How Much Money does Amazon Make a Year? 2020 Edition

30 Jun, 2020

According to CNN , in 2019 Amazon enjoyed reported total revenue at in excess of $232 billion. In excess of $10 billion was pure net income. 

Use IO Scout FBA calculator to calculate product revenue and Amazon selling fees . IO Scout tools will help you to grow your business!

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How Much Does Amazon Earn in a Single Day?

We hope you’re sitting down, because these figures are pretty mind-blowing.

$638 million (give or take) a day, equates to $26 million (or thereabouts) every single hour of the day, and $4.5 billion every single week. Wow. Serious figures right there. 

Bear in mind that the fees charged to Amazon sellers below are just a drop in the ocean compared to the amount Amazon makes from all sorts of different avenues:

Amazon Referral Fees   

The referral fees is made up by 6-20% of the item’s value, and is category dependent

Amazon Minimum Referral Fees

$0-2 payable on certain categories 

Amazon Variable Closing Fees 

Variable closing fees are media dependent, and vary from $1.35-$1.80

Amazon Selling Fees 

Fees payable monthly ($40) for the Professional selling account or per product ($0.99) for the Individual selling account

The expenses you will encounter is dependent on if you are on Amazon Individual or Professional selling plans .

If you are an Individual seller, there is no requirement to shell out for a subscription fee on a monthly basis. You will however be charged $0.99 every time you sell a single item. You will also be subject to variable closing fees from Amazon, and these vary from around $0.45 - $1.35 at this current time. The Individual plan is based on sellers selling 35 products or less on a monthly basis. 

If you are a Professional seller, the requirement is that you pay a monthly subscription fee of $39.99, as well as referral fees, and variable closing fees as above. You have more benefits available to you as a Professional seller than the Individual plan, but at the end of the day, the plan availability is down to how much you are selling through Amazon.

Amazon Shipping Fees  

Unless you are a FBA seller , shipping fees are the sole responsibility of the Amazon seller.

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Amazon Monthly Inventory Storage Fees

Inventory fees are dependent on the time of year your inventory products need to be stored

Let’s look into more detail at the lucrative FBA (Fulfillment by Amazon) service that many Amazon sellers take advantage of.

Amazon FBA Fees 

Retailing through Amazon’s FBA course necessitates the ensuing costs:

FBA Fees

Amazon FBA fees are dependent on two things – how heavy your products are, and what size they are. This charge is sustained in place of your own freight, administration, and packing expenses.

FBA Storage Fees

Your goods are warehoused in Amazon’s Fulfillment Centres, and FBA Storage Fees are the expenses incurred due to this storage. Monthly and long-term warehousing are options open to FBA sellers. 

Monthly Amazon FBA Fee

Professional seller charges – those entrepreneurs and businesses who are receiving more than 40 orders a month via Amazon. 

How does Amazon make money?

The list seems endless. But these are just a few of the routes Amazon takes to make money:

  • Retail – through Amazon.com and Amazon Marketplace. And these routes are applicable for all those fees mentioned above, amongst others.
  • Advertising – Amazon PPC ad campaigns are growing at a rapid rate of growth. According to a recent study , Amazon enjoyed a doubling in revenue from advertising in 2017-2018. And it’s set to grow even faster.
  • Subscriptions – Videos, Music and Prime memberships
  • Ring – Smart Home Security System
  • Web Services – Cloud Computing Services
  • Third-party seller profits

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Amazon: The Money-Making Machine FAQs

How many years did it take for Amazon to turn a profit?

Fourteen years. 

How much money does the owner of Amazon make in a single second?

Reportedly, Jeff Bezos earns in excess of $2,400 every second of every day. 

How did Amazon start as a business?

In 1994 as a seller of books online. Times have changed just a bit since then!

What percentage of product sales come from third-party sellers?

Approximately 58% of product sales come from third-party sellers, a stark contrast to 3% back in the beginning. 

How much money do typical Amazon vendors make?

This is an interesting one. 49% of Amazon vendors make under $100k, 36% of Amazon vendors make $100k-$1m, 13% make between $1m-$10m, and only 2% of Amazon vendors enjoy more than $10m!

Which products sell the best from third-party sellers?

Home and Kitchen 18%

Toys and Games 11%

Books 9%

Health 8%

Beauty 8%

Electronics 7%

Clothing 7%

Sports and Outdoors 6%

How many visits are made to US Amazon every day?

Reportedly, there are over 2.7 billion every day on USA’s Amazon Marketplace.

Further Reading on how much money Amazon earn

There’s a wealth of information available on this hot topic. Here’s a list of relevant resources you may find useful and informative:

SellBrite: https://www.sellbrite.com/blog/how-does-amazon-make-money/

RePricer Express: https://www.repricerexpress.com/amazon-statistics/