The short version: you can make money selling on Amazon, but only if you treat it as a fee-heavy, advertising-dependent business from day one, not a side hustle you set and forget. Most new sellers lose money for the first three to six months because they price for the product cost and forget the referral fee, the FBA fee, storage, and the PPC spend needed to rank. Do the maths before you order stock, not after.
What people get wrong before they’ve sold a single item
Everyone starts with the product. I sell in Kent, I like ceramics, let’s do mugs. Wrong starting point. The starting point is the fee structure, because that decides whether the product can ever be profitable, and most people work this out after they’ve already paid for 500 units.
Amazon takes a cut at every stage. Here’s what leaves your pocket before you see profit on a typical FBA product priced at £19.99:
- Referral fee: 8% to 17% depending on category, most non-media categories sit around 15%. That’s £3.00 on this item.
- FBA fulfilment fee: for a small standard parcel this is roughly £4.19 in the UK, more for anything oversized or heavy.
- Storage fee: around £0.65 per cubic foot from January to September, jumping to £1.60 per cubic foot from October to December, when everyone’s stock is sitting in Amazon’s warehouses for Christmas.
- Professional selling plan: £25 a month plus VAT, before you’ve sold anything.
- PPC advertising: to rank against established listings, most new sellers spend 15% to 30% of revenue on ads for the first several months, sometimes longer.
Add that up on our £19.99 item and Amazon’s fees alone come to around £7.34. Add product cost of £4.50 and PPC spend at a modest 25% ACoS (£5.00), and you’re left with £3.15 profit per unit, about 16% margin, and that’s before returns, VAT, or your own time.
A real example: the candle seller who nearly quit at month four
A client of mine, a soap and candle maker working from her garage in Tunbridge Wells, launched her first FBA listing in early 2023. Her candles cost £4.20 to produce and pack. She priced them at £18.99, did the fee maths roughly, and expected to clear about £6 a unit.
What she hadn’t accounted for was ranking. Her listing sat on page four for the first eight weeks because nobody searches for a brand nobody has heard of. To get onto page one she had to run PPC hard, and her ACoS in month one was 68%, meaning she spent 68p in ads for every £1 of sales. She was losing roughly £2 a unit while her stock moved and her reviews built up. By month four, with 40 reviews and a Best Seller badge in a sub-category, her ACoS dropped to 18% and she finally turned a real profit, around £4.80 a unit at that point. She’d nearly given up at month three because the bank balance looked terrible, and that’s the bit nobody tells new sellers: the ranking period is a paid investment, not a bonus phase, and you need enough cash to survive it before you start.
The uncomfortable bit most guides skip over
Selling on Amazon in 2026 isn’t retail with a warehouse, it’s paid advertising with a warehouse attached. Amazon’s own search algorithm rewards sales velocity and reviews, both of which you now largely have to buy through ads, because organic discovery for a brand new listing is close to zero. So you’re paying Amazon a referral fee to sell the item, a fulfilment fee to ship it, and then paying Amazon again through PPC just to be seen by the customer who was already searching for your exact product. That’s three separate charges on one sale, and it’s why so many sellers who look busy on paper are barely breaking even.
The other truth people avoid saying plainly: Amazon competes with you. If your product does well, there’s a real chance Amazon’s own private label arm, or a bigger seller with deeper pockets, copies the concept and undercuts you on price within a year. This happened across categories from phone cases to kitchen storage. You’re not just competing with other small sellers, you’re renting shelf space from a landlord who can also become your competitor.
Step by step: setting up a listing that has a real shot at profit
- Register as a professional seller (£25/month plus VAT) rather than individual, because you’ll need it once you’re past 35 sales a month and it unlocks advertising tools.
- Run the margin test before ordering stock. A rough rule that works: your landed product cost (manufacturing plus shipping to the UK) should be no more than a third of your intended retail price. If it’s more than that, the fees and ad spend will eat your margin alive.
- Choose FBA or FBM. FBA (Fulfilled by Amazon) gets you Prime eligibility and better ranking, but costs more in fees and storage. FBM (Fulfilled by Merchant) means you ship it yourself, lower fees, but you lose the Prime badge and most buyers filter for Prime only. For most new sellers wanting real volume, FBA wins despite the cost.
- Do keyword research before writing the listing, not after. Tools like Helium 10 or Jungle Scout show real search volume; guessing keywords is the single most common reason listings never rank.
- Launch with a PPC budget you can afford to lose for 8 to 12 weeks. Set a daily cap, start with automatic campaigns to see which search terms convert, then move budget into manual campaigns targeting those exact terms.
- Track your true unit profit weekly, not monthly. Fees, ACoS, and storage costs shift, and a product that was profitable in June can quietly stop being profitable by October once storage fees jump for the Christmas period.
- Reorder before you run out, but not so early you’re paying long-term storage fees on stock sitting unsold. Amazon charges extra for inventory that’s been in a warehouse over a year, on top of everything else.
What tends to sell (and what quietly loses money)
Products that do well for small sellers usually share three things: they’re light and small (lower FBA fees), they solve one specific problem well, and they’re hard for a factory in Shenzhen to replicate exactly in a week. Niche pet accessories, specific kitchen tools, craft supplies, and well-branded personal care items tend to do better than generic gadgets.
What quietly loses money: anything trend-driven that you order 1,000 units of based on a TikTok spike, anything heavy or bulky (storage and fulfilment fees punish size before profit), and anything in a category dominated by huge established brands where you’ll never win the ad auction without a marketing budget you don’t have. I’ve seen sellers sink £15,000 into a product that looked brilliant on a spreadsheet and never cleared page two because three established competitors outbid them on every relevant keyword.
When Amazon isn’t the right move
If you don’t have at least three to six months of cash to survive the ranking period, don’t start yet. If your margin after fees is under 20%, walk away, because ad spend or a return spike will wipe it out. And if you’re doing this to build a brand people search for by name rather than sell on Amazon, you may be better off building your own site and driving traffic there instead, where you keep more of every sale and own the customer relationship. There are plenty of other routes into online income worth weighing up first, from 51+ real ways to make money online to more hands-off options in making extra money without leaving home, and Amazon should be one option you compare against those, not the default because everyone talks about it.
If you’re weighing Amazon against building a content business instead, it’s worth looking at the real numbers behind blogging too. It’s a slower build but the fee structure is completely different, and worth comparing honestly rather than assuming Amazon is the faster win, which it often isn’t once ad costs are factored in. There’s a full breakdown of business models to compare in 51 business ideas to make money online if Amazon starts to feel like the wrong fit for your situation.
Frequently asked questions
How much money do you need to start selling on Amazon?
Budget for at least £3,000 to £5,000 to cover your first stock order, the £25 monthly professional account, and three to six months of PPC spend while you rank. Sellers who launch with less than that often run out of cash before their listing has enough reviews to sell organically.
Is Amazon FBA still profitable in 2026?
Yes, but margins have tightened compared to five or ten years ago because referral fees, storage fees, and PPC costs have all risen while competition has grown. A realistic profitable margin for a new product is 15% to 25% after all fees, not the 40%+ that used to be common in less crowded categories.
How long does it take to make money selling on Amazon?
Most sellers spend two to four months in a break-even or loss-making ranking phase before ad costs drop enough to see real profit. Products with strong reviews and repeat demand can become profitable by month six, but treating month one as your profit month is where most new sellers go wrong.
Can you sell on Amazon without holding your own stock?
Yes, through Fulfilled by Amazon, where you send stock to Amazon’s warehouses and they handle storage, packing, and shipping, or through retail arbitrage and dropshipping models, though Amazon’s rules on dropshipping are strict and many accounts get suspended for breaching them. FBA is the more reliable route for a sustainable business.
Related reading: 5 Reasons to Sell Products on Amazon in 2020 and How to Choose What to Sell on Amazon in 2020.
For the bigger picture, see my full guide to side hustles.
