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Should I Sell My Brand on Amazon?

What to know about the online marketplace.

Fortress Brand Team | October 12th, 2022

Published in The Marketplace Playbook

There are an estimated 1.9-2.5 million sellers in the Amazon marketplace today. They claim 200M+ unique customers per month and, as of 2021, Amazon claimed a portfolio of over 200M+ Prime members, with annual revenue for ‘21 coming in at ~ $469 billion. Big numbers, an abundance of sellers, and endless potential. Here’s what to know:

How much money is at stake?

Junglescout surveyed 3500 Amazon sellers in an effort to learn how they started and developed a plan to sustain growth. When it comes to revenue and profits, the study found:

  • 50% of Amazon sellers make $1k to $25,000k per month, worth ~ $12k to $300k in annual sales.
  • 13% of Amazon sellers bring $25k-$250k per month, equating to annual sales from $300k to $3M.
  • 22% of Amazon sellers earn under $500/month
  • 3% don’t know their monthly sales.
  • 30% of online sellers have reached a lifetime revenue of $100,000.

As for profitability, Junglescout found:

  • 65% of sellers see profit margins higher than 10%.
  • 32% see profit margins above 20%.
  • 20% reported lifetime profits over $50,000
  • 14% have exceeded $100k in lifetime profits

And, for most, it didn’t take all that long to get there. 64% of respondents said they reached profitability within the first year and another 11% of respondents, within two years—a promising picture.

What are the upfront costs?

Here’s the good news: launching your business on Amazon Marketplace requires lower investment in terms of time and money than most other business models. In the same study from Junglescout, 32% of sellers reported they spent $1k or less to get started and the majority (69%) spent less than $5k.

How do I gain traction?

Solid revenue potential and low start-up costs coupled with a relatively swift journey to (potential) profitability—assuming you make smart, thoughtful decisions, recognize when to bring in the experts when you need them and do your research—all seem to make the decision to sell on Amazon an easy one. Remember, however, that it takes work. All those millions of sellers plus their ~ 350 million products can make it difficult to stand out from the crowd. Don’t let this become a deal breaker. A few thoughtful strategies can help you get your brand noticed and increase exposure from there:

  • Invite your customer into the world of your brand; show how it adds value to their life.
  • It’s critical to ensure that your product images are clear, compelling and high-quality. The more detail and visual engagement from the customer, the more likely they are to buy.
  • Follow-up after the sale and when appropriate, request a review. On Amazon, the more 5-star reviews, the better—and you’ll rank higher on their search page.
  • Getting them means staying on top of your customer service, following up with customers post-purchase, and further driving loyalty.

How do I get started?

It can be as simple as deciding on a selling plan and diving in. However, your chances of success are much greater if you do some research and planning ahead of time.

  • If you’re a private-label seller, (offering products on Amazon under your own brand name), first identity and curate a selection of merchandise. (Start with bestsellers—they’re the most likely to stand out in the marketplace.)
  • Map out your supply chain in exacting detail. Is your current warehouse solution sufficient to increase sales or would it be more productive to use Amazon FBA? No matter what you decide, well-planned inventory is the key to it all; make sure your logistics are in place.
  • Once you have your product catalog and supply chain in place, the type of account you choose depends on your projected sales volume. Amazon offers a useful comparison to help you make the right decision.
  • Finally, it’s critical to create a differentiated, compelling marketing plan. Research your competitors and analyze their listings to spot opportunities where you can rise above and apart.
  • Set your ad budget and a plan as to how you’ll allocate the funds.

How can we help?

Fortress is a full-service brand accelerator, which means our goal is to help your business grow and succeed on Amazon and beyond. In addition to our own track record in building and growing successful brands, we act as a 360 resource along with our partners Taylor & Pond, School House, and FINC3, who provide digital marketing, media, and creative services. That said, deciding whether to bring on an agency is another big decision and can often unlock tremendous opportunities for your brand. (We even wrote a blog article about it.) Whichever way you go, we’re here to answer all your questions. Reach out to TK or stop by @fortressbrand for the very latest.

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