How To Make Money On Amazon

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Amazon’s revenue for the 3rd quarter of 2020 was over 96 billion dollars


This is a significant amount of money


However, what might surprise you is that over 55% of that revenue was generated by 3rd party sellers on the platform. 


This means that the majority of items being sold on Amazon are sold by small and medium-sized businesses. 


Amazon is a place where everyday people have an opportunity to cultivate and grow their businesses


Right now, Amazon is actually made up of a majority of these smaller businesses run by people just like you.


If there’s one conclusion you can draw from this information, it's that its very possible for anyone with some drive and creativity to carve out a piece of Amazon revenue for themselves. 


In fact, there are multiple ways that you can go about starting a business on Amazon, and we’re going to explore several of them.

1. Private label

A private label Amazon seller is a person that creates their own product brand and sells it on the platform. 


You might be thinking that you would need to create a new product from scratch, which simply isn’t the case (although no one is stopping you from doing that either). 


Private label sellers get started by finding a type of product that is already selling well, then finding ways of “making it their own” by putting their own brand on it as well as potentially some new design features or improved functionality. 


In a nutshell, this is the process that a private label seller goes through in order to get started:

1.1. Step 1 — Product research

Arguably, this is the most important step


Product research is when you scour through Amazon looking for products that are selling well, but their niche is also open to another competitor entering the scene and finding success. 


There are a number of factors that you should consider in your research, such as the size and the weight of the product, the sales volume, the selling price, and the fees. 


Product research is a science of its own. 


This is why there are a number of highly advanced product research software available, such as the AMZScout Pro Extension:

AMZScout Pro Extension

AMZScout Pro Extension

This is the type of tool that you can use on any Amazon page, or after doing any search. 


With this tool, you'll have access to all of the available information about products on the page that's normally hidden beneath the surface.

1.2. Step 2 — Finding a supplier

Once you determine the type of product that you want to sell, it’s time to contact some potential suppliers and gather information. 


It’s essential to determine what would be the price per unit and the various prices for different order quantities. 


You should also make sure that you locate a supplier that's able to make the modifications you require for your product.

1.3. Step 3 — Calculating your margins

When you receive the necessary information from the potential supplier, you should have all of the necessary information available in order to calculate how much profit you could make per unit sold of your product. 


For this, you can use an app such as the AMZScout FBA fee calculator — a helpful tool for profit calculation:

Amazon fees

The app automatically knows the Amazon fees for any product, so all you have to do is input the manufacturing price your supplier provides to you.

1.4. Step 4 — Order a prototype

If you're happy with the projected margins, and you've found a supplier that can create the product you need at a price that gives you a satisfying margin, it’s time to order a prototype


Once you receive it, you should test it for quality as well as use the opportunity to take product photos.

1.5. Step 5 — Create an Amazon seller account

Before you can process your first order, you'll need to have a seller account to create a shipping plan for your first batch of items. 


This process is pretty straightforward. 


All you need is a valid bank account and some personal information.

1.6. Step 6- Order your first batch

With everything in place, you can place an order with your supplier. 


Then, you can create a shipping plan in seller central that will provide you with labels to paste on your products and your shipment to make sure that it arrives at the proper FBA warehouse.

1.7. Step 7 — Create your product listing

As you're waiting for your batch to arrive, you can optimize your Amazon product listing


This includes tasks like writing your listing copy, as well as adding and editing your product photos. 


The listing won’t become active until the items from your batch start loading into the FBA warehouse.

1.8. Step 8 — Sell

With your listing optimized and your first batch in stock, you can start selling your products. 


As soon as your inventory becomes available, Amazon shoppers will be able to make purchases


After that point, it’s up to you to help them to find your listing and to get it to grow and show up in more and more Amazon searches.

2. Retail Arbitrage

Retail arbitrage is a business model that also depends on selling products on Amazon.


However, it’s vastly different from the private label model. 


With private label, you can basically run your whole business from your computer, never having to hold any inventory. 


With retail arbitrage, it’s pretty much the opposite.


The way retail arbitrage sellers make their money is by finding items in clearance aisles, at special offers, and at discounts in brick-and-mortar stores. 


Then they sell those items on Amazon, making a profit on the price difference. 


It’s a very dynamic and hands-on way of doing things, and it requires a lot of adaptation and an opportunist approach. 


It’s also a business model that requires very little money to start with, and according to sellers that make their money this way, it’s a lot of fun.

3. Merch by Amazon

Merch by Amazon is as hands-off as you can get. 


Using this model, you don’t even have the option of holding your inventory since there isn’t any. 


The way Merch by Amazon works is that you sign up for the program and then you design sayings or images that can be printed on t-shirts. 


However, you don’t have to get any t-shirts made yourself. 


You simply post a design, and once a person decides to buy it, Amazon will actually print the t-shirt and send it to them.


This is a great business model for those people that have some artistic talent and creativity that requires virtually no investment on their part. 


Also, there's no such thing as calculating fees or talking to suppliers. 


You can just focus on having good design ideas. 


The best part is that there's no limit to how many designs you can have for sale!

4. Amazon associates program

This program was formerly known as the Amazon affiliates program, and it’s one of the ways where you can make money on Amazon without actually selling anything yourself. 


This program is meant for people that have some sort of an online presence through their own websites, blogs, or social media platforms.


Once you sign up and get verified for the program, you can post links to any Amazon product on your platform, and you'll receive a small percentage of any sales that happen through people using the link that you posted. 


In fact, the percentage you receive will not only be for the product you linked to, it will count anything a person buys in the following 24 hours after entering Amazon using your link. 


This is a great source of additional income for anyone that’s an influencer. 


Of course, the bigger your audience, the more money you will end up making.

5. Amazon Flex

Amazon Flex is another way of making money on Amazon that doesn’t require you to sell anything. 


However, it's very much hands-on. 


This is actually a service where you can sign up to be a delivery driver for Amazon using your own vehicle. 


This is a great way for people to earn some additional income without having to necessarily commit to building a business


It’s basically to delivery truck drivers what uber is to taxis. 


You can do as many deliveries as you feel comfortable doing, and you can even schedule them in advance.


In conclusion, Amazon is first and foremost an eCommerce platform. 


However, that platform has formed an ever-expanding ecosystem ripe with opportunities for people to participate in and make an earning for themselves. 


Of course, the most prominent and profitable thing to do is to sell items on the Amazon platform. 


However, the other programs that Amazon has added recently are bound to grow in scale, as well as profit potential.

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