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How To Make Passive Income On Amazon (All You Need To Know)

Want to know How To Make Passive Income On Amazon?

How can you make money selling on Amazon?

What should you know?

Keep reading as we have gathered exactly the information that you need!

Let’s dig into our passive income and money-making tips!

Are you ready?

Let’s get started!

How To Make Passive Income On Amazon 

There are many ways you can earn an income through Amazon where you get a commission whenever a sale is made.

Essentially, Amazon offers its platform to anyone to sell products in exchange for some commission.

In addition to that, you can also earn a commission by promoting products to earn a commission by signing up to the Amazon Associates program.

To give you an idea of the diverse ways you can earn real cash on Amazon, here are the different ways to sell products:

  • Fulfillment By Amazon (FBA)
  • Fulfillment by Merchant (FBM)
  • Retail Arbitrage
  • Dropshipping
  • Wholesale
  • Private Label
  • Sell Your Products
  • Amazon Associates

Let’s look at each of these methods to see how you can make money.

Fulfillment By Amazon (FBA)

Fulfillment By Amazon or FBA is one great way to have Amazon take care of shipping your products to your customers when you generate a sale.

Essentially, you are taking advantage of Amazon’s warehouse to store your products until a sale is made.

If you have good products to sell, you can earn relatively passive income through the FBA service offered by Amazon as all you need to do is to find products to sell, give them to the Amazon warehouse and they’ll ship out your products to your customers.

Here is how FBA works:

  • Find a product to sell
  • Inform Amazon what you have to sell
  • Amazon will tell you to which warehouse to ship your product
  • Amazon will provide you with your shipping labels
  • You will tell Amazon how many boxes of products you’ll have
  • You put your products in boxes
  • You ship your products to the warehouse
  • You sell your products 
  • Amazon will fulfill the order for you

Nice!

Fulfillment By Merchant (FBM)

You can also make money through the Fulfillment By Merchant (FBM) service offered by Amazon.

Is this really passive income?

Maybe not truly passive but you can still make great revenues.

FBM is similar to Fulfillment By Amazon with the main difference that Amazon will not handle the product storage in their warehouse and shipping to clients.

When an order comes for your product, you are responsible to ship the products within a specific period of time to fulfill the order.

You use the Amazon platform to sell your products and when an order comes in you need to handle everything.

The advantage of FBM is that you have less fees to pay Amazon but you may not generate as much sales as Amazon tends to prefer FBA.

Retail Arbitrage

Next: retail arbitrage!

What is retail arbitrage anyway?

Retail arbitrage is the process of you flipping retail products on Amazon for a profit.

The way it works is that you search for deeply discounted products either in a local retail store or online, buy the discounted products in bulk, and sell them on Amazon at a higher price.

You will essentially make a profit equal to the difference between the price at which you sold the goods on Amazon and how much you had bought it at the retail store.

Retail arbitrage is not necessarily a passive activity if you are doing all the work yourself.

You also need to know what you are doing as you may have restrictions on what you can sell on Amazon, different brands protect their markets in different ways, and you may need permits etc.

Dropshipping

Another way to make money on Amazon is by dropshipping.

Dropshipping is a type of sales model where you list a product that you do not make or create on Amazon under the Fulfillment By Merchant program, when an order comes in, you buy the products from a supplier or vendor and quickly fulfill your Amazon order.

This way, you actually never hold any inventory.

You list a product that you do not have, an order comes in, you buy the product on the spot, and ship it to fulfill your order.

Wholesale

A more traditional approach in making money with Amazon is by selling wholesale.

What this means is that you will find suppliers of different products that you wish to sell and negotiate a wholesale agreement with them where they offer you the products in bulk at a discount.

Then, once you buy the products, you sell them at retail price on Amazon.

You can make a decent amount of money this way if you have good and reliable suppliers who offer you good discounts.

Private Label

Private label selling is a sales approach that may allow you to make a steady stream of income through Amazon.

With a private label, you find a product manufacturer who agrees that you sell their product under your own brand, you then list your products on Amazon under your name, and you sell.

If you sell private label, you can sell all sorts of products for profits.

On the other hand, you are accountable to your customers.

Sell Your Products

There are many entrepreneurs that have made significant amounts of money selling their own products on Amazon.

We’ve put this on our list on how to make passive income through Amazon but it actually is not passive at all if you are handling all aspects of the work.

If you are able to create a product yourself or find someone to exclusively create products for you, you can then turn around and sell them on Amazon.

By making your own products (yourself), if make money if you can sell over your cost of goods sold.

If you have someone exclusively make the products for you, you’ll need to factor in the procurement costs in your pricing on Amazon.

Amazon Associates

You want to make money on Amazon passively but you don’t want to have to deal with products, storage, shipment, customers, or any of that stuff.

In that case, you should consider the Amazon Associates program.

With Amazon Associates, you can make money passively as an affiliate marketer.

By promoting products on Amazon and sending leads over to Amazon, you will earn a commission whenever your leads buy from Amazon.

This can be truly a great source of passive income through Amazon.

Personally, although each of the sales approaches on Amazon has advantages and merit, my favorite is Amazon Associates.

If you have a blog, YouTube Channle, or a website where you can drive traffic to Amazon, you have the potential of making significant returns.

The more traffic you send to Amazon, the more chances someone will buy, and the more commissions you will earn (all passively).

Amazon Passive Income FAQ

Let’s look at some of the frequently asked questions about how to make passive income on Amazon.

Can You Make Passive Income On Amazon?

Absolutely, you can make passive income on Amazon.

The most passive approach in making passive income on Amazon is to sign up for their affiliate marketing program under the Amazon Associates banner.

As an affiliate marketer, you send leads to Amazon through your affiliate marketing link given to you by Amazon and if a sale is made, you make money.

The beauty of this approach is that if you have a blog where you can drive consistent organic traffic to it, you can provide additional value to your audience by referring them to valuable products on Amazon that can solve their problem or fulfill their needs.

It’s a win-win approach as you monetize your blog or website traffic, your audience finds what they are looking for, and Amazon makes a sale.

How Can I Earn Money With Amazon?

You can earn money by selling products on Amazon or by referring others to Amazon and earning a commission.

What’s great about Amazon is that anyone can potentially qualify to do business on Amazon and make money.

For example, bloggers and online entrepreneurs will love taking advantage of the Amazon Associate program as they can refer online traffic to Amazon and earn a commission (affiliate marketing).

Those who are more hands-on will also love Amazon as they can create their own products to sell to earn cash.

If you don’t want to create your own product to sell, you can also buy products from others, sell on Amazon, and make money.

Overall, there are many ways that you can make money.

Can You Get Rich On Amazon?

You can get rich on Amazon the same way that you can get rich by starting a business.

Getting rich is directly correlated with the effort that you put in, how much risk you are willing to take, how much business sense you have, a little bit of luck, and so on.

I don’t want to present Amazon as a platform where everyone gets on, makes a pile of cash, and enters into the realm of financial freedom.

You can make money on Amazon but if you don’t do things right, you can also lose money as well.

There are many entrepreneurs that have consistently make money on Amazon developing their wealth over time.

If they can do it, so can you.

Passive Income Amazon Takeaways 

So, how do you make passive income on Amazon?

In this article, we presented 8 ways to make money on Amazon (some more passive than others):

  • Fulfillment By Amazon (FBA)
  • Fulfillment by Merchant (FBM)
  • Retail Arbitrage
  • Dropshipping
  • Wholesale
  • Private Label
  • Sell Your Products
  • Amazon Associates

If you feel like starting your own business, being your own boss, making your own money, you may want to consider the different approaches to make money on Amazon we’ve covered in this post.

Let’s look at a summary of our findings.

How To Make Passive Income On Amazon

  • Amazon provides you a wonderful platform to make money potentially passively, consistently, and for a long-time (if done right)
  • There are two main methods for earning an income on Amazon where the first is by selling products and the second is by earning affiliate marketing commission
  • If you are interested in selling products to earn a profit, you should consider the FBA, FBM, retail arbitrage, dropshipping, wholesale, private label, and possibly selling your own product
  • The second approach is to become an affiliate marketer and create an online method where you direct targetted leads to Amazon so they purchase something and you earn a commission in return 
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My Passive Income Blog

By the way, on this blog, I focus on generating passive income in order to build wealth over time.

If you are interested in making money through actionable, real, and concrete strategies to earn a steady stream of cash flow over time, be sure to check my passive income blog posts!

Also, if you’re interested in getting more posts from me sent to you, subscribe to my blog.

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