Do You Have Enough Time and Money to Start Selling on Amazon?

More and more Canadians are considering internet side hustles, home-based businesses, or selling their products online. Amazon provides a platform to quickly and profitably turn those dreams into reality, even if you’re new to online business. Within three months, most beginners have their Amazon business started and their first live listing. Almost all of them have their business operational within a year.

More than half of Amazon’s $280 billion revenue in 2019 was fueled by its global network of third-party sellers, be they aspiring entrepreneurs, home businesses or major brands. A 2020 Jungle Scout survey found 5 percent of third-party sellers reside in Canada, suggesting a lot of room for growth on Amazon.ca.

All things considered, it’s little wonder so many aspiring Canadian entrepreneurs are intrigued by the possibilities. However, there are two questions that immediately come to mind.

  1. How much time does it take to sell on Amazon?
  2. How much does it cost to start selling Amazon?

If you combine the monetary value of your time with the actual money you have to spend, you’ll get a better idea of the overall cost.

How much money do you need to start selling on Amazon?

Amazon reports that over 30,000 Canadian small-medium businesses made more than $900 million in sales on Amazon.ca in 2018. But how much did it cost to generate those sales? Can you afford to start?

You may be pleasantly surprised to hear that 32 percent of the most successful Amazon sellers surveyed, spent $0-500 USD to start their business… and they’re still going strong over five years later.

While there is no such thing as a typical online income, these actual experiences reported by current Amazon sellers will provide you with a reasonably good idea of the cost.

  • Sixty percent of active sellers spent less than $5,000 to get started on Amazon, and 29 percent spent less than $1,000.
  • 17% of Amazon sellers spent less than $500 USD
  • 12% invested $500-1,000
  • 13% spent $1,001-2,500
  • 18% invested $2,501-5,000
  • 21% spent $5,001-10,000
  • 21% invested over $10,000

They spend that money in a variety of ways, including product sourcing/testing, Amazon seller fees, and marketing.

The cost of starting an Amazon business in Canada will be impacted by outside factors as well, not the least of which is how well you choose your products. In a nutshell, you’ll want to select products that are proven sellers with low competition and great margins.

There are several product research tools out there to help you with this stage of your evaluation, and ensure profitability going forward. Jungle Scout is one of the most popular Amazon selling tools, providing a product database, supplier database, product tracker, keyword scout, sales analytics and an inventory manager. The functionality and data are invaluable, as you select and manage your products.

Interestingly, data indicates those who start small have the best chance of success.

Sellers who spent less than $500 starting their Amazon businesses:

  • Had their listings live on Amazon before those who invested more money. Sixty-seven percent were actively selling within six weeks, compared to 51 percent of those who spent more.
  • Were profitable before those who invested more. Forty-six percent of sellers reported being profitable in fewer than three months, compared to 30 percent of higher spenders.
  • Have solid profit margins. Sixty-seven percent reported profit margins higher than 10 percent, and 23 percent had profit margins over 25 percent.

Sixty-seven percent of sellers were profitable within a year, and nearly all were profitable within two years.

Half of sellers surveyed have reached lifetime sales of more than $100,000 USD, and 22 percent have exceeded $1 million.

How much time does it take to sell on Amazon?

Successful sellers don’t necessarily spend a lot of time on their Amazon businesses. Fifty-seven percent spend fewer than 20 hours each week doing so, and thirteen percent spend just over 30 minutes each day.

  • 13% of sellers spend fewer than four hours each week on their Amazon business.
  • 24% spend 4-10 hours
  • 20% work for 11-20 hours
  • 15% spend 21-30 hours
  • 10% work for 31-40 hours
  • 9% spend 41-50 hours
  • 3% work for 51-60 hours
  • 6% spend over 60 hours each week.

You’ll probably spend the most time launching your online business. Once they find products to carry, many sellers are able to spend less time simply maintaining their businesses.

Most (64 percent) of beginners with less than two years of experience say they spend up to 20 hours each week on their Amazon businesses, compared to 37 percent of sellers with over five years of experience.

Anyone Can Do It!

You’ll have to spend some time & money to start selling on Amazon, but it’s affordable for most. The learning curve is manageable and it’s a great way to start an online business journey.

Any questions? Please comment below or join us in our Canadian Online Business Facebook Group.

Data Source:
2020 The State of the Amazon Seller: Insights from 1,046 Amazon sellers

✔ You may also be interested in reading:

10 Low-Cost, Part-Time Businesses you can Start Online from Home
5 Quick and Easy Online Businesses to Start in Canada
12 Ways to Slash Shipping Costs for Canadian Small Businesses

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Digital Business & Marketing Manager at | Website | + posts

Melody McKinnon's formal education is in business management, which she enhanced with more than 60 certifications revolving around business, marketing, health, general sciences and writing. In over 20 years of working online, she has owned or managed both educational and eCommerce websites.

Melody has worked with many businesses & brands in a multitude of capacities. She can often be found on CanadiansInternet.com, CanadianFamily.net and AllNaturalPetCare.com, as well as other quality digital publications. Her content has earned reference links from highly-respected websites, magazines and university textbooks.

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Douglas J Linton

I would like to start a Dropshipping store To earn enough money to promote my actual Business goals which are to advise and get entrepreneurs and small business their Internet Presence/ domain name/ website with a storefront on it and anything else they need for their business.

Lawrence

Good post.