How to Make Money on Amazon: A Comprehensive Guide for Beginners
Amazon has become one of the biggest marketplaces on the internet. As online shopping continues to grow, more and more people are turning to Amazon to buy everything from groceries to furniture. This massive growth also presents major money-making opportunities for regular people like you and me.
In this comprehensive 4,000-word guide, I’ll walk you through the most popular ways to make money on Amazon, with tips and examples to help you get started. Whether you want to sell your own products, promote other people’s stuff as an affiliate, or offer services to other Amazon sellers, there are options for everyone.
Selling Your Own Products
Selling your own products on Amazon is one of the most popular ways to make money on the platform. The key steps are:
1. Source a Product
The first step is finding a product to sell that will be profitable. I recommend finding one that:
- Has good profit margin potential
- Fits into a specific niche
- Is relatively lightweight and easy to store/ship
- Isn’trestricted by Amazon (no firearms, alcohol etc.)
For example, a friend of mine makes wooden toys and sells them successfully on Amazon. The materials don’t cost too much, the toys are lightweight/easy to ship, and there is demand from parents looking for unique toys.
Places to find product ideas:
- Your own hobbies and interests
- Existing store products that could be sold online
- Trade shows
2. Check Competition
Once you’ve settled on a potential product, ​it’s essential to thoroughly check the competition. This gives you an idea of how much demand there is and how much you can reasonably charge.
Use the Amazon Best Sellers lists and search bar to see what else ranks for your main keywords. Pay attention to factors like:
- Number of sellers already selling similar items
- Their pricing
- Their ratings and number of reviews
Ideally, you want to find a product with high demand but relatively low competition. For example, if there are only one or two sellers offering a particular product that has strong sales, that gap in the market presents an opportunity.
3. Source the Product
Next, you need to find a supplier or manufacturer to source the product from. For example:
- Alibaba – For mass-produced generic products made in China
- SaleHoo – For finding thoroughly vetted suppliers
- ThomasNet – For American manufacturers able to create custom products
Focus on finding good quality suppliers known for reliability. Don’t just go with the cheapest options or it may end up costing you in the long run. Vet suppliers thoroughly by asking for samples, checking reputations, contacting existing customers, etc.
For example, when I was sourcing water bottles to sell under my own brand, I ordered samples from three different factories in China before deciding on the best quality/price ratio.
4. Label and Brand the Product
Now it’s time to put your own brand name and logo onto the product!
You’ll need graphic design skills or to hire a designer. Focus on simple, clean branding that looks professional.
For shipping purposes, it’s best to add branding using stickers and customizable packaging, rather than etching/engraving products themselves.
5. Create Listings
Optimized Amazon listings are key to success. Your listings need to convince the buyer your product is better quality and value compared to competitors.
Important listing elements:
- High-quality photos – Use a clean white background, multiple angles, props, natural lighting
- Detailed bulleted features/benefits – Help buyers understand what makes your product special
- Backend keywords – Ensure you target all relevant keyword variations
- Competitive pricing – Undercut competitors slightly, if possible, to attract sales
- Promotions – Set up PPC and Lightning Deals when launching to generate sales
Spend time getting your photos, descriptions and pricing on point before launching your listings. This gives you the best chance of garnering those all-important initial sales and reviews.
6. Drive External Traffic
Don’t just rely on Amazon’s internal traffic – most successful sellers put effort into driving their own traffic too. This could involve:
- Creating an email list and sending promos to subscribers
- Running ads via Google, Facebook etc. pointing back to your listings
- Reaching out to reviewers/influencers to try your product (provide free review samples)
- Active social media marketing pointing followers to your Amazon store
Driving recurring external traffic sources will boost your sales and minimize reliance on Amazon’s algorithm.
7. Fulfill Orders
As the orders start coming in (hopefully!), you need an efficient order fulfillment process:
- Receive order notification
- Print order shipping label
- Pack order in shipping box
- Affix shipping label and send off
Efficiency is key – the less time spent on each fulfillment, the more profit you make. As you scale up, consider outsourcing fulfillment to somewhere like ShipBob who can store/pack/ship each order on your behalf.
8. Follow Up With Customers
Follow up with buyers to encourage repeat purchases and build loyalty. For example:
- Email thanking them for their purchase
- Later email checking they are happy with the product
- Share discount code for next purchase
- Collect photo/video reviews to use in your listings
Little personal touches like this help small Amazon sellers provide better customer service than the giant corporations they are up against!
So in a nutshell, those are the key steps to begin selling your own branded products:
- Source a viable product idea
- Vet the competition
- Find a quality supplier
- Add your branding
- Create optimized listings
- Drive external traffic
- Handle order fulfillment
- Follow up with customers
The initial product research stage is the most crucial part – so make sure to thoroughly validate your product idea before spending money on inventory and branding!
Now let’s explore a very different option…
Amazon Affiliate Marketing
If creating your own products to sell seems intimidating, affiliate marketing with Amazon Associates could be a good alternative to start with.
This program allows you to earn commissions by essentially promoting other people’s products listed on Amazon. For example, by sharing affiliate links pointing to popular Amazon goods.
It works like this…
1. Join Amazon Associates
First, ​you need to join the Amazon Associates program. This is completely free and just involves setting up an account and getting approved (usually only takes a few days).
Once approved, you will get access to affiliate links for every single product listed on Amazon.
For example, here is an affiliate link which would earn me a small commission if someone clicked it and bought the associated product:
Notice the long tag on the end containing my “associate ID” string. This identifies me as the referrer to credit for any resulting sales.
2. Promote Relevant Products
Next, integrate these personalized affiliate links into content promoting relevant products – for example:
- Blog posts recommending useful products for your target audience
- “Best Bluetooth speakers” style reviews and comparisons
- Email newsletter promos showcasing great deals in niche markets
- Share useful products with followers on social media
The key is crafting compelling content that encourages readers to check out the recommended products and make purchases.
For example, as a tech blogger, when I publish reviews of “The Best Budget Chromebooks for Students 2023”, my readers often click those affiliate links to explore pricing and deals on my top picks.
3. Earn Affiliate Commissions
If readers end up placing an order after clicking your affiliate link, you earn an affiliate commission on their purchase.
For example, if someone bought a $500 laptop via my affiliate link, I might make a 6% commission…so $30 in that case. Commissions vary by product category but are often in the 4-10% range.
It may not sound like much but commissions can add up fast, especially if you have a sizable audience and promote relevant products they may be interested in buying anyway.
One of the best parts of the Amazon Associates program is that there are no minimum sales requirements. Whether you drive 1 or 1000 sales per month, you will still earn the same commission rate.
Amazon also offers higher commission rates once you reach certain monthly sales thresholds – up to 10% is possible for big affiliates.
Building a popular blog, YouTube channel, email list or social media following around a specific niche makes affiliate marketing highly effective. You can really leverage that targeted audience and trust.
But affiliate marketing also works well paired with other techniques like…
4. Create an Affiliate Website
Having your own website centered around affiliate marketing allows for more customization and ways to encourage clicks and conversions.
For example, you could create a workout equipment site showcasing your favorite dumbbells, yoga mats and fitness trackers available on Amazon.
Effective affiliate site tactics include:
- Detailed reviews and comparisons
- Curated lists of recommended items
- Blog covering news and tips from your niche
- Email signup bonuses and promos
- Retargeting ads to previous site visitors
Building an audience returning to your niche affiliate site multiples the chances of resulting Amazon purchases.
And if crafted well, that content will also rank in Google and drive organic search traffic from people hunting for those items.
So in summary, Amazon Associates is a versatile program allowing you to earn commissions essentially by recommending products you love using content, videos, social posts and websites.
It may take some trial and error to figure out which affiliate promotions convert best. But the more targeted your audience and content, the higher your chances of success.
Pro Services for Amazon Sellers
Here is an entirely different way of making money on Amazon without actually selling any products yourself…
Offering professional services to existing Amazon sellers!
Let’s explore some of the ways people are charging hefty fees to aid other sellers:
1. Amazon PPC Management
Amazon PPC ads are essential for sales but tricky to get right. Many sellers end up wasting hundreds of dollars on poorly optimized ads.
Here lies a major opportunity to offer affordable PPC management services tailored to Amazon. For example:
- Auditing their existing campaign performance
- Optimizing keywords, match types and bids
- A/B testing various ad elements
- Ensuring ads stay within suggested budgets
I recently had a call with an agency charging $1000 per month to manage PPC campaigns for just a handful of supplement sellers. Yet their clients are happy as the resulting sales growth offsets the ad spend.
This makes Amazon PPC management a very scalable business with lots of demand. Especially if you can keep fees reasonable while still delivering great results.
2. Amazon Listing Optimization
Creating optimized listings is similarly crucial for seller success on Amazon – yet also time consuming and tricky.
Many sellers end up with hastily created, ineffective listings costing them lost sales.
Professional Amazon listing optimization services help fix this common issue. For example, you could offer:
- Keyword research to maximize discovery
- Enhanced listing copywriting
- Higher-converting listing layouts
- More enticing photography/media
- Ongoing split-testing services
I recently paid a one-time fee of $200 to have some of my listings optimized and it more than paid for itself in extra sales the following month. So sellers certainly see this as a smart ROI.
3. Amazon SEO Services
Popping up higher in Amazon search results leads directly to higher sales. So keys areas like:
- Amazon SEO
- Improving organic ranking factors
- Earning more positive reviews
Are all extremely valuable. Many sellers struggle to move up the ranks and establish long-term organic success on Amazon.
An agency specializing in deep Amazon SEO strategies can make a big impact here. For example by helping:
- Structure product titles/bullets for keyword targeting
- Optimize backend search terms
- Improve conversion rate for better ACRank
- Build incentives for earning more reviews
- Fix issues with listing suppression
I know an Amazon SEO expert who charges $2000+ per month to implement custom strategies for supplement brands struggling to rank. But he gets incredible results ranking them on page one for key searches.
So there is certainly demand for these optimization services if you can demonstrate a proven track record here.
4. Amazon Sponsored Brands Ads
Another newer PPC option on Amazon are Sponsored Brands ads – appearing prominently in search results and the top of category pages.
These brand-building ads tend to convert very well when done right. But many sellers struggle to create effective ads and target them strategically.
Offering Sponsored Brands management is another way to charge ongoing fees helping Amazon sellers get set up and scale this emerging ad format.
So in summary, sellers need all kinds of professional help when it comes to marketing and optimizing their Amazon presence.
And they are prepared to pay decent monthly fees if you can demonstrably boost their sales and profitability.
So offering your services here is a scalable business model leveraging Amazon’s growth while avoiding all the hassle of shipping actual products yourself!
Conclusion
As you can see, Amazon offers ample money making opportunities if you know where to look!
To quickly recap the main options:
- Sell Your Own Products – Source merchandise, add branding, handle fulfillment and build external traffic to your listings. Lots of work but highly profitable at scale.
- Affiliate Marketing – Promote relevant Amazon products through content and make commissions on resulting sales with no overhead.
- Offer Professional Services – Help Amazon sellers optimize their product listings, ad campaigns, SEO, etc for hefty ongoing fees. Leverage your expertise.
I highly recommend trying one or more of these to start bringing in extra income each month. While remembering patience and persistence are key – this is a marathon, not a sprint!
Hopefully this step-by-step guide gave you some ideas on potential paths forward. Please let me know if you have any other questions – would be happy to help however I can!
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