How Do People Make Money on Amazon?

Julia Grant

August 23, 2021

Without a doubt, Amazon is one of the most successful businesses in the 21st century. The growth that they have experienced over the past decade alone is astounding. Their sales have skyrocketed since 1997, reaching almost $400 billion dollars in sales by 2020.

Because of the nature of Amazon, there are countless opportunities for individuals and third parties to profit off of Amazon’s success. We’re here to show you how. We’ve divided these opportunities into three main categories. You can choose any one of the possibilities from these categories as a way to generate income by latching onto Amazon’s platform.

SALES

As an e-commerce company ourselves, this is by far our favorite way to make money on Amazon. What you didn’t know, I’m sure, is just how many ways you can sell on Amazon. There’s a ton of opportunities!

‍

Create Your Own Private Label Business

Private Label is the model that most successful Amazon sellers use. It is user-friendly, doable from anywhere in the world, and requires no inventory. In this model, you essentially brand items purchased from a third-party supplier, keep them at an FBA warehouse, and then focus on creating optimized listings that will sell. 

This is an ideal model because you do not actually have to patent or create a new product, but simply do the research to find an existing product that sells well, and then find a white-label supplier. You can then make the product your own with quality branding, learn what it takes to get your listing on the top search page and gain success from there.

Of course – we’re a bit biased here. This is the model that we use and that we train our students to use. If you’re looking to get started in this arena, check out our Amazon FBA Academy.

Sell Handmade Items – Amazon Handmade

While most crafters are drawn to sites like Etsy, some of these platforms are over-saturated and simply don’t have the same impressive audience as Amazon handmade does.

Amazon handmade is a great option for those looking to sell handmade items – they stick out on a website largely filled with made china products. 

That being said – it is more complicated to sell handmade products on Amazon than on other platforms, and they have higher fees (15% commission per sale plus the $40 a month seller central fee). This option probably won’t pay all the bills but could provide you with some nifty extra income if you have beautiful products to offer. 

In order to sell your own handmade products on Amazon, you need to go through the usual Seller Central registration, and then apply to become an “artisan.” Amazon’s standards are high, so your product must be your creation if you want to sell this way.

All in all, this is a good option to increase your audience and generate profits with your creative talent.

‍

Use Merch by Amazon to Sell Your Designs

Amazon merch is perfect for you if you’re a gifted graphic designer but don’t feel like mass producing your own items. Here, you can sell your own apparel and customized products (like hats, pop sockets, and more) without producing or storing any of them.

Granted, you are not going to make as much money on Merch by Amazon as you would if you created your own storefront – however, it doesn’t require a penny of startup capital or hardly any work on your part. 

All you need is the ability to design something catchy and follow Amazon’s guidelines for design uploads. 

You get paid royalties for each item sold, rather than gaining all profits from a given sale. Amazon has a set price for each customizable item, and you set the sale price to give yourself the maximum royalty (ie. if a t-shirt costs $15 and you set the price for $16 – you make $1 per shirt sale. If you set the price for $20, you make $5 per shirt sale, but may make less sales). 

‍

Buy and Sell – Retail Stores

Buy and sell is a fun way to generate side income. You can do this one of two ways – by buying retail items and selling them on Amazon, or by purchasing items from other websites (like eBay) and then relisting them on Amazon retail store.

In order to make a profit this way, you need to track the prices of trending items and buy at just the right time, when they are on sale, rebated, or in low demand. You then turn around and sell them on Amazon when they are out of stock, in high demand, or the prices have gone up. 

This is not a new practice – people have been doing this on various platforms for years. The technical term for buying and selling like this is retail arbitrage (or online arbitrage). We found a helpful guide here for those interested in pursuing this option. It’s easy, but more time-consuming than some other options depending on how you go about it. It can be fun, however!

Remember when people were hoarding hand sanitizer and selling it for insane prices online during the height of the COVID pandemic? This was an extreme (and morally reprehensible, all things considered) example of retail arbitrage. While we don’t recommend taking advantage of a public health emergency for your own business profit (please – don’t do that), the model can be profitable when used for items that are not a public necessity (you know, like toys and dog dresses). 

We found a helpful guide here for those interested in pursuing the Amazon seller option. It’s easy, but more time-consuming than some other options depending on how you go about it. It can be fun, however!

Go Wholesale 

Wholesaling on Amazon puts you in the same position as retail stores. You buy brand-name items in bulk, and then sell them at a marked-up price online. While this can be effective, there is a lot of competition. Frequently you will find yourself in a price war with other wholesale sellers, forced to take a profit cut to get the sale.

Wholesaling on Amazon is different from private label selling, but the process is almost the same. The major difference is that you are not creating your own brand on white label items, but rather selling an established brand. Your profit lies in striking a good deal for your own bulk purchase and naming a good price for your customer. You get the difference.

Write a Book – Kindle Direct Publishing

This option is definitely not for everyone – but if you are a talented writer, you can make some good money by self-publishing on Amazon via Kindle Direct Publishing.

The premise is simple. Find a trending topic that you are interested in and educated on, and get to work. Nonfiction books sell very well these days, as long as you keep your content short and relatable. Fiction works are significantly harder to get a good following with because it requires more than just expertise (ie. you actually need to be able to create a suspenseful plot, relatable characters, and have some kind of artistic flare). 

Whichever way you choose, Kindle Direct Publishing is a great way to harness your creative power and make money passively (post-production) online.

Here’s a step-by-step tutorial if this sounds like something you’d be interested in trying.

EMPLOYMENT

Did you know that Amazon employs over 1 million people across the globe? If business ownership isn’t your thing, there are plenty of opportunities to partner with Amazon by working for them or using their platform to gain freelance gigs.

Deliver for Amazon

Becoming an Amazon delivery person is becoming a more attractive option for the independent-minded gig economy worker of today. Their new program, Amazon Flex, allows drivers to maintain a level of control over their work that other delivery drivers may not enjoy.

You get to plan your schedule weekly (or daily) by picking the block you want to deliver to (or multiple blocks), and you can use your own car to do so. This flexible work schedule is great if you’re looking for some side income that pays well. Rates typically fall between $18-25 an hour!