Do you know that ordinary people can make money through Amazon.com in many ways? Some people don't even know that you don't have to be an employee of Amazon to make money from the site. Apart from that, others don’t know that there are more ways to make money besides selling products. In fact, you can sell products from other companies on Amazon, or you can sell your own, or you can simply promote products that already exist on your website to make money! In this post, we will cover the main ways people make money on Amazon to help you decide which way to sell or generate income.
Retail Arbitrage
Retail Arbitrage refers to the seller buying popular products at a low price in a physical store or online, and then listing them on Amazon to make a profit.
sounds simple, but it works very well if you know how to find a deal. It's also a very cheap way to understand how the Amazon Selling platform works without committing to getting a big first order from overseas manufacturers.
Typical process for people selling Amazon retail arbitrage:
Understand your local trading locations (Walmart , Target, TJ Maxx, Jia Debao , thrift stores and other retail stores)
Frequently visit these places, pay special attention to their clearance items, inventory backlog and liquidation.
Using the Amazon Seller app or 3rd party, you can scan for potential transactions to see if they are available on Amazon, whether the price difference is enough to make a profit, and whether 3rd party sellers (such as yourself) are allowed to list all products on Amazon.
When you find a popular product, buy as many as you can.
Send products to Amazon FBA warehouse
When the unit sells, Amazon will complete the order for you and send the profit to you! Sounds like a lot of work? Running a business is a difficult task! Although the process may sound clumsy, many people find it successful to do it, and if you are the type of person who already likes to go to retail stores, this may be a good fit for you.
Benefits of retail arbitrage
· The potential for finding the "first prize" with huge profit margins.
· Zero product development. Without considering unique innovative products, you are just reselling existing products.
· Low entry cost.
· Simple way to learn the Amazon platform, how to send products to Amazon FBA, set up seller account, etc.
· The potential income is quite high, and if you are good at it, it is enough to replace a full-time job.
Weaknesses of retail arbitrage
· Difficult to scale. You can only find the number of stores and deals you can find, so it is much harder to scale to 7 or 8 numbers.
· Huge investment in time. You can only visit so many stores a day, and constant store trips can start to cause a drag on some people.
· Feast or famine. You can find a potential deal, scan it with your app and see only that the 3rd party dealer is not allowed to sell that particular product.
· Limit the money you can make. While few arbitrage sellers can earn very high income, this is a bit rare.
· Zero brand building. The business you are creating is something no one has heard of, so all the benefits of having a brand offer won’t work for you.
Overall, retail arbitrage is a great way to get involved in Amazon’s sales system, with the potential to change jobs or a high-paying “side job”, but not satisfactory in scaling up and reaching very high income figures.
Become a wholesaler
Wholesale sales on Amazon are similar to arbitrage because you are selling products that already exist on the platform, but instead of looking for deals in retail stores, you are building deals with actual brands to sell their products on Amazon.You might be wondering how to sell products on Amazon for another company that they can’t sell on their own? This is a good question, but we have to remember that different businesses operate differently, Amazon may not be what they are good at and do not know how to sell well. One way wholesalers work on Amazon is to be creative with existing products, or try to be exclusive sellers or products that are popular but not yet sold on Amazon, or to make a list of unique versions of existing products so that they always have control of the buy box.
benefits of wholesale on Amazon
· High income potential. You can expand your wholesale business because there will always be products on the market that can be sold on Amazon, and it's just a matter of finding them.
· No product development. Similar to arbitrage, you resell products from existing brands, so you don’t have to create anything new.
· Focused on business. There are much fewer moving parts wholesale than other ways to sell on Amazon. Many business features are handled by Amazon or the brand you purchased, and you focus primarily on the logistics of reaching deals with brands and shipping products to Amazon. Weaknesses in
Wholesale
· It is difficult to find the product to be sold. In today’s world, most brands know Amazon and how to sell on the platform. It's hard for you to find a good opportunity.
· Fighting for Buy Box may hurt profit margins. Many wholesalers have to compete with other wholesalers for control of the "Buy Box" on Amazon listing, and the way to get the Buy Box is at the lowest price.
· No transaction = no sales. Similar to arbitrage, if you can't find a brand to resell, then you don't have any sales or any money.
Wholesale can be a challenging way to run an Amazon business, and many things can be beyond your control. Still, many find selling in this way successful, and anyone who wants to sell on Amazon should consider it.
Private Brands on Amazon
Create a private brand is what most current sellers on Amazon do, it is to create products that don't exist on Amazon and sell them under your personal brand.
The difference between a private label, a private label or a simple "brand" business can sometimes mean something different depending on who you are talking to about the matter, but in most cases they have started to blend and all mean the same thing.
Traditionally, private label sales simply mean buying the product directly from the manufacturer, posting your "brand" and selling it on Amazon.
However, as the Amazon platform continues to evolve and become more competitive, it is not enough to flip the product by adding tags, and sellers must come up with better brands, more innovations and unique products to stand out from the competition. At that time, you were no longer just a “private label”, but you created a brand and sold products you designed. While this is not necessarily a "private brand" business, people still mostly call their own brand running on Amazon private label sales. In any case, private brand sales are the mainstay of Amazon, and if you choose to go this path, it will bring a lot of benefits.
The benefits of having a private brand on Amazon
· Extremely scalable. You can always increase sales of your existing product lines or continuously launch new products in the product categories you sell.
· Brand potential. If your product brand is good, you can become a leader in your category and eventually even expand to your own independent e-commerce store.
· You are under control. You purchase your products, you are responsible for your list, you set the price. With such a level of control, your potential will be higher.
has a private brand weakness on Amazon
·Slow up and running.Product manufacturing can take 30-90 days, overseas shipping takes 30-60 days, and it can take 3 days to 3 weeks (or more) to get your product to Amazon FBA warehouses.
· Innovation and brand depend on you. As a wholesaler or doing arbitrage, you are actually reselling products from brands that are already doing well in creating products that are of interest to the market. With your own brand, you start from scratch and you must win every customer.
· Wear a lot of hats. Private labels make you a one-on-one company, you are both CEO and all other positions within the company. Marketing, purchasing, writing copy, advertising, creating images for products, logistics, customer service, R&D, everything must be done by you.
Overall private brand sales have the most moving part, which can be considered the most "difficult" sales method on Amazon, but it can be said to be the most valuable sales method, with high revenue potential and providing useful products to the world you think of.
Amazon Direct
Direct selling is when you don't pre-order products from retail stores or brands before selling like arbitrage or wholesale, but just buys the product when the product is sold to the end customer and then ships the product directly to them from its source. The advantages here are obvious, you don’t have to take any cash risks on stocking products, warehousing or purchasing products, you just have to profit from each sale.
dropshipping is the ultimate "passive income, non-interference" business that everyone wants to enter, but its reality is not that fascinating, especially on Amazon. While dropshipping sounds great and there are many sellers who have managed to do it, on Amazon, it's not that simple because dropshippers have to follow certain rules, and dropshipping usually doesn't work perfectly with the Amazon platform, especially when it comes to Prime eligible Amazon merchandise. Amazon allows shipments, but they make it clear that you can't ship from other retail sites, just take the customer address as the recipient. The product purchased by the customer must come from a source intended to be sent to that customer, and the packaging must reflect this.
The benefits of direct sales
· Reduce operating costs. Typically, dropshippers only pay for advertising, as many dropshipping sellers use ads as the primary way to find customers.
· Focus. You do not have to deal with development, purchase, storage, or resolve logistics issues for your products. Make a list and sell products.
Dropshipping weaknesses
· Lower salary potential. Dropshipping doesn’t bring the same level of revenue to sellers like private labels or wholesalers, because you only make very little profit per product you sell.
· Amazon is not a good partner for direct sales. Dropshipped products cannot be sold through the FBA, so you missed the Prime advantage. Additionally, your packaging must be for the end customer, so you cannot purchase products on Walmart.com and use the shipping address as the customer who purchased it from your list.
Finally, Dropshipping’s cooperation with Amazon is not good enough and not worth it, and even dropshipping still requires a lot of work to get suboptimal returns. I would say you'd better have your own brand, wholesale or sell arbitrage before I would recommend direct sales on Amazon.
Amazon affiliate marketing
affiliate marketing is when you have some form of content and that content promotes or mentions a specific product and when your readers/viewers click on the links you provide and eventually purchase those products, you receive a small portion of these sales.
Any website you see that talks about the product in any way, shape or form will have an affiliate link.
Affiliate marketing is great because if you make successful content, your content will "work for you" and bring you net income when you sleep, the more content you make, the more money it provides.
Benefits of affiliate marketing
· Make money through content creation.Don't worry about designing and buying products overseas, you just have to write and talk about existing products on the market and earn sales from your content.
· Can be extended well. High-performance pages and videos can generate years of revenue, and if you have a lot of pages, videos, and other forms of content, they will become the backbone of revenue that can continue to be paid to you without maintenance.
· Creativity has a long way to go. Think of a unique way to attract audiences? Like making a TikTok video of fashionable Amazon products in a specific niche? These channels can greatly help you earn membership income.
Weaknesses in affiliate marketing
· Fierce competition. You have some very, very large companies that are fighting for these affiliated funds on the internet. New York Times website Wirecutter is a website that is purely for making money through affiliate links, so this is an example of your competition.
· Content creation and SEO knowledge are required. If you don't understand how search engines work, what quality content is or digital marketing in general, then you will have a hard time creating a well-ranked website that people find useful.
Affiliate marketing is similar to having a private brand on Amazon, as you can avoid fierce competition by focusing on your niche and product categories. If you are someone who prefers to navigate in a digital environment rather than dealing with physical products, check out affiliate marketing on Amazon.
choose the best way to sell on Amazon
so that's most of the ways people sell on Amazon (excluding vendor center sellers, because no one seeks to start a business or even take the vendor center route, which is more suitable for mature large retail brands). If you are deciding on which way to sell or make money, and ultimately, the type of business you think you can confidently work on, long-term work seems exciting and complements your existing skills – set will be a great way to start making money with Amazon.
Although most sellers on Amazon have their own brands, don’t underestimate the potential of other sales methods, because many people have seen success through various sales methods. There is nothing you can do except putting in the work and starting to make money. Good luck!
