The idea of making $7,000 per month (approximately ¥50,000) on Amazon might sound appealing, but it's far from being an easy feat. Many new sellers flood into Amazon with dreams of quick riches, often overlooking the substantial risks and challenges involved. So, is it possible for beginners to earn money on Amazon? And how can one realistically achieve this income target?
The Numbers Behind the Dream
Let's break down the math. Assuming your goal is $7,000 in monthly net profit with products averaging 30% profit margins, after accounting for promotions, returns, and other expenses, your actual profit margin would likely be around 10-15%. Using a conservative 15% estimate, you'd need approximately $33,000 in monthly sales (about $5,000 weekly).
If your average product price is $30, this translates to 1,700 orders per month or about 55 daily orders. Distributing these sales across 3-5 main products means each product would need to sell 10-20 units daily—a theoretically achievable target with proper execution.
The Required Investment
However, achieving this requires significant upfront investment. Product costs typically account for 30% of sales, with logistics adding another 30%. These costs must be paid in advance. Additionally, Amazon takes approximately 15% in commissions (charged after sales), and marketing expenses often consume about 10% of revenue.
A rough calculation suggests you'd need at least 70% of projected sales ($35,000) as initial capital—about $24,500 when accounting for all expenses.
Inventory presents another major consideration. Contrary to popular myths about "no-inventory" models, Amazon's FBA program requires maintaining at least two months of warehouse stock. Factoring in one month for ocean shipping and another for domestic preparation, you'd need four months of inventory—equivalent to 60% of sales multiplied by four, or about $100,000 worth of goods.
Hidden Risks and Challenges
Beyond financial pressures, sellers face numerous risks. Malicious reviews, intense competition, or policy violations could lead to account suspensions, potentially wiping out your entire investment. While some sellers showcase impressive earnings, the platform's brutal reality sees many others losing money annually.
Achievable Goals for Beginners
While $7,000 monthly might be ambitious for newcomers, earning $1,400-$2,000 is certainly possible. By carefully selecting products, diligent operation, and developing 3-4 bestsellers that generate 10+ daily sales each with reasonable margins, this target becomes attainable.
The keys to success include:
- Thoroughly understanding Amazon's complex rules
- Conducting meticulous market research
- Implementing strong risk management
- Committing to long-term investment
Before entering the Amazon marketplace, sellers must honestly assess their risk tolerance and financial capacity. Blindly following trends without preparation often leads to disappointment.
Amazon represents neither a guaranteed goldmine nor an impossible challenge—it's a competitive battlefield requiring preparation, expertise, and perseverance. Only through methodical, informed approaches can sellers navigate Amazon's turbulent waters and achieve sustainable profitability.