When we talk about how to make money on Amazon, most conversations in the Amazon seller communities touch on two or three main models of making money on Amazon. But there are several business models that you can explore when selling on Amazon, depending on your expertise and available capital investment. In this blog post, we’ll explore these different Amazon business models:
1. Sell private-label products
2. Resell wholesale products
3. Kindle direct publishing
4. Dropship via amazon
5. Retail arbitrage product flipping
6. Online arbitrage product flipping
7. Amazon merch on demand
8. Sell hand-crafted items
9. Sell your used products
Sell Private-Label Products
Private labeling is one of the most popular ways to make money on Amazon. This is a business model where you buy products from a supplier, label them with your brand, and sell them on Amazon under this brand. You control everything except the manufacturing process, including design, branding, packaging, pricing, and marketing.
Why You Should Consider Private-Label Amazon Business?
There’s a reason most Amazon sellers prefer the private label business model. Here are the benefits of selling private-label products.
Brand Control
With a private label, you sell products under your brand, unlike arbitrage or wholesale, where you resell other brands’ products. This gives you control over branding, packaging, pricing, and marketing. You don’t have to seek brand approval to resell or go through the hassle of finding cheaper products to resell at a margin. The private label business model gives you some control over how you’re making money on Amazon and lets you craft a more personalized brand experience for your customers.
Less Competition
Selling private-label products exposes you to less competition compared to reselling products from well-known brands. Big brands may have several resellers, essentially selling the same product without differentiating them. This creates competition amongst the resellers, making it a tad more difficult to make money with Amazon. With private label, you sell your product under a unique brand, significantly reducing competition and making it easier to rank higher, especially in product categories with fewer sellers.
Higher Profit Margins
With less competition and more control over pricing comes higher profits! Private label products typically have higher profit margins since you’re sourcing your product directly from the manufacturer and cutting out the intermediaries. You can negotiate for better pricing with the manufacturer depending on your order volume, which would lower the product cost, leaving you room for more profit.
Product Differentiation
Private-label products can be customized to meet specific customer needs and preferences. For example, let’s say customers of a similar product are complaining about a particular flaw in that product in the reviews. You can fix that flaw in your product and use that as a way to differentiate your product and get a leg up on the competition. This allows you to appeal to more customers, enabling you to make money selling on Amazon.
Zero Competition for the Buy Box
When you resell another brand’s products, you compete for the Buy Box with all the other sellers selling the same product. Over 82% of Amazon sales happen on the Buy Box, making it a precious resource on Amazon. When you sell private label products, you’re the only seller on the listing, and you get to possess the Buy Box without competing for it with other sellers.
Step-by-Step Process for Starting a Private Label Amazon Business
Let’s walk through the process of setting up your private label business:
Step 1: Product Research
You first need to identify a profitable product to sell. Some sources for product ideas are competitor research, Amazon search, and third-party product research tools. Here’s an illustration of the qualities of the ideal product ideas for Private Label:
Step 2: Supplier Sourcing and Product Development
Finding a reliable supplier is crucial for investing in Amazon and earning money. You need to research suppliers and manufacturers, both domestically and internationally. Searching online is a good starting point, but you can also attend tradeshows to kick your supplier search up a notch and meet potential suppliers face-to-face. The graphic below illustrates the next steps once you identify a couple of potential suppliers.
Step 3: Choose a Fulfilment Method
Once you have identified a product and a supplier, you must choose whether to fulfill orders via FBM or FBA. FBM (fulfilled by merchant) is where you handle storage and order fulfillment when a shopper buys from you. FBA (fulfilled by Amazon) is when Amazon handles storage, handling, and shipping for you. We recommend going with FBA to enjoy the benefits of having your products shipped in two days or even same-day shipping if you’re on Amazon Prime.
But whether you choose FBA or FBM, My Real Profit is here to help you make sense of the overwhelming data from your private label business. Our software suite crunches your data to reveal valuable hidden insights in critical areas, allowing you to make data-driven decisions that propel your business forward.
Step 4: List Your Product on Amazon
You must have a seller account to list your products on Amazon. If you don’t have one, read our blog post on how to create an Amazon seller account. Your product listing should:
- Be optimized with relevant keywords
- Contains accurate and relevant product information
- Contains product images that follow Amazon’s image guidelines
- Include five bullet points and a product description
Step 5: Launch and Marketing
Implement marketing strategies like Amazon PPC to drive traffic to your listing. Once you start getting some sales, encourage those customers to leave reviews on your product page. As you start getting positive reviews on your product page, it’ll create a snowball effect where more reviews will attract more shoppers to buy your product and leave even more reviews. Keep monitoring your campaigns and adjusting for more profitability.
Reselling Wholesale Products
Wholesale reselling involves buying products from wholesalers and reselling them on Amazon for profit. It’s one of the less risky ways to make money with Amazon. It doesn’t require you to develop a brand and private label your products. You also don’t have to worry much about what to sell on Amazon since you can quickly identify great wholesale products with some digging.
Why Should You Consider Reselling Wholesale Products on Amazon?
Before you start plotting your action plan to buy and sell on Amazon. Here are the advantages of the Amazon wholesale reselling business model:
Access to Established Brands
Reputation is everything if you’re looking for things to sell to make money on Amazon. When reselling products, you tap into a brand’s reputation and leverage it to make money reselling that brand’s product on Amazon. This makes it easier to attract shoppers and generate sales.
Lower Risk and Entry Barrier
Reselling wholesale products doesn’t require you to develop and brand a product. This reduces the risk and lowers the required upfront investment since you’re dealing with tried-and-tested products.
Wide Product Selection
Wholesale suppliers offer a wide range of products across different categories, giving you a variety. With the right systems, this can be an excellent avenue to make passive income on Amazon since you can get products in any category and leverage the brand’s reputation.
Scalability
Reselling wholesale products on Amazon allows you to negotiate for better pricing when buying inventory in bulk, which means the profit potential is also higher as your business grows. That, coupled with the simple “buy in bulk, sell per unit” nature of reselling, makes it a highly scalable business model that can empower you to earn money from Amazon at home.
Step-by-Step Guide to Setting Up Your Wholesale Reselling Business on Amazon
Now that you understand what wholesale reselling is and the potential it holds, here’s how to carve out your slice of the marketplace:
Step 1: Research and Understand the Marketplace
Start by analyzing the market to pinpoint profitable niches. Amazon’s Best Sellers list can be a great starting point. Third-party tools also come in handy when you want to dive deep into product categories and competition analysis.
Step 2: Create an Amazon Seller Account
If you haven’t already, sign up for an Amazon Seller account.
Step 3: Establish Relationships with Suppliers
The suppliers you choose are crucial in determining whether you make money on Amazon. Attend trade shows, network with potential suppliers, and leverage online directories such as Alibaba or Thomasnet to find reputable wholesalers.
Step 4: Secure Your Inventory
Once you’ve settled on the products and suppliers, it’s time to stock up. Remember, wholesale is about volume, so ensure you have the storage space and capital to purchase inventory in bulk.
Step 5: List Your Products on Amazon
Craft product listings that stand out. Include high-quality images detailed descriptions, and use keywords effectively to improve your visibility. Follow Amazon’s guidelines on listing creation and consider the points we highlighted in the private label section above.
Step 6: Manage Your Logistics
Decide whether to use Fulfillment by Amazon (FBA) or manage the fulfillment process via FBM. FBA can simplify your logistics, making it easier to scale your Amazon business.
Step 7: Monitor and Optimize Your Sales
Track your sales and optimize your listings based on customer feedback and sales data. Use A/B testing to determine what works best regarding pricing, images, and product descriptions.
Kindle Direct Publishing
Kindle Direct Publishing (KDP) is Amazon’s self-publishing platform that allows independent authors to publish and sell their ebooks and paperbacks through Amazon. Whether it’s a gripping novel, a helpful guide, or an informative textbook, KDP empowers creators to distribute their digital books to a vast audience and earn royalties.
Benefits of Kindle Publishing on Amazon
There are several upsides to the Kindle publishing business model. Let’s look at them:
Zero Upfront Costs
If you’re wondering how to make money on Amazon for free, then Kindle publishing is the answer. Unlike traditional publishing, there’s no need for a hefty investment to get started. You can publish your book on KDP for free.
Global Reach
With Amazon being one of the largest marketplaces, your book gains potential visibility to millions of readers worldwide. And if you’re selling an ebook, you can sell it to anyone across the globe without worrying about fulfillment logistics.
Higher Royalties
KDP offers up to 70% royalty on ebook sales and 60% on paperback sales. These royalties are significantly higher than many traditional publishing avenues, making Kindle publishing a perfect Amazon side hustle.
Full Control
You retain complete creative control over your book’s content, design, and marketing. This breaks the constraints of traditional publishing contracts and lets you write and format your book however you want.
Quick Publishing Cycle
The process can be as quick as 24-48 hours from submission to publication.
Flexible Pricing
You set the price for your book, and you can adjust it at any time to maximize your revenue.
Tracking and Analytics
KDP provides detailed reports on sales, royalties, and reader demographics, allowing you to understand your audience better and make data-driven decisions.
Low Barrier of Entry
Publishing a book traditionally required you to have literary agents and publishing contracts. With Amazon Kindle publishing, you can publish your book for free and make money from home when you earn royalties.
Step-by-Step Process of Starting Kindle Publishing on Amazon
Let’s walk through the process of getting started on Amazon Kindle publishing:
Step 1: Create Quality Content
High-quality and compelling content is the foundation upon which you build a successful Kindle business that’ll enable you to earn money from home. If you’re not a writer, consider hiring a ghostwriter or collaborating with other writers to write informative, well-written, professionally-edited content.
Step 2: Set Up Your Kindle Direct Publishing Account
Visit the Amazon KDP page and sign up for an account. If you already have an Amazon account, you can use the same credentials to log in.
Step 3: Format Your Book
Your book must be appropriately formatted for the Kindle platform. Amazon provides guidelines for KDP formatting, or you can use tools like the Kindle Create app to help format your manuscript and cover.
Step 4: Design a Captivating Cover
They say we shouldn’t judge a book by its cover — but many of us do. Design a professional cover that attracts readers to click on your title. Hiring a graphic designer could be a worthwhile investment here.
Step 5: Upload Your Book
Log into your Amazon KDP account, go to your dashboard, and click ‘Create a New Title.’ Then, follow the prompts to upload your book file and cover art.
Step 6: Set Pricing and Royalties
Decide on the pricing model that suits your strategy — remember, on Kindle, even a higher volume of lower-priced sales can be lucrative due to the global reach.
Step 7: Publish and Market Your Book
Once everything is set, hit ‘Publish.’ Your book will typically be live within 24-48 hours. Utilize Amazon’s promotional tools, social media, and other marketing strategies to spread the word and attract more eyeballs to your book.
Step 8: Monitor Your Sales and Adapt
Check your Amazon KDP sales report regularly, analyze your performance, and be ready to change your marketing and pricing strategies to optimize sales.
Amazon Dropshipping
Amazon Dropshipping is a business model that allows you to sell other companies’ products on Amazon without keeping inventory. Instead, when a customer purchases from your Amazon store, the order is sent to a third-party supplier, who then ships the product directly to the customer. As a dropshipper, you never handle the product directly — your focus is on the selling and marketing side, while your partnered suppliers handle the rest.
Why You Should Start Dropship on Amazon
There are numerous reasons why dropshipping on Amazon is a popular choice among e-commerce beginners and seasoned sellers:
Lower Start-up Costs
Since there’s no need to invest in inventory, starting costs are substantially lower than traditional retail models. Besides Kindle publishing, Amazon dropshipping is another low-cost way of making money from home.
Less Risk
With no money tied up in inventory, there’s less financial risk if products don’t sell.
Flexibility
You can run your business from anywhere with an internet connection. Amazon dropshipping is perfect for sellers who want to live the digital nomad lifestyle.
Easy to Scale
It’s simpler to scale your business without handling the products or shipping. You can test multiple products and scale your business relatively quickly since you don’t need to buy the inventory upfront.
Step-by-Step Process of Starting Dropshipping on Amazon
The process of setting up a dropshipping business is quite similar to wholesale selling, so we’ll go over it quickly:
Step 1: Market research: Find profitable niches and products to sell
Step 2: Find reliable suppliers on Alibaba, Aliexpress, trade shows, and supplier directories
Step 3: Create a seller account if you don’t have one
Step 4: List your products on Amazon
Step 5: Promote your products with Amazon PPC, social media, and influencers
Step 6: Monitor your listing and campaign performance and keep adjusting accordingly.
Retail Arbitrage
Retail arbitrage involves buying products from retail stores (like Walmart, Target, or even your local supermarket) at lower prices and then selling them on Amazon at a higher price. The price difference — what you bought it for versus what you sold it for — is your profit margin. The beauty of retail arbitrage as an Amazon business model is its simplicity. You don’t have to develop a product, so the start-up cost isn’t too high.
The Advantages of Retail Arbitrage on Amazon
Here are the reasons why retail arbitrage is worth considering as an Amazon business model:
Low Startup Costs
You don’t need a lot of capital to start buying your first set of products to sell on Amazon. With retailer sales and discounts, there are many opportunities to purchase inventory at a low cost and start making money on Amazon.
Flexibility
Retail arbitrage can be done part-time or full-time, depending on how much time you are willing to dedicate to your new venture. It’s a business model that can work around your schedule.
Easy Entry
You don’t need extensive experience as an Amazon seller to start. Your starting points are basic knowledge of how to set up a Seller account and an understanding of what makes a product valuable.
Step-by-Step Process of Starting a Retail Arbitrage Business on Amazon
The process of starting retail arbitrage on Amazon closely resembles that of whole selling. Let’s go over it:
Step 1: Find products to sell by doing product research, then source those products in your local stores
Step 2. Create a seller account if you don’t have one
Step 3: List your products on Amazon
Step 4: Decide whether you want to fulfill orders yourself (FBM) or via Amazon (FBA)
Step 5: Promote your products through Amazon PPC and social media marketing
Step 5: Optimize and scale based on your data. This is where My Real Profit can help you make sense of your Amazon data by breaking it down into an easy-to-understand format so you can make data-driven decisions
Online Arbitrage
Online arbitrage is like retail arbitrage, the only difference being that you source products from online stores instead of sourcing your products from local physical stores. If you sourced your products from the Walmart website, that would be online arbitrage. But if you sourced products from your local Walmart store, that would be retail arbitrage.
Online arbitrage and retail arbitrage have the same advantages. However, online arbitrage has an edge over retail arbitrage since you get more product varieties. With retail arbitrage, your product choices are limited to what you can find in retail stores near you. But with online arbitrage, every product you can find on the internet is at your disposal, giving you more product options to sell and make money on Amazon.
We’ll not break down the step-by-step process of starting an online arbitrage business on Amazon because it’s identical to starting retail arbitrage. The only difference is how you source your products.
Amazon Merch on Demand
Amazon Merch On Demand is an Amazon business model that allows sellers to create and sell custom merchandise with no upfront costs and zero inventory. Here’s how it works: You create unique designs to print on your product, upload it to Amazon, set your price, create a listing, and Amazon takes care of the printing and fulfillment. You can sell printed t-shirts, hoodies, or even mugs on Amazon merch on demand.
Pros of selling Amazon Merch on Demand
There are several reasons why Amazon Merch on Demand is a great business model:
Minimal Start-up Costs
You don’t have to buy inventory or hire storage space when selling merch on Amazon. You just need to upload your designs, and Amazon prints the product on demand when a customer orders. This slashes your start-up cost, making Amazon merch on demand one of the easiest ways to make money with Amazon.
Royalties-Based Income
You pocket a percentage with each sale, allowing you to make passive income on Amazon.
Creative Control
You have complete creative control of your designs and customer experience. You can showcase your creativity while making money on Amazon. It also offers a unique brand-building opportunity without the cost of buying and private labeling inventory.
Getting Started with Amazon Merch On Demand
Step 1: Sign up at the Amazon Merch on Demand page. You can also sign in with an existing seller account
Step 2: Follow the prompts to finish the sign-up/sign-in process
Step 3: Amazon merch has high demand, so you may be required to send a request for an invitation
Step 4: Once approved, you can upload designs and wait for review and approval
Step 5: If your designs comply with Amazon’s content policies and guidelines, you’ll get the green light to create products and market them
Sell on Amazon Handmade
Amazon Handmade is an artisan-only community on Amazon where makers can sell their hand-crafted products. Unlike the regular Amazon Marketplace, which sells a wide array of commodities, products sold on Amazon Handmade must be handmade, hand-altered, or hand-assembled (not from a kit). It also has to be hand-crafted by you or one of your employees if your shop has 20 or fewer employees.
Advantages of Selling on Amazon Handmade
Here’s why you should sell your handmade items on Amazon Handmade:
Connect with a Wide Customer Base
Amazon boasts a vast audience, ensuring visibility for your products that might be difficult to achieve through other platforms or personal websites. Tapping into this audience allows you to sell your work and build a profitable Amazon side hustle.
Trust Factor
Selling through Amazon Handmade lets you tap into the consumer trust that Amazon has established over the years, fostering customer confidence in purchasing your hand-crafted items.
Prime Eligibility
Eligibility for Amazon’s Prime program means enjoying the perks of being a Prime seller and free and fast shipping to your customers.
No Listing Expiry
Your handmade items can remain listed on Amazon without an expiry date, ensuring they are available for purchase until you decide otherwise.
Seller Support and Resources
Amazon offers dedicated seller support and resources to help artisans succeed on the platform. From educational materials to marketing tools, Amazon supports artisans at every stage of their Amazon business.
How to Start Selling on Amazon Handmade
Step 1: Apply for Amazon Handmade with your regular seller account or create a new seller account if you don’t have one
Step 2: Create an artisan profile with your biography, the story of your craft, and compelling photos of your work
Step 3: Once approved, set up your products by creating listings for them
Step 4: Manage your inventory and fulfillment by deciding whether you’ll fulfill orders yourself (FBM) or via Amazon (FBA)
Step 5: Promote your products with Amazon PPC and start making sales
Sell Your Used Items
Amazon can come in handy when you want to sell pre-owned items and make money on Amazon for free. But Amazon doesn’t allow you to sell anything you find lying around your house. There are clear marketplace condition guidelines that dictate the product categories that accept used items for sale.
Advantages of Selling Used Items on Amazon
Selling used items has many advantages:
Profit Potential
Selling used items on Amazon can be profitable, especially for items in good condition or high demand. You can also make a decent profit if you find cheap items from thrift stores and resell them on Amazon. You can then set your prices and potentially earn a higher return on your investment than other selling platforms.
Diverse Product Categories
Amazon allows selling used items in several categories, from electronics to books. This diversity allows you to explore different niches and find profitable items to sell.
Low Startup Costs
Selling used items on Amazon requires minimal upfront investment and can be a way to earn money on Amazon for free if you’re selling items you already own. But even if you’re reselling items you source from thrift stores, you still won’t need to invest large amounts like you would in a private label business.
Step-by-Step Process of Selling Used Items on Amazon
Step 1: Create a seller account if you don’t have one
Step 2: Research your used item values to determine their potential selling price on Amazon, considering condition, brand, age, and demand
Step 3: Create a listing for your product, and don’t forget to indicate that it’s a used item
Step 4: Choose whether to fulfill via FBM or FBA
Step 5: Market your items and start selling
Bonus: Additional Ways to Make Money on Amazon Without Selling
Selling products isn’t the only way to earn a living on Amazon. If you’re wondering how to make money on Amazon without selling, there are other Amazon services you can leverage to make money without selling. Let’s look at them.
Work Remotely With Amazon Mechanical Turk
MTurk is an Amazon remote jobs platform that matches remote workers with companies that need their services. This is the best way to make money from home on Amazon without selling products. You can find quick cash jobs by signing up for the Amazon Mechanical Turk platform and applying for jobs that match your skills.
Provide Your Services Via Amazon Services
Unlike MTurk, which focuses on part-time Amazon remote jobs, Amazon Services focuses on services like plumping, lawn maintenance, part-time teaching, dog walking, etc. Amazon Services is an excellent platform for professionals to find quick cash jobs by connecting with people who need help.
Become a Work-From-Home Amazon Employee
Applying for Amazon Prime jobs is another viable way to make money on Amazon. Amazon’s workforce has grown steadily over the last decade, with over 1.5 million employees in 2024. You can search for job opportunities on Amazon’s job page to find a job that’s a good fit for you.
There are also on-site job opportunities, such as delivery drivers and Amazon warehouse associates. These are great alternatives for someone who wants something other than Amazon online work-from-home jobs.
Become An Amazon Vine Reviewer
To be clear, Amazon frowns upon sellers trading product reviews for money. A seller asking people to leave them Amazon reviews for money can get banned on the marketplace. The only way to get paid to review Amazon products is to become a reviewer via the Amazon Vine Program. The program is invite-only, but you can increase your chances of getting an invite by leaving insightful reviews when you buy on Amazon. So, if you can’t review Amazon products for money, how do you get paid for Amazon reviews? Sellers send you products to review, and you get to keep the product. So basically, it’s a batter program where you keep the products you review.
Start Making Money on Amazon in 2024
If you want to start as a seller or expand, you can choose a business model that works for you from these nine proven ways to make money on Amazon. Whatever business model you choose, you will be dealing with a lot of Amazon data, and it can be overwhelming to process all of it. At My Real Profit, we crunch your data and offer it in an easy-to-understand format, allowing you to make more accurate data-driven decisions that propel your business forward. Book a free demo with us to experience the power and convenience of our data software.
