Selling on Amazon

How Long Does it Take to Make 10k a Month on Amazon?

By July 19, 2021 No Comments
 

When we ask people interested in selling on Amazon how much they’d like to make in a year, a common answer is $10,000 per month. As you’d imagine, there are a wide range of answers from around $1,000 per month to $100,000 per month. $10,000 per month is the most common. I think this goal is popular because it’s a comfortable six-figure income for just about anyone. You can’t live lavishly, but you can live comfortably on $10,000 per month in income.

So, in this article, I want to give you a realistic estimate of how much time it may take you to build a business that makes you $10,000 per month in take-home income selling on Amazon. Income from a well-built online business is the best type of income, in my opinion. A job might require you to be at an office, attend meetings you hate, work with people you don’t like, and do mind-numbing work you dread. With a good business, you get to choose what you do and when you do it. I’d much prefer to make the same income from a business I own than a job I hate.

Even though I will give you an exact timeline that’s as realistic as possible, nothing I say in this article is a guarantee of results. There are no guarantees in business. Your results will greatly depend on the time you invest, the money you invest, your previous experience, and luck. I’ve done the best job I can to lay out a reasonable timeline based on my twelve years in ecommerce building my own businesses and teaching tens of thousands of others.

Before we begin, I’d like to give you the answer to your question. I can’t stand articles that promised the answer to a specific question, then don’t give it to me until I scroll through countless pages of writing. So, here it is: 12-18 months. That’s how long, based on what you’ll learn below, I estimate it can take someone to build a business selling on Amazon that allows them take home $10,000 per month in income. Now, let’s see why this estimate makes sense and how you get to your target faster.

What do we mean by “Amazon FBA”?

First, let’s clarify the business model. The term Amazon FBA is often used as a catch-all for a certain type of business in which Fulfillment by Amazon (Amazon FBA) is only one component.

FBA is a fulfillment network created by Amazon. You can ship your products into Amazon’s FBA warehouses around the world and they’ll ship out orders for you. If you sell on Amazon, it’s a great system. The people who buy from you on Amazon can get one-day or two-day free shipping if they’re Prime members. You pay reasonable fulfillment fees, which you’d have to pay someone else anyways, and get the added benefit of increased sales by being available for quick shipping. Your business also becomes quite simple: you list products on Amazon, you market them, Amazon takes care of all the fulfillment, and you get paid every 14 days from Amazon.

When people refer to an “Amazon FBA business”, they’re usually referring to selling private label products. You find a good product to sell on Amazon, you contact a manufacturer of similar products, and you get them to put your own logo on the product. You might find John’s XYZ coffee pot on Amazon and create your own similar coffee pot with your own brand name. This model gives you higher profit and a more valuable business than reselling someone else’s brand of a product.

If you combine Fulfillment by Amazon and selling private label products you get what people typically refer to as an Amazon FBA business. That’s the model I’m most familiar with and is what everything below is based on.

What is required to make $10,000 per month?

We recommend a target profit of a product sold on Amazon, after all costs and fees, of 25%. This means if you sell a product for $100, you should pocket $25 per sale after all costs are considered. If you want a breakdown of those costs and fees, read this article.

You will likely have other costs than just product-related costs. So, let’s take out an additional 5% per unit as an estimate. This leaves you with 20% per sale in net profit.

You could take 100% of your profits and pay yourself. You’re better off use some of your profits to expand your business so you produce far greater profits in the future. I’d recommend leaving at least 25-50% of your profits in your business. However, it’s up to you. If you don’t leave anything in your business, you only need $10,000 in profits to pay yourself $10,000 per month. If you leave 50% in your business, you need $20,000 in profits to pay yourself $10,000 per month (50% of profits).

To make $10,000 to $20,000 per month in profit at a 20% net profit margin, you need $50,000 to $100,000 per month in sales.

A typical selling price of a private label product sold on Amazon is around $30. To make $50K-$100K per month in sales with a product sold for $30, you need to sell 1,700 to 3,400 units per month after some rounding, or 56-112 per day.

If you sell three products, you need to sell 19-38 units per day each. A simplified target to comfortably achieve $10,000 per month in take-home income from your business is to sell 30 units per day of three products at an average selling price of $30 each.

Is this easy? No. Is it doable? Absolutely. One product may flop, another may take off. You might have to scratch a product to replace it with a better one. The market might change, new competitors may come in. But, if you focus on long-term growth and progress, you can get to your goal.

The timeline to $10,000 per month

Your upfront inventory investment greatly affects the speed to which you can get to a certain monthly profit target. So, let’s assume you start with a budget of $10,000. You invest $7,500 upfront in inventory and initial marketing costs. You use the remaining $2,500 to order additional inventory once your first shipment begins selling out. You may not want to invest this much upfront, which is OK. It might mean you will take longer to get to your target.

Here’s an estimated timeline you might expect to get to $10,000 per month:
• Research products & suppliers: One week
• Order and evaluate samples: One week
• Order inventory & wait for manufacturing: 5 weeks
• Ship product by sea: 5 weeks
• Prepare your Amazon product listing page: 1 week
• Launch your first product: 2 weeks
• Reorder inventory, keep marketing, & research next product: Two months
• Total time so far: 23 weeks or about 6 months
• Estimated daily sales: 20 units per day (22% of target)
• Order second product, wait for manufacturing & shipping, prepare 2nd listing: 11 weeks
• Launch your second product: 2 weeks
• Reorder inventory, keep marketing, & research next product: 8 weeks
• Total time so far: 44 weeks or 11 months
• Estimated daily sales: 40 units per day (44% of total)
• Order & launch third product: 13 weeks
• Keep marketing until you achieve target goal of 30 units per day per product: 4 weeks
• Total time so far: 61 weeks or about 15 months
• Estimated daily sales: 90 units per day (100% of total)

How to speed up your success

First, invest more time. The more time you put into marketing, staying on top of suppliers, and analyzing your business, the faster your business will grow. All else equal, someone who puts in one hour a day will take much longer to get to $10,000 per month in profit than someone who puts in three hours per day.

Second, invest more money, within reason. If you can only afford $2,000 in upfront inventory, it will take you a lot longer to have enough product to sell to make the $50K-$100K/month in sales needed to produce $10,000/month in income. I once talked with a member who built a business with monthly sales of $180,000 in only six months – highly unusual. I asked him how much he started with – his answer: $60,000. I do not recommend you invest that much upfront if you’ve never sold on Amazon before. A maximum of $20,000 is recommended, even if you have the money. It will let you learn and make mistakes cheaper. You can always invest more to grow faster later.

Get help from experts. Whether you take a course, watch YouTube videos, read articles, or hire a coach, using the knowledge of someone who has years of experience in this business will speed up your success. You can learn more effective marketing strategies for Amazon and avoid lots of mistakes. The purpose of this article isn’t to sell our products, it’s to educate. However, if you’re interested, we have a program that walks you through how to build your own ecommerce business with Amazon from scratch. We’d love for you to join us if you’re interested.

Conclusion: 12-18 months to $10,000/month

Remember, the simplified targets above used 30 units per day of three products to get to $10K/month in income. You only need 19 units per day of three products to achieve the goal. Our example took 15 months.

You could get to the income target faster if you invest more time, invest more money, or take a higher percentage of profits out as income (not recommended, but it’s up to you). Considering these factors, a reasonable range to get to this target is 12-18 months.

This might seem fast to you or it might seem painfully slow. Business and wealth-building are best represented by exponential growth curves. This is the “hockey stick” growth chart you might have seen that starts of flat and shoots up vertically. Up to a certain point, this is what you should expect in business. You can spend 6 months at $0 in sales if you take a long time to get your first product live. Then, you start marketing, adding products, and learning quickly. Your business takes off.

It may take 12-18 months to get to $10,000 per month. But it might only take another six months to double that. It might take only an additional six months to double that again. You shouldn’t expect this to continue indefinitely. However, in the first few years of a new business, this sort of growth is possible because you’re starting from zero.

Regardless of your income target, the path is the same. You need to sell high-quality products, provide good customer service, keep learning, and invest time to grow your business. Whether it takes you one year or three to get to your goal, the journey is worth it. There’s nothing like being in 100% control of your income and being able to grow a business from anywhere in the world on your own time.

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