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How to Make Money on Amazon: Ultimate Guide for Beginners

Are you looking for extra ways to make money? There are plenty of opportunities to do so on the Amazon platform - How do you get started? Read our guide to find out..
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Amazon is an online retail giant pulling in billions of dollars annually from several verticals. The growth of its subsidiaries coupled with the increasing demand for its core e-commerce service positions the retailer for exponential growth this year. If you’re serious about growing your income, Amazon provides a sleuth of services that you can join to earn passive income.

Contents

1. Amazon FBA: Piggyback on Amazon’s Infrastructure to Grow Your Company

Short for Fulfilment by Amazon (FBA), this service is one of Amazon’s most lucrative subsidiaries. The service allows users to leverage Amazon’s supply chain infrastructure to expand their businesses, while they focus on inventory management, customer relations, and product marketing.

Amazon FBA allows users to access the company’s 100-plus fulfillment centers to store their products. Amazon also handles operation aspects like order fulfillment and logistics.

Amazon FBA Homepage
Amazon FBA Homepage

Amazon’s FBA allows sellers to leverage Amazon’s customer base and distribution centers. the service has a simple yet effective model. You send your products to Amazon, they handle sorting and storage. Once a customer places an order, Amazon will pick and ship. With no involvement from you whatsoever. Amazon also takes care of returns for cases where the customer is dissatisfied with the product.

Amazon FBA is suitable for both small and large-scale sellers that want to scale their processes. But, it doesn’t come cheap.

Amazon sellers using FBA have to pay subscription fees, referral fees, and refund administration fees. Then, FBA sellers will have to also pay for FBA subscription, stock removals, storage, and more. There is a breakdown of Amazon FBA fees here.

How Much Can You Make on Amazon FBA?

Amazon FBA doesn’t have a pegged income. The amount of income you earn depends on factors such as the product line, categories, reviews and others.

Some products are considered hot products that tend to move much faster than others on Amazon. If you pick those, then your chances of making sales will increase significantly. Keep in mind that you will pay more storage fees with products that don’t move quickly.

You should also consider the season. Umbrellas sell more quickly in the rainy season, while sunscreen is a top move when the summer comes. Try to align the products you sell based on the current season.


2. Amazon Associates: High-Performance Affiliate Marketing Service on Amazon

Amazon Associates is the affiliate marketing program from Amazon. It is a simple and effective way for people to monetize their blogs, social media pages, or any other niche that they own on the Internet.

You provide the platform and audience, Amazon will provide the products and monthly checks for sales attributed to your site. Whenever a customer clicks on a link, the blogger or web administrator gets a commission.

The Amazon Associates program is suited for people who have blogs and websites with consistent levels of traffic. The platform is free to join with a  fairly easy registration process.

How to Join Amazon Associates

To join the Amazon Associates program, simply follow the steps below:

Create your website or blog

If you’re just beginning, you will need to have a website or a blog. People with social media pages, apps, and YouTube channels will also be able to benefit from the program.

Note that you will need to have a well-defined audience going into this process. It helps to have certain people that you will target soon enough.

How to Start a Blog & Make Money in 2020
Read this guide on our sister-site: How to Start a Blog & Make Money in 2020

Visit the Amazon Associates page

Log on to https://affiliate-program.amazon.com and click “Join Now For Free.” The service will redirect you to a signup page, and you can follow the instructions from there.

Build your Amazon Associates profile

Click on “New Customer” when you’re done signing up and follow the website’s prompts. They’re simple, so you shouldn’t have a problem. Once you complete registration, you’ll be ready to create affiliate links and promote Amazon products.

Tips for Making Money on Amazon Associates

The most important tip that you should keep in mind concerning Amazon Associates is that you should target the product links to your audience. Once you sell products that people will want to buy, you can raise your chances of making sales.

Amazon Associates also has some requirements. These include:

  • You have to disclose that you will earn a commission form the products that you sell.
  • You shouldn’t make any false or misleading comments about the product you’re selling.
  • Try not to refer to prices. They usually change, so you don’t want to make a false claim.
    Don’t use a link shortener on an Amazon affiliate link.

How Much Can You Earn From Amazon Associates?

Earlier this year, when the coronavirus pandemic was at its peak, Amazon announced a change to its Affiliate marketing payout. The categories paying higher commissions ranging from 4.5% to 8% were trimmed down in half.

These changes mean you need to drive a significant amount of traffic to Amazon on a daily basis to earn anything significant. For instance, if you drive 200 web visits to Amazon with a 2% conversion rate, you could be looking at 4 product sales daily. That’s a great number.

Amazon Associates Earnings
Amazon Associates Earnings

If the average product is $40 with a sales commission pegged at 4%, you just earned $1.6 per product or $6.4 daily. While this low commission on products could be discouraging, remember this is passive income. It doesn’t require heavy lifting on your part, as long as you have a consistent stream of web visits. You can check out the company’s advertising fee structure to get a glimpse of how much they pay.


3. Kindle Direct Publishing: Make Money by Selling Your Book on Amazon

If you plan to write a book, you have two paths towards publishing it. You have the traditional publishing method, which involves a publishing house or you can choose the self-publishing method.

Amazon’s Kindle Direct Publishing – or Amazon KDP is one of the best ways to self-publish and earn money selling your books.

Amazon currently holds a majority of the global eBook market. So, you want to ensure that your book is available on the company’s platform. Amazon’s KDP allows authors to publish their ebooks on Amazon, through its Kindle platform.

KDP comes with several features that authors need to sell their books. These include a free file-conversion service, sales tracking, and several tools that will help to format your book.

Self-publish eBooks and paperbacks for free with Kindle Direct Publishing
Self-publish eBooks and paperbacks for free with Kindle Direct Publishing

One of the benefits of Amazon KDP is that its platform is easy to use. Once you log into the platform, you get a prompt that tells you to create a title, and you can effectively publish it from there. Here are a list of things to put in place before you self-publish:

  • A title, a subtitle, and your name
  • A book description: For your best interest, you should have a description that is marketing-optimized
  • The keywords and categories that you would like to use
  • A beautifully-designed cover
  • The book itself
  • Your selling price

4. Amazon Mechanical Turk: Freelance Work on the Amazon Platform

The Amazon Mechanical Turk (MTurk) is a crowdsourcing marketplace for hiring workers to complete on-demand tasks that can’t be done remotely.

Launched in 2015, the service is one of Amazon’s unsung products. However, if you’re dedicated enough, you should be able to make some good money off it. On MTurk, “requesters” post jobs – which are known as “Human Intelligence Tasks” that “turkers” can do for little amounts of money.

Amazon Mechanical Turk
Amazon Mechanical Turk

Usually, these tasks are those that algorithms and computers are unable to do – things like identifying offensive language on webpages or conducting physiological surveys. However, research shows that many jobs that requesters post on the platforms are academic research-related. There are also some tech companies looking for people to compile data for artificial intelligence systems.

MTurk is essentially Amazon’s iteration of a freelance platform – like Upwork and Fiverr. It’s not as popular as those options, but it’s quite impressive on its own.

How Much Can You Make on Amazon Mechanical Turk?

In truth, MTurk isn’t so lucrative. In 2018, an academic study analyzed 3.8 million tasks, which were completed by 2,676 turkers on the platform. The study found that average earnings on the platform were about $2 per hour. Also, only 4 percent of the turkers reviewed reported earnings of more than the federal $7.25-per-hour minimum wage.

So, unless you have a clear strategy for working on this platform, you might want to check some other freelance service. Amazon considers its turkers to be independent contractors, not employees. As such, they are not covered by federal labor laws.


5. Merch by Amazon: Design T-Shirts and Get Paid

If you sell T-shirts, then you will get a kick out of using Merch by Amazon. Merch by Amazon is a print-on-demand platform that allows anyone to sell on the platform by uploading a design.

Usually, people who start T-shirt businesses have to source for raw materials and the factories to produce them. Amazon simplifies that process by replacing the middlemen.
Amazon launched the service in 2015, and like the Mechanical Turk, it is one of the company’s less famous services. However, it presents a lucrative opportunity for savvy entrepreneurs.

The service has a simple working mechanism:

  • Open an account and upload your art on the platform
  • Pick the product you will like to sell, as well as the color you would like
  • Set a title and a price
  • Publish it on Amazon

The product becomes live and searchable on Amazon from there, and every purchase earns you a royalty.

Merch by Amazon is quite easy to use. You can place your product quickly on the platform, and you have a bunch of great templates to choose from too.

Tips for Making Money on Merch by Amazon

Find a Niche Market

This is the first step. Discover your niche market. This is the audience you plan to sell to. Identifying this group early on will go a long way in directing your efforts and how you print the shirts.

Keyword Research

Once you know your target audience, you also want to run a keyword analysis to determine what they’re searching for and the trends you can jump on as a print-on-demand business. You can also use Google Trends to see the keywords that are trending and could push sales the most. It’s never a wise move to design a shirt and hope someone likes them.

Invest in Marketing

It’s a no-brainer. If you want to make sales on Amazon, you need to do invest heavily in marketing.

How to Start an Online T-Shirt Business
Read: How to Start an Online T-Shirt Business

6. Amazon Flex: Deliver Goods for Amazon

One of the most crucial groups at Amazon has to be its drivers. These are the individuals who deliver packages and drive goods across state lines.

Amazon has full-time drivers on payroll, but the company also opened opportunities for individuals to join its courier team. As part of the company’s vision to make good on its faster delivery promise, it offers driving gigs to interested individuals within their locale. Amazon Flex is the subsidiary that makes all of this happen.

Flex drivers deliver for Amazon.com, Amazon Prime, Amazon Fresh, and more. So, you could spend a shift delivering various goods to various locations. Drivers on Amazon Flex work on their own schedule and are not mandated to show up to work as regular Amazon drivers.

Amazon Flex – Requirements and Needs

  • You must be at least 21 years old
  • You should have a valid driver’s license
  • You should have a roadworthy vehicle

You’ll also need the following:

  • A smartphone: You need a phone with a clear camera to scan barcodes.
  • A vehicle: Amazon requires at least a four-door midsize sedan for deliveries on Amazon.com. SUVs and minivans can accommodate more load, which increases your earnings potential.  Have your license and registration with you at all times, and you’re ready to start earning.
  • Identification: Amazon will ask different identification questions from you. The company will need to especially check your driving history and any criminal records – a process that could take two to five days.

How Much Can you Make on Amazon Flex?

The Amazon Flex website claims that you could make between $18 and $25 an hour on a shift. However, some factors determine where you fall on that scale.

First, there is the size of your vehicle. A larger car means the ability to deliver more packages – good for you.

You can also claim blocks at busy times. The app has information on possible quick delivery jobs, which will pay you higher. If you get an Amazon Fresh or Prime Now delivery, you could get some tips from customers.

Amazon pays drivers on Tuesdays and Fridays. Also, drivers who deliver for Prime Now and Amazon Restaurants will get paid after their tips get processed. This process takes about two days after the delivery.

For taxation, you’ll be responsible for withholding money for your taxes. Amazon categorizes “Flexers” as independent contractors, so the company won’t be held liable for any tax issue that arises in the future.


7. Amazon Trade-In: Sell Your Old Stuff on Amazon

With Amazon Trade-In, you can trade your unused items for Amazon gift cards. These include old books, phones, video games, DVDs, and others. The trade-in program from Amazon is quite simple and easy to operate.

How Amazon Trade-In Works

The service works straightforwardly.

  • Visit the Amazon Trade-In page and browse for the items you have to sell.
  • Add the items to your trade-in submission.
  • Check the conditions for each item (view Amazon conditions here)
  • Amazon gives you an offer for each item.
  • Accept the offer, and you get a free UPS shipping label to print.
  • Package the item and send it over in 7 to 14 days
  • Upon receipt, Amazon credits your account.

You can track your product as it moves to ensure that the company gets it.

How Much Can You Make with Amazon Trade-In?

Your potential earnings with the trade-in program vary and depend on the product. However, it’s critical for you to be honest in your dealings with the Trade-In program and disclose the true state of the items. Amazon could reject a defective product on receipt, since they’ll only pay you when they have ascertained its authenticity.

Remember that you will need your packaging when sending the product over. If you’re trading in a phone or other fragile items, you can get special boxes for electronics with FedEx, UPS, and USPS.


8. Arbitrage Opportunities on Amazon

Retail Arbitrage

Retail arbitrage is another lucrative opportunity that a lot of Amazon users might want to avail themselves of. With retail arbitrage, you have a simple modus operandi. You walk into any physical store, purchase an item, and sell it for a higher price on Amazon. Pocket the difference and you’re on your merry way.

So, imagine you have a set of 20 pens on sale at a physical Walmart store for $20. You could buy them and sell it on Amazon for, say, $30. That’s a $10 gain for you.

How to Make the Most of Amazon’s Retail Arbitrage Opportunities

Get a Scouting App

There are several scouting apps available for you. They are set up to find the prices of items and places where you can get them for cheap. You could also use the Amazon seller app to check prices and compare them with what you can find in physical stores.

Learn About Store Markdown Times

Keep your ears to the ground and know when physical stores around you are running discounts and other promotions. This way, you’re ready to make purchases when the time is right.

Check Out the Competition

Like it is with regular selling, the best way to make sales on Amazon will be to sell a product for a lower price than your competitors. Of course, remember that you still need to keep things believable.

How Much Money Can You Make with Amazon’s Retail Arbitrage?

There’s no one-size-fits-all answer. However, your profit potential in the short-term depends mainly on your capital. The more funds available to invest, the more products you can purchase. A higher inventory allows you to sell more.

You should also make more money when you research and get products that are selling much quicker. You don’t want to sit on excess inventory for long and miss out on arbitrage opportunities.

Online Arbitrage

Online arbitrage follows mostly the same rule as retail arbitrage – buy low, sell high. In this case, however, you get to buy from a local online marketplace and sell it for a higher price on Amazon.

It’s mostly the same with retail arbitrage, but with an online-to-online conduit – not physical-to-online. So, the tools and processes are pretty much the same things.

How to Make the Most of Amazon’s Online Arbitrage Opportunities

Start Small

You will need to take things much slower with online arbitrage. Practice smart buying habits, as well as product preparation and shipping. This tip will help you to minimize mistakes as you get the business off the ground.

Take Care of the Amazon Headache

Many Amazon sellers use Amazon FBA because it simplifies their operations. If you’re one, then you will have some fees to sort out. These fees could eat into your profits.

Product Selection

Remember to choose products – based on demand and the season. Since you might have to pay for storage with a third-party, you don’t want products sitting in inventory for too long.

How Much Can You Make with Amazon Online Arbitrage?

Online arbitrage is easier than retail arbitrage. However, it suffers from almost the same problems that plague retail arbitrage — it’s competitive, requires a significant learning curve, and could be time-consuming.

For earnings, about $100 for the first three months is realistic due to the learning curve. From the third month upwards, you should have your feet on the ground and become more comfortable and smarter in discovering deals. Your earning potential could shoot high as $400 to $1,000/month.


Conclusion: Is Amazon Worth Your Time?

Amazon is an e-commerce platform with a global reach. While many users focus on its core business, the company also provides several other lucrative subsidiaries.

By adopting any of the methods listed above, you can access a stable alternate revenue stream for yourself and your business. With enough time, you could even skip the 9 to 5 and focus on operating your business full-time.

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning.He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience.He has a strong passion for regulation and macroeconomic trends as it allows him to peek under the global bonnet to see how the world works.