Timotheus Update: This post was originally published on 7 February 2020 on my previous website – Passive Online Revenue. Due to rebranding and consolidation of the two sites, the post is now on this website and published on 16 December 2022.
How to Make Money from Amazon?
Introduction
In 2018, Amazon announced that they made $232.9 billion in revenue! Can you imagine having a small piece of that pie? Even at 0.01%, it is $23,290,000! With that kind of money making opportunity, you should really learn How to Make Money from Amazon?
Years ago, I knew I was attracted to this potential business to earn millions. So, I searched for teachers, attended lessons, actively participated in workshops, and even tried a few ways to make money from Amazon.
Today, in this article, I save you time, and share all that I have learned and experienced. I will also give my view on whether this is a good choice for making money online. Plus, after years of experience, I found the best way to make money on the Internet. And I share it here with you.
Would you like to learn how to start and grow an affiliate marketing business? Join my I Love Passive Income community for more tips and useful business information. Simply fill in the details below, and you will receive an email with instructions on how to join this invaluable community.
What is Amazon?
Back in 1994, I was working at a web development company. And there was buzz about a new and small website where people can sell books. That was Amazon.
Today, Amazon is a marketplace where sellers can offer myriad products for sale.
In addition, the conglomerate owns Zappos, IMDB, Audible, Goodreads, and Twitch.tv, plus many other businesses.
They even produce TV shows and movies. One of my favorite science fiction shows, The Expanse, is produced by Amazon.
How to Make Money Publishing eBooks on Amazon?
I have been playing with the idea of writing a book, and self-publishing. On Amazon, this is one of the ways to make money.
If you have a topic that you are passionate about, you can write about it.
Then go to Amazon, self-publish it. You can offer it in an eBook format.
When consumers want a print copy, there is Amazon’s CreateSpace that can do that for you.
Every book that you sell on Amazon, they will take a cut. It can be anywhere from 35% to 70%. And it is not so simple as write and publish. Just like any brand, you have to promote your book. And that may cost you a lot of money.
In the past, writing and publishing books was lucrative. But today, with so much competition, it is not easy. Not impossible. But harder.
On the plus side, you do not have to worry about inventory.
Nevertheless, I still plan to do this. I have so many ideas for books. Plus I am a writer, too. But because it is harder to make money, and it make time a longer time to see profits, I intend to do this later.
What Does It Mean To Be A Seller on Amazon?
With my dreams to be an author shelved for the moment, I looked around to see how else I can use Amazon to make money? I am sure you have seen products listed on Amazon. These are listings created by sellers.
As I looked at the listings and products, I realized that I could be a seller, too. But I had no idea what to do and how to do it. I could learn online from Amazon, YouTube or online learning platforms like Udemy. But I decided to search local for a good teacher.
After some time, I found one who had and is still having success on Amazon. He was willing to impart his knowledge. After I attended his review session, I signed up and attended a few of his courses and workshops.
The first thing I learned was how to setup my Amazon account. Then I needed to find a product to list and sell on Amazon. This part was not easy. There are so many products on Amazon.
The teacher was very good. He helped his students to find a good product. In fact, he would take a look at our choices, and advise which would be the best product to sell.
After that, I had to source for a supplier for that product. This part was not easy too. It was almost a gamble. I had to find a good and reliable supplier. One that would supply the product in good condition and quality. A photo does not tell or assure how good the quality a product can be.
After I found a supplier, I had to consider many more aspects of my eCommerce venture. There was inventory; do I buy and keep stocks or do I do drop shipping? Do I create a private label, and how do I do it? Do I manage the shipping and fulfillment or do I get Amazon’s help with FBA (Fulfillment by Amazon)?
So many choices to make. I explain all the choices further in this article. For now, let me explain more about being a seller on Amazon.
Once I have the product, supplier and logistics worked out, I am now ready to list the product on Amazon. Once listed, the product is on Amazon, and offered to any consumer.
The good news is Amazon gets over 2 billion visitors per day. That is a lot of potential customers. But your product have to stand out. And one way is to promote it to attract people to look at your product, and buy from you.
One thing you must be very careful about is to calculate your costs carefully. Make sure you add every cost into your accounting. Also, calculate how much you have to sell in order to make a decent profit.
Be mindful of your competitors. High competition can slow down sales. When the competition offers a lower price, this can bring your eCommerce dreams to a grinding halt.
What is Private Label?
From the Amazon course, I learned about private label brands. To create my private label brand, I have to decide on a product that I would like to sell. Then source for a supplier or manufacturer for that product.
I created a brand with brand name and logo. Then I had the manufacturer add my logo to the product. This was my private label and I sold the product on Amazon as part of my branded products.
Usually, the easiest route is to find pre-existing items. It would be too much effort to design a product, and get the manufacturer to create it for you. That would be costly. I do not recommend this unless you really have a new and unique product that is not in the market.
With a pre-existing item, there is also the concern that there will be many other products by other private label brands looking the same as yours. This is why it would be better if you can change the product a little to give it a unique selling point.
For example, if you are selling a particular design of a dog collar, and you see comments that ask for a specific color of that collar. For example, there is no rainbow colored dog collar for that design. Then you can work with the manufacturer to create the rainbow color version, and your product will have that difference.
What is Retail Arbitrage?
Another way to find products to sell on Amazon is to do retail arbitrage. It is a very simple concept. The idea is to buy a product from a retail outlet at a very low price, and sell it at a higher price on Amazon.
For example, you can check out the local hypermart such as Walmart. Especially look at the items that are on sale or clearance. Check on Amazon if there are these products on sale there. And what is the average selling price there.
If the buying price plus shipping is low, and you can make a decent profit, then that item is a good choice. There are apps that can help you compare prices easily. You just scan the item with the app, and it will show you how much it is being sold on Amazon.
This method of making money on Amazon takes up a lot of time and effort. You need to shop and search. You have to be careful and make sure the price is lower than the average selling price on Amazon. But I have known many people doing this and doing well. Some even make millions a year.
The plus side of retail arbitrage is that you do not have to deal with suppliers or manufacturers, shipping parties, and warehousing costs.
What is FBA (Fulfillment By Amazon)?
Fulfillment by Amazon or FBA is a service by Amazon. You can store your products at an Amazon warehouse. Then when a customer buys your product from Amazon, they will fulfill the order.
When you choose to use this service, Amazon will detect any sale of your product. Upon a sales order, they will get the product from their warehouse, package and label it, and bring it to your customer’s door step.
Here is a video about FBA:
I am someone who does not enjoy the fulfillment part of eCommerce. I was so happy for FBA. For my eCommerce business, I combined this with private labeling. After I had my manufacturer create my private label products, I had them shipped to Amazon.
Then I listed my product, promoted it. Any time I had a sales order, Amazon would handle the rest. I found this to be very time saving. Additional time that I used for other business efforts.
Note: Amazon charges a fee for this service. So, in order to make enough profits, you need to sell high volume.
What is An Amazon Affiliate?
I have said this many times and to many people – Affiliate marketing is one of the best ways to truly create passive income. And I still stand by this. As such, it is most fortunate that there is Amazon Affiliate program.
You apply to become an affiliate of Amazon. You get affiliate links for the different products on the marketplace. Then you use the links and promote the product. When people click on the affiliate link and make a purchase, you get a commission.
To promote the product, you can have a website and blog about it. Or you can share the link on social media such as Instagram, Facebook, Twitter, YouTube or Pinterest.
Awesome, isn’t it? I wrote about how to make money with affiliate marketing.
The amount of commission you get depends on the product. It can be 1% to 10%. Also, you can get higher commission when you generate more clicks and purchases.
I truly recommend doing affiliate programs. If you like to learn how to do affiliate marketing the right way, click on the button below.
You Get My Bonus!
When you join the above program, I will be your mentor. I will guide you and help you do affiliate marketing successfully, and make money.
What is Mechanical Turk?
This is a marketplace where you can make money online doing easy tasks. The reason people get these jobs is because they will do work that computers cannot do. Amazon calls this – Human Intelligence Task.
Examples of these tasks are transcription, image recognition, data entry, etc. A research paper reported by The Atlantic claimed that the median hourly wage you can earn is about $2 an hour.
That is not a lot of money to be made. But given that the tasks are easy, it could be worthwhile if you have time to kill. You can spend that time for a bit of extra pocket money.
Personally, I have not tried this. And I don’t think I will. I love passive income. And as I mentioned above, I prefer doing affiliate marketing that creates that.
What is Amazon Handmade?
Have you ever heard of Etsy? Well, Amazon has a service that is the direct competitor of that platform.
Similar to Etsy, it is a marketplace for people who create handmade products. They sell stuff like jewelry, handicrafts, paintings, etc on Amazon Handmade.
So if you are creative and love making handmade products, this can be an option for you. But do note that Amazon charges higher fees than Etsy.
While Etsy charges a 5% commission for each sale, Amazon charges a hefty 15%. To list an item on Etsy, you pay 20 cents. On Amazon it is $1.
Despite the higher costs, the advantage to Amazon is that they have a bigger audience. As such, you can sell more of your products. In the end, volume is how you can enjoy a profit. The question is – when you have volume, can you produce the product to keep up with the orders?
Again, another of Amazon money making options that I will not choose. I am not good at handicrafts. Trust me, I have tried. And the time and effort I take to make just one bracelet with small crystal beads does not justify the profits.
What is Amazon Merch?
Are you creative? Do you love designing and art? Then Merch by Amazon may be one of the ways you can make money online.
It is an on-demand t-shirt printing service. You create t-shirt designs and list them for free. That’s right. Absolutely free!
There are no upfront costs. When a consumer chooses your design, and orders a t-shirt, you get paid royalties.
Note: Sadly, Merch by Amazon is by invitation only.
But that may change in time. I will monitor the situation. As soon as it is open for all, I will share more about this in a blog post. So, do join my I Love Passive Income community to receive updates.
I will also keep on researching to find out how to be invited by Amazon for this. So, do join my community (mentioned above) to stay updated.
Would you like to learn how to start and grow an affiliate marketing business? Join my I Love Passive Income community for more tips and useful business information. Simply fill in the details below, and you will receive an email with instructions on how to join this invaluable community.
How to Make Money from Amazon?
Timotheus Final Word
Amazon is an amazing platform. So many choices and chances to make money online. But ultimately, as you can see from my explanation above, I find that affiliate marketing is the best way to create passive income.
I am not saying that the other methods like private label, FBA, retail arbitrage or the few others are not good. It is just that they require more time and effort.
Also, you still need to deal with people. It could be suppliers, shippers, and customers. When dealing with people, there can be conflict. And that can cause lots of stress and headaches.
With affiliate marketing, I just write content for my websites. Add the affiliate links. And publish them. When a consumer clicks on the affiliate links and make a purchase, I enjoy a commission.
The advertiser handles the order fulfillment and any customer issues (if any). Now, isn’t that true passive income?
You can join the Free Starter Package with just your email. No credit card needed for this Free Starter Package.
There is some free training as well as really powerful tools and features to help you do digital marketing for your online business.
My #1 Recommendation
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Join the Wealthy Affiliate as a Starter member for Free! And get access to free training as well as many free features and tools (including powerful keyword tool). Plus, you get to create a website hosted on the Wealthy Affiliate server for free.
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When you join the above program, I will be your mentor. I will guide you and help you do affiliate marketing successfully, and make money.
If you have ANY questions, or anything to clarify, please drop a comment below. I will be happy to help you.
I wish everyone great wealth and success.
Timotheus
Your Online Business Coach