In my last few posts I have talked about self-publishing low content books on the Amazon KDP platform.
And while it’s a really great way to make money on Amazon, in my opinion. In fact, self-publishing is one of my favourite ways to make money online but self-publishing isn’t for everyone.
Or maybe you are looking to diversify your income and build multiple income streams, which is definitely something you should be doing or thinking about doing.
So, today I want to talk about all the ways that you can build a business around the Amazon platform.
Let’s start with a couple of stats, because I love statistics.
Amazon is America’s number one online marketplace – each month they receive 197 million visitors looking at their site.
I read some really fascinating stats from a blog article on a website called Big Commerce. Head to their site if you want to go and read all of it but here are some quick facts.
- 9 out of 10 consumers price check a product on Amazon.
- Amazon sells more than 12 million products.
- 95 million people have Amazon Prime memberships in the US.
- $1,400 is the average spent by Amazon Prime members each year. (So you do the math – 95 million times $1,400!!)
- FBA gives sellers a 30-50% increase in sales.
- Amazon shipped over 5 billion items worldwide in 2017.
- More than 50% of all Amazon sales come from third-party sellers.
- 80% of sellers also sell on other platforms outside of Amazon.
There are some really great reasons to partner with Amazon and some no so great reasons.
PROS:
You get access to Amazon’s massive customer base. You get the chance to get your product in front of those 197 million people who visit their site each month. There is nowhere else that you get the opportunity to that kind of exposure.
You don’t need to have your own website or online store. Creating your own website or online store can be a pricey and/or lengthy process which can delay getting your business off the ground. You also have to deal with any of the technical difficulties or downtime that comes with having your own website.
You can get started immediately and without any or much money. There are businesses that you can start with Amazon that need absolutely zero investment upfront and there are some which need some money to get started. How much will all depend on which business you choose to start.
CONS:
You have no control over the platform, what it looks like, how it operates etc. If you want to sell on Amazon, you’ll need to give up control of how Amazon runs their website and business. They will and always will do what’s best for THEM.
Although unlikely, Amazon could shut down and disappear tomorrow along with any income you make. If you build your business on Amazon, you have the risk that something could happen to Amazon to cause it to close down. Or they could decide they don’t want third party people on their site anymore. There are a hundred things that could change which would severely affect your business and the income you make.
You’ll make smaller profits per product. Whatever you decide to do on Amazon, they take a multitude of fees for allowing you to do so, which means your profit is a lot smaller than what you could make if you were running your business through your own online store.
Although, is your website receiving 167 million visits per month??? These are the things you have to weigh up.
So, with all that being said, let’s look at the different ways you can make money online with Amazon.
Just as a sidenote, these are not all of the ways to make money online with Amazon. These are probably the most popular and lucrative for the majority of us, so I chose what I think are the top 5 ways best ways to make money on Amazon.
SELF-PUBLISHING
If you haven’t seen my last couple of posts, self-publishing is a fantastic way to have a business on Amazon. Amazon is known for its book market and you don’t have to be a writer or author to publish books.
Of course, if you do write that’s great and you can publish paperback and kindle books. Or you can hire a ghostwriter to write your books. Also you can publish low content books such as notebooks, journals, log books and coloring books.
I have seen income reports of people making a few hundred dollars a month to tens of thousands of dollars a month with self-publishing.
I recently posted an article where I talk about my first month self-publishing low content books. Check that one out if you’re interested in seeing what I made.
AFFILIATE INCOME WITH AMAZON ASSOCIATES
You can make money by promoting ALL of the products available for sale on the Amazon website. You can do this by promoting products on your website or blog, through your YouTube channel, to your email list or on your social media accounts for example.
You can earn anything from 1-10% in commissions, depending on the product’s category, by promoting the products for sale on Amazon and getting people to buy them.
Quite often on blogs and within blog posts or on YouTube channels you’ll see people link to Amazon products. These are affiliate links.
Commissions can be quite low if you compare to other affiliate programs but again, you have to consider how trusted Amazon is and how likely it is that someone will order through Amazon over other retailers.
Also, you make commission on anything the customer buys during your cookie window not just the product you promote so if someone clicks your affiliate link then remembers they also needed to buy this week’s groceries, plus all those Christmas presents for their family and friends, you get commission on all of it.
Something else that Amazon does which I don’t often hear people talking about is getting Bounties. Now these are also just affiliate commissions as well, but they are a fixed commission not a percentage and it’s on their subscription services.
You receive a bounty if you refer someone who signs up for the Amazon Baby Registry or you get a bounty if you refer someone who signs up for an Audible Subscription or an Amazon Prime Trial.
MERCH BY AMAZON
Merch by Amazon is their print on demand service for things like t-shirts.
You create designs, or have designs made that you want printed on products and upload them to Merch by Amazon and they become available for sale to Amazon’s customers.
And just like any other print on demand service, they only print your product and charge you for it after you have made a sale.
A great business model for you if you don’t want to invest any money upfront.
I also think this is a really great option for those of you who already have a print on demand business elsewhere and already have designs created and you just want to make a bit of extra income by leveraging a different platform’s customer base.
You already have the designs there so you can just upload them to Amazon without a whole lot of extra work or effort.
RETAIL ARBITRAGE
Retail arbitrage can be a fun way to make money on Amazon especially if you really enjoy the research and sourcing products phases of business.
Arbitrage is the purchase and sale of an asset in order to profit from the difference in the asset’s price between markets.
What the heck does that mean?
Basically, you find a product cheaper somewhere else, then sell it on Amazon at a profit. Not in a wholesale sense. This is buying from one retailer and selling on another retail platform. Yes, you can actually do this! It is by no means a passive income business. You will have to invest a lot of time to researching products, pricing and competitors.
You’ll also need to familiarise yourself with all of Amazon’s selling fees to make sure you don’t lose all your profit to fees because you will need to make quick, snap decisions on what you want to purchase.
But in a nutshell, here’s how it works.
You’re doing product research on Walmart.com or Ebay or Target.com. They have a product on sale. You go over to Amazon and look this product up and see how much it’s selling for. You can see that other sellers are selling this for quite a significant amount more on Amazon.
Now here’s the thing, you don’t even have to purchase the item from Walmart or whoever yet. You list the product on Amazon through your seller central account and if someone purchases it from you, you head back to Walmart and buy the item and send it directly to the customer.
This can be a very risky way to do arbitrage though because stock levels and prices can change. But if you’re someone who lives outside of the USA, it’s a way that you can do arbitrage on the US Amazon store.
You can also go out to a physical store and purchase products up front to list on Amazon for sale. This just means you’ll have to take care of the storing of inventory and the packing and shipping of the product too.
It sounds simple in theory but it does take a lot of practice and time to get your head around how to find the right products at the right prices so you can make a profit. And it’s a very quick moving business model.
SELLING YOUR OWN PRIVATE LABEL PRODUCTS VIA FBA/FBM
As I mentioned at the beginning of this post, one of the stats I liked was that 50% of products on Amazon are sold by third party sellers.
Selling your own products on Amazon (which is known as private labelling – you create your own brand of products) is great if you want to take advantage of Amazon’s huge customer base and don’t want to have to set up your own online store. Or you want to sell on Amazon in addition to your own website.
And there are two ways you can go about this.
You might have heard these terms thrown around – FBA and FBM. You’ll most commonly hear people talk about FBA.
These are Fulfilment by Amazon and Fulfilment by Merchant.
You can sell your products that are fulfilled by Amazon and this means you send your inventory to Amazon and they store it in their warehouse and when you make a sale, they pick it, pack it and ship it.
This business method is perfect if you love the research phase of business and like sourcing and picking products to sell but you don’t really enjoy or want to deal with the customer side of things. Like packing the product up and taking them down to the post office every day. Or perhaps you don’t have the space to store all your inventory, FBA could help you out in that respect too.
The other way to sell products through Amazon is list them for sale on their website but when you make a sale, you pack and ship the product to your customer.
This is a good option for you if you are not able to give up control of what your packaging and shipping materials look like. Or say you might want to include something inside your packages, such as inserts or other marketing and promotional materials that Amazon won’t put in, if they were shipping it.
I had some experience with Amazon FBA back in 2014 and 2015 and a very short version of how it worked for someone based outside of the US was this:
I contacted a warehouse in China and purchased bulk product from them. I paid them a couple of thousand dollars for that first initial order and then put A LOT of trust in them, as the deal was that they would send the product directly to Amazon warehouses in the US for me.
Luckily, I had chosen a good supplier and they did everything that I asked of them but the reason I didn’t continue with this business model is because personally I didn’t like the outlay of cash upfront on my end.
I prefer to make the money first then pay out anyone who needs to be paid out their fees.
Lastly, other ways to make money on Amazon, which I don’t know enough to talk about are:
AMAZON ACCELERATOR – For manufacturers to supply Amazon branded products.
AMAZON INFLUENCER – For if you have substantial social media following.
AMAZON FLEX – Delivery driving for Amazon.
AMAZON REPRESENTATIVES – Work from home, employed by Amazon.
MECHANICAL TURK – A crowdsourcing marketplace.
AMAZON HANDMADE – For handmade products, I’m guessing similar to Etsy.
AMAZON TRADE-IN – Trade in your used products for gift cards.
AMAZON SERVICES – If you’re a plumber, piano teacher or gardener, this is for you.
CAMPERFORCE – Get seasonal work in Amazon warehouses as you travel around the country in your RV.
