. They offer poor customer service and get critical reviews. Most sellers don't ask for a product sample for their suppliers or wholesalers before listing them. That's why some customers end up complaining because of substandard products. An anonymous product researcher at Amazon posted on Quora about how some Amazon sellers not giving importance to their product sourcing process. So, choose high-quality products and help customers with issues. Amazon will rank your product higher for it.
4. They expect too much. Many Amazon FBA gurus promise overnight success. They tout high numbers without being honest about profit margins. Be realistic with yourself. Amazon FBA will take time, effort, and investment.
5. Expecting lower initial investment. The biggest issue could be that most people underestimate just how much investment it will take to succeed with FBA. Most gurus paint the picture that all you need is $5K to launch a product, however that's if everything goes perfectly. Most sellers admit to failing multiple launches before they succeeded.
How To Succeed in Amazon FBA?
Why Local Lead Generation Has a Higher Success Rate Than Amazon FBA
Amazon FBA is a profitable business venture because you get to list as many products as you want. However, local lead generation is more lucrative and has a higher success rate in 2024 due to its lower market saturation and high profit margins. Successful Amazon FBA sellers took time to learn the business model and implemented countless trial-and-errors before making significant income. In fact, 31% of sellers only earn under $500 monthly, according to Jungle Scout.
SellerApp's 2022 Amazon Seller and Consumer Statistics article revealed that there are around 9.7 million Amazon sellers worldwide. Competing with this amount of business owners is mentally and physically challenging. Be prepared to wait at least 6-18 months, and maybe even as long as 2 years. However, this number depends many factors. If you choose the wrong product, or don't have the expertise to back up your research, you could lose your entire investment. It can take a long time to become profitable in Amazon FBA. In fact, there's only a 10% success rate of sellers making $6,000 in net income monthly. Out of which, an even smaller percentage actually stay profitable for 5 years or longer.
On the brighter side, local lead generation is a business model with a 35% success rate. It is more scalable and profitable than Amazon FBA because of the local market and niches it caters to. This means that you don't have to compete with 1.9 million active sellers. And because your audience is ready to buy, you don't need to spend hours optimizing your listings continuously just to attract potential customers. In Amazon FBA, you spend money to buy stock you don't know will be sellable. Local lead gen has lower startup costs that can yield profit margins of up to 80%-95%. All you need is to build microsites for local services and rank them organically on search engines like Google. Free leads will start messaging and calling. You can sell these leads to local business owners and make over $50K monthly with just a few sites.
Ensure business success in the 21st century's cutthroat business landscape. Build a stable future by generating passive income through local lead gen.
