According to JungleScout’s 2022 Seller Report, 63% of Amazon sellers achieve profitability within their first year. Although that certainly provides insight into the question of “how long does it take to sell and make money with Amazon FBA”, it doesn’t tell the entire story.
Due to the variability of factors like which Amazon FBA business model you’re using, product category competition or individual business circumstances, the answer is complicated. Therefore, we break the question down into approximate timetables for each major step of the way and then use a case study to provide a realistic expectation of what a seller’s journey towards profitability looks like.
Plus, one simple trick that can save you weeks on the time it takes to start making money on Amazon!
How Long Does It Take To Do Product Research for Amazon FBA?
The first step of getting started with Amazon FBA is finding a product to sell on the Amazon Marketplace. You could do retail arbitrage to find short-term opportunities or partake in the Amazon Handmade program by making your products yourself. These are 2 of the other different Amazon FBA business models that offer a fast money opportunity. However, Amazon FBA sellers are most known for creating scalable businesses by researching Amazon to find longer term product opportunities and sourcing in bulk to maximize profitability.
A Better Lemonade Stand, a popular ecommerce business journal, recommends spending at least 20 hours on Amazon FBA product research. You can say the company founder Richard knows a thing or two about ecommerce, considering that as part of Shopify’s Growth Team, he contributed in growing the company from 60,000 to 200,000 merchants by educating others on how to launch and scale ecommerce businesses.
Dan Vas is another expert on the matter, with hundreds of thousands of YouTube subscribers flocking to his channel for Amazon help. Dan notes that finding a product worth selling can take 1 - 2 weeks. It’s best to spend sufficient time on product research to avoid rushing into a business before you even understand what you’re doing.
Based on our own experience with Amazon FBA product research and the opinions of respected names in the industry, Amazon FBA product research takes on average 20 - 40 hours. Therefore, depending on how much time you have for your Amazon business, you can expect to find a product opportunity on Amazon in 1 - 4 weeks.
How Long Does It Take to Contact Suppliers and Order Samples?
Finding and Contacting Suppliers
Once you have a product to sell, you need to find a reliable supplier who can provide you the product for a fair price and quality that your customers will be satisfied with. There are a few ways to find suppliers, but a business to business (b2b) marketplace is probably the most efficient. A b2b marketplace is a directory of suppliers that allows you to quickly find companies that can meet your product needs. It may take you a few hours at most to gather a list of potential suppliers to work with, but communicating with those suppliers can take time.
If you’re sourcing localing from your own country, such as finding a supplier using ThomasNet in the United States, you can get on a phone call and have your questions answered within a few days. However, if sourcing internationally from a Chinese supplier as is a common practice on Amazon, expect communication to take longer. The barriers of language and working hour time difference can force communication to drag out.
Amazon guru Tatiana James suggests avoiding platform communication on b2b marketplaces like Alibaba and instead going straight to email for faster communication. She notes that some suppliers won’t even take your first email seriously and you’ll have to follow up to receive a response. Then, you can transition to an instant messaging app like WeChat or WhatsApp for faster communication.
Expect to spend around 2 - 4 weeks on contacting suppliers. You want to contact multiple suppliers, with each communicating back at various speeds. You will also need to go back and forth with the suppliers as you both answer each other’s questions. Once you find a handful of suppliers you want to work with, it’s time to assess their ability and order samples.
Receiving Product Samples
Air freight is the most common method for receiving samples from overseas. Ordering samples by air freight is expensive, but you will receive the samples in around a week. If ordering samples domestically, ground shipping with UPS takes 1 - 5 days. Therefore, many businesses are able to receive samples and make a supplier decision in 7 - 10 days.
Of course, the type of product you’re selling will also influence the length of time needed to find a supplier. If you’re doing wholesale and just looking for a manufacturer to provide you a basic product, you’ll likely need no more than one product sample to make a partnership decision. However, if you’re selling private label and having the manufacturer enhance a product or create one from scratch, you may need to receive multiple sample revisions before settling on a supplier.
With that said, assume the whole process of finding a supplier and comparing samples to take about a month.
How Long Does It Take for the Supplier to Ship to the Amazon Warehouse?
With a supplier picked out, you pay them a down payment to start production of your products. According to BigCommerce, it takes a manufacturer 3 - 4 weeks to prepare products for shipping. Once the manufacturer notifies you that your products are complete, you will want to send an inspection company to verify the products meet the agreed upon quality standards. Web Retailer notes that inspection reports are at least 30 pages in length. Allow a week for the inspection company to complete their task of visiting the factory, product inspection and final reporting to you.
If after inspection the products have been produced to standard, you pay the remaining balance to release the products for shipping. There are two options for receiving your products from overseas: air freight or sea freight.
According to Guided Imports, air freight from China to the USA takes between 1 - 15 days, depending on if you go with an express option or not. However, sea freight is most common for Amazon sellers because it is substantially cheaper for larger loads and superior for scaling your business. Sea freight from China to the West coast of the USA takes at a minimum 15 days, and at least 25 days to reach the East coast.
All variables considered, expect 6 - 8 weeks from the time you place the product order to the time your products arrive at the Amazon warehouse.
What Should You Do While the Manufacturer is Preparing Your Products?
Even though you are waiting for your products, you should not be waiting idly as there is still a lot to prepare. Unless you are selling a generic or product of another brand that already has a product listing, you will need to create and optimize your Amazon product listing if you want to make any sales.
That means you need to prepare captivating copy and have professional looking photos to attract buyers to view your product listing. Unless you are a skilled copywriter and/or have a high-quality camera set up with the knowledge to take product images, you may need to hire freelancers to help in creating your product listing.
You can find affordable, high- quality freelancers that specialize in Amazon content in a matter of days. Project turnaround times can vary, but listing copy and product photos should take no more than 1 - 2 weeks. Some freelancers even offer a full package of keyword research, copywriting and product photos with a 7 day turnaround on Fiverr.
How Long Does It Take to Rank Highly Enough to Generate Organic Sales on Amazon?
Ranking on Amazon is the value Amazon places on your product when someone enters a search term into Amazon. Amazon is a giant search engine where products are organized based on the keywords you use in the product listing, called indexing. Then, Amazon’s A10 algorithm assigns your products a value for each keyword it is indexed for, which depends on the selling metrics for that product compared to other products also indexed for the same keyword.
For example, if “camera bag” is one keyword for your product and Amazon’s algorithm finds customers are most likely to buy your product over every other product with that as a keyword, your product will likely rank #1 or at least be high on the first search result page when someone types that search term into Amazon. Although your product is indexed for all keywords used, Amazon does not always rank you because there would be too many result pages. Therefore, your product may not even be ranked at all until you generate some sales.
With around 3,000 new sellers joining Amazon daily, according to EDesk, and veteran sellers already having established high reviews and product rankings on the platform, ranking on Amazon is an uphill battle. If you are a new FBA business with a new product, you will be highly reliant on advertising to drive any sales of your product. Amazon PPC spend will diminish your product’s profit margin as you try to generate enough sales velocity to move up the rankings and get enough product reviews to establish consumer acceptance of your product. Sometimes, you may not be left with any profit margin at all or have to go negative in the beginning if you want to generate any sales.
However, as sales start coming in, the Amazon A10 algorithm will move your product up in ranking and you will become less reliant on Amazon PPC to generate sales. Product ranking is extremely variable and depends on how competitive the keywords are for your product and how much money you can dump into PPC campaigns to generate high enough sales.
Amazon experts like Riley Bennett agree that 180-day sales velocity and conversion rate play the most important role in Amazon ranking. Therefore, give your product a minimum of 6 months to rank well, as that is when Amazon’s algorithm will have the 180 days of sales velocity data and sufficient time to receive enough reviews to have an acceptable conversion rate.
Costs of Selling on Amazon
Before getting into the case study, it’s important to know and understand the various costs and fees associated with an Amazon FBA business that you must overcome to be profitable.
A product research tool is a necessary expense recommended by Amazon experts to assist you in efficiently finding products and carrying out keyword research.
Prices range from $30 - $200+/month. For example, we use Viral Launch’s most Pro subscription, which provides all the tools you need for research and analysis at $99/month.
The cost of your products will almost certainly be the most expensive cost you have as a third party seller. Typically, you will put 30% down to have the manufacturer create your products and then pay the remaining 70% to release them for shipping.
International freight and paying any duties on your products is another usual and major expense for an FBA seller. There are free shipping and customs import duties calculators available online you can use when estimating your shipping costs.
Seller Plan Type in Seller Central
With a seller account on Amazon Seller Central, there are two selling plans to choose from. You can either choose the individual seller plan which charges $0.99/item sold or pay a flat $39.99 with the professional plan.
Unless you plan to be a small scale seller with less than 40 items sold each month, the professional plan is usually the way to go.
Also, only professional plan sellers have access to Amazon advertising and the convenient Buy Box all sellers want to win.
Amazon also charges a percentage referral fee on each item sold. The percentage fee is based on the product’s category and ranges from 8% - 15% on the platform.
For example, if you are selling a $100 blender from the Kitchen category, you would be charged 15%, or a $15 fee when the product is sold.
When leveraging the benefits of selling through the Amazon FBA program like outsourced customer service and product fulfillment, of course there are also associated fees.
Amazon fulfillment fees are based on the item dimensions, weight, and category. For example, a T-shirt weighing under 6oz has a fulfillment cost per unit of $3.27.
On top of fulfillment fees, Amazon also charges storage fees for the products you keep as inventory in Amazons warehouse.
These fees are charged to your account the month following when they were accrued, usually between the 7th and 15th.
Storage fees are based on the daily average volume for the space your products use in the fulfillment center and vary depending on the time of year, product type, and size tier.
For example, if you have a non dangerous, standard sized product that sits in the Amazon warehouse during the peak months of October and November and is 1 cubic foot in size, your storage cost would be $4.80.
Standard size products are smaller than oversize products in Amazon’s size tier system.
However, Amazon actually charges a higher rate for storing standard size items because they are stored with more complex shelving.
Amazon advertising allows you to drive traffic to your product listing, which otherwise would not receive traffic because of low ranking compared to established similar products.
By leveraging Amazon ads, you can generate sales and receive product reviews so that your product can move up in organic ranking.
The cost of Amazon PPC depends on your product’s category and ad type chosen. JungleScout notes that costs per click can be as low as $0.05 or even as high as $10!
With Amazon advertising, you set a daily budget you can afford so you can collect valuable data and optimize your campaign over time.
Amazon FBA Case Study
Now that you know the usual costs associated with starting an Amazon FBA business, let’s look at an example.
The following is true:
- Use a Professional seller account
- Ship products by sea
- Skip hiring freelancer for product listing
In December, before you start your business, you purchase a one month plan of Viral Launch Pro to find your product. Also, you settle on a supplier and are prepared to order January 1st.
Cash in: $0
Cash out: $2,088.99
Total Business Profit/Loss: - $2,088.99
Cash in: $0
Cash out: $10,178.98
Total Business Profit/Loss: -$10,178.98
Amazon receives your products at the Amazon warehouse and you can begin selling. In March, you sell on average 5 products/day.
Because you are a new seller, you rely heavily on Amazon advertising. This cuts into your profit margins by $6/unit.
You are selling 5 units/day, so you have enough inventory for 100 days at this pace. However, you expect sales to pick up because your product is already selling well to start.
Therefore, you place another product order on March 15.
March Storage Fees
You start the month with 500 units and end with 155 less (31 x 5), or 345 units. Therefore, your average units for the month are 422.5 units stored in the Amazon warehouse ((500 starting + 345 ending) / 2).
Storage costs for your product type in this month are $0.83/cubic foot. Each unit of your product is 0.3472 cubic feet, meaning your average inventory in cubic feet for March is approximately 147 (422.5 x 0.3472).
Therefore, your storage fees for March are charged in April as $121.75 (147 x $0.83).
Cash in: $7,750
Cash out: $4,979.94
Total Business Profit/Loss: -$7,408.92
Remaining Units in Amazon Inventory: 345
By April, you have better optimized your Amazon advertising so that it only cuts into your profit margin by $4.50/unit.
Furthermore, you have optimized your Amazon listing itself and improved your conversion and click-through rates so that your average sales are up to 7 units/day.
You placed your reorder on March 15th, so on April 15th you pay the remaining 70%.
April Storage Fees
You start the month with 345 units and end with 210 less, or 135 units remaining. Therefore, your average units for the month are 240.
Storage fees for April are $69.16, charged in May.
Cash in: $10,500
Cash out: $11,447.64
Total Business Profit/Loss: -$8,356.56
Remaining Units in Amazon Inventory: 135
In May, you further optimize your Amazon PPC campaigns and have moved up in keyword ranking, so PPC spend only cuts into your profit by $3/unit.
Your improved keyword ranking has also boosted your average daily sales to 9 units in the month, or 279 total.
With increased sales, you are running out of inventory faster. You place a reorder on May 1 and double your order to 1,000 units, which decreases your manufacturing cost per unit from $13 to $11.
May Storage Fees
You start May with 135 units of inventory. On May 15th you sell out of your first order, so your inventory is 0, but your second order of 500 arrives at Amazon’s warehouse.
From May 16 - May 31, your average sales are 9 units/day, so at the end of May you are left with 356 units.
Your average volume for the first half of the month is 67.5 units, while the last half of the month is 428. Taking the average of these two averages, your daily average inventory is approximately 248.
Therefore, your inventory cost for May is $71.47, charged in June.
Cash in: $13,950
Cash out: $8,454.06
Total Business Profit/Loss: -$2,860.62
Remaining Units in Amazon Inventory: 356
In June, your Amazon PPC spend stays the same as the previous month. However, you increase your average daily units sold from 9 to 11 units, or 330 units for the month.
June Storage Fees
You start June with 356 units, sell 330 units in the month, and end with 26 units remaining. Your average units are 191 for the month.
Your inventory cost for June is $55.04, charged in July.
Cash in: $16,500
Cash out: $20,187.16
Total Business Profit/Loss: -$6,547.78
Remaining Units in Amazon Inventory: 26
You receive your order of 1,000 units on July 1st. Increasing product reviews continues to improve your keyword ranking and boost sales from 11 to 13 average daily units, or 403 total.
Due to increasing orders, you place another product order of 1,000 units on July 1st.
July Storage Fees
You start July with 1,026 units of inventory and end with 623, or 824.5 daily inventory. Your inventory cost for July is $237.60, charged in August.
Cash in: $20,150
Cash out: $9,959.9
Total Business Profit/Loss: $3,642.32
Remaining Units in Amazon Inventory: 623
In August, your product sales mature at 15 units per day, or 465 for the month. You maintain an Amazon PPC cost of $3/unit sold.
August Storage Fees
You begin August with 623 units of inventory and end with 158, or 390.5 average daily inventory. Your inventory cost for August is $112.53, charged in September.
Cash in: $23,250
Cash out: $22,552.44
Total Business Profit/Loss: $4,339.88
Remaining Units in Amazon Inventory: 158
At this point your Amazon store is cash flow positive and profitable. The business has paid you back your initial investment and any future product orders at this level can be paid for out of profits.
From here, there are numerous options for an Amazon business, such as:
- Maintaining the business at its current level
- Being more aggressive with Amazon advertising to improve product ranking and try to improve sales of current product
- Expanding the business by finding and selling another product (smart choice)
A realistic expectation for a new seller to achieve profitability with their Amazon business is six months to one year. However, that doesn't necessarily mean you should start taking money out of the business at that point if you only have one product you're selling. With just one product, your business is very much at risk of falling apart if something were to happen to that product. Your niche could become overly competitive, a superior alternative could take your market share, a supply chain issue could impact your sourcing ability... the list goes on.
Therefore, it's important to continue reinvesting your profits back into the business until you have 4-5 products that are generating revenue for the business. Realistically, it could take a few years before you can even consider taking money out of the business for personal use.
If that seems like too long for you, Amazon offers some other creative ways to make money by partnering with them. You could become an Amazon influencer and promote other people’s products through Amazon associates, making an affiliate commission on each sale. For RV owners looking for occasional work, the Amazon Camperforce program could be a good option. If you don’t own an RV but have a regular vehicle, you could earn money by delivering packages with Amazon Flex.
Whether or not you have the patience for Amazon FBA, Amazon is a massive company with many potential avenues for making money. If you are set on creating a lifestyle of freedom through online business, Amazon FBA is just one of the many potential avenues. We also rated other great online businesses, some might be a better fit for you.