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Travis Fleming
by Travis F.posted on 24.10.2019

How to make money on Amazon in 2020

We all know Amazon as the world’s biggest online retailer. But for many savvy entrepreneurs, it also represents a great business opportunity. A lot of people are making money on Amazon. The online giant provides several different ways to make money. So, if you’ve ever thought about starting your own online business, this may be a great place to start.

But just how do you start an Amazon business? We’ve outlined all the different ways you can make money on Amazon below, and included some helpful tips and tricks to get you started.

Table of Contents

1. How to start selling on Amazon

1.1 Ways to sell on Amazon

- Retail arbitrage

- Wholesale

- Private label

1.2 Fulfillment options when selling on Amazon

1.3 Product research

1.4 Product sourcing

1.5 Setting up a seller account on Amazon

1.6 Product launch on the marketplace

1.7 FAQ about selling on Amazon 

- What should you sell on Amazon in 2020?

- How much money do you need to sell on Amazon?

- How can you start on Amazon with little money?

- How much money can you make with Amazon?

- What should you sell on Amazon to make money?

- Which apps can help you earn money on Amazon?

2. How to make money on Amazon without selling

2.1 Amazon Affiliate program 

2.2 Merch by Amazon

2.3 Self-publishing on Amazon Kindle

2.4 Amazon Flex

2.5 Amazon Mechanical Turk

3. Does it make sense to start earning on Amazon?

1. How to start selling on Amazon

You can start on Amazon by following these steps: 

  1. Understand your budget, resources and goals and choose your selling model

  2. Decide on an idea for your product 

  3. Find your product (if applicable)

  4. Set up your seller account

  5. Create your listings and let Amazon handle the shipping (if applicable)

  6. Collect your profits! 

Ways to sell on Amazon

There are a few different strategies you can employ for selling on Amazon: private label, drop shipping and retail arbitrage. It is not necessary to limit yourself to only one strategy; you can combine different strategies for different products.

Make money Selling on Amazon

Retail arbitrage

Retail arbitrage is how a number of Amazon sellers get their start because it is simple and doesn’t require a big investment.

Retail arbitrage works by scouting stores (this could include eBay, other ecommerce sites or physical stores) for items selling at low prices. You then purchase those items and resell them on Amazon at an increased price. In some cases, you can find items selling at less than half the cost of what they’re selling for on Amazon, which means that even after the company’s referral fees you can still make a nice profit.

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However, as you can imagine, this strategy is really hard to scale and there will likely be a cap on how much profit you can make. 

Wholesale 

For those who have a little more money to invest, you may want to consider buying products from a wholesale supplier, or straight from the manufacturer. These types of suppliers sell products at much cheaper prices than retailers, which means you’ll enjoy much better margins.

The downside is that generally, you’ll have to buy in bulk. Even when purchasing the minimum amount allowed by suppliers, orders can still be very expensive, and to get the best price per product, you need to place a larger order. This means that if you’re going to go the wholesale route, you need to be confident you can sell the products on Amazon once you purchase them.

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Pieces of advice for wholesale:

  • Try not to purchase too much inventory right away. Test your product first. If it sells fast, place a bigger order to cut down on the per-product cost. 

  • If you have trouble moving your stuff, get rid of it at cost and move on to something more profitable.

Private Label 

The last option is to create your own private label products to sell on Amazon. This is when you actually create your very own custom products, either by rebranding an existing product, putting a new spin on an established product, or coming up with something completely original.

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This may sound like a lot of work, but it’s actually easier than you might think. The best strategy is to find popular products on Amazon that have low competition. AMZScout PRO for Google Chrome can help with this and will quickly identify products that have the potential to be profitable.

  • Use AMZScout tools to find good product niches

  • Check reviews of products in the niche. What are people complaining about? 

  • Come up with a better design or a way to improve product quality 

  • Think about creating a set of items.

  • Consider unique product packaging to differentiate your product from competitors.

Creating your own private label product is a lot of work, but when it comes to making money on Amazon, this has the chance to be the most profitable.

Fulfillment options when selling on Amazon

Once you have a product to sell, the next thing you need to think about is how you’re going to ship that product to your customers. There are a couple of different choices.

Make money FBA

For most sellers, Amazon fulfillment is likely going to be the best option. Packaging and shipping orders can be a lot of work, and as you start to sell more products there’s a chance you’ll have trouble keeping up with orders. This can lead to delays in shipping, unhappy customers, poor reviews, and lost sales. 

Unless you have the experience and resources to ship large amounts of items quickly, leave this side of the business to the pros. The fees Amazon charges for the FBA program

Product research

It’s very important to thoroughly research the market and identify a product that is in high demand, has a good margin, and its niche is not saturated on Amazon. 

When conducting product research on Amazon, it can be time-consuming and prone to human error. A single miscalculation could put a huge dent in profits and significantly hinder your business. To avoid this, you can use AMZScout. It has a potential score indicator that helps you see whether a niche is high potential or not. This indicator takes into account many parameters, including important signs of a profitable product such as:

1. High demand

are more than reasonable, and it will give you peace of mind that your products will always get to your customers safely and on time.

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The amount of average monthly sales you should look for depend on the product price, the category, the number of competitors, your profit goals and other factors. In general, average sales of 200 is not bad, but it’s better to look for a niche with average sales close to 1,000 or above. 

2. Good margin

With the AMZScout Pro extension for Chrome, you can check estimated revenue figures for any product niche. This will help you select a product that has high profit potential. Don’t go into the market blindly!

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Again, the choice of niche depends on your profit goals, product and many other factors, although the higher the margin in the niche the better.

3. Growing trend

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Entering a niche that has growing demand is a good idea. Growing demand is associated with lower risk, so if you are selecting between two similar niches, give preference to the growing one.

Check the niche history to identify growing trends and verify your niche idea!

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If you have no idea what to sell, AMZScout’s web app will help you brainstorm new and exciting niche products, with the ability to draw upon 44 advanced filters.

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These help you avoid making a mistake during the first step of the process to becoming an Amazon seller.

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Product sourcing

If you are using FBA, you need to do the following to find your product:

1. Find relevant factories on Alibaba (or any other source) that manufacture such items.

2. Request samples and then commission prototypes to be made.

3. Purchase a barcode.

4. Start manufacturing and ship products to Amazon. 

By the way, AMZScout also contains a button which when clicked helps you source a product directly from Alibaba, which contains a whole host of suppliers.

Setting up your seller account

The first step to selling on Amazon, after you have found things to sell, is to set up your seller account. To get started, just head over to the Amazon.com homepage and click the “Sell” link at the top of the page.

Before you sign up for your account, you’ll need to decide whether you’re going to be an Individual Seller or a Professional Seller. A lot of people ask us, “how much does it cost to sell on Amazon?” Here’s where you get your answer.

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To complete the rest of the account setup process, you’ll need to give Amazon your legal business name, address, contact information, email address, an internationally chargeable credit card, and your tax ID information. Amazon will also call you during the process to confirm your information, so be sure to have your phone nearby!

Once your account is set up, you’re ready to start selling on Amazon.

Product launch on the marketplace

So, you have your Amazon seller account, you have your product, and you have a way to fulfill your orders. Now it’s time to create a listing and start selling. 

To get started, log into your seller account, and under inventory click “Add a Product”. Make sure you have all of your product information on hand. Amazon will ask for your product name, brand/manufacturer, shape, size, color, package quantity and more. 

Once all this is filled in, it’s time to decide how much you’d like to sell your product for. This includes the cost for you to purchase your product, the cost to have the product shipped to you from the supplier or manufacturer, and any Amazon fees you might be paying with each sale. Look at what other sellers are offering similar products for. Be competitive, but make sure you leave yourself enough room for a healthy profit.

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Next, you’ll need to write your product description. AMZScout can instantly find top performing keywords to write high converting listings, and discover the best keywords to use for your PPC ads to drive more traffic to your product pages and generate more sales.

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Here are a few tips for writing an effective product description:

  • Keep your title under 200 characters.

  • Keep your product description short and to the point. People have short attention spans, so try to say a lot with as few words as possible.

  • If you need to include a longer description, use bullet points. This helps break text up and makes it easier for customers to quickly digest the information.

  • Focus on benefits, not features. Don’t tell people what your product does, tell them how it’s going to make their life easier or better.

  • Include keywords people might use to search for your products.

Finally, you’ll want to include a few different photos of your product. If you’re selling someone else’s product, you might be able to get some photos from the manufacturer. However, if you’re selling your own product, you’re going to have to take the pictures yourself. Consider hiring a professional photographer for this. High-quality professional images can greatly increase sales, so make sure your images do your product justice.

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Once your listing is complete, click “Save and Finish”. Now you can sit back and wait for the sales to roll in. You’re officially an Amazon individual seller!

FAQ about selling on Amazon

What should you sell on Amazon in 2020?

Whatever you decide to sell, make sure the demand has an upward trend, your selected niche has good margins and the demand is high enough. Also check for any seasonal changes in demand and how much the price has changed within the last year. By using AMZScout, you’ll have no problem identifying hot products to sell on Amazon.

How much money do you need to sell on Amazon?

First, let’s answer the most common question, “how much money do you need to start Amazon FBA?” If a $20 product can be bought for $5 and you want to have an inventory of around 500 items, then including the costs associated with testing and producing your items, you would need around $3,000 to start out with Amazon FBA. However, as we’ll explain later in this article, you can also start out with less money, so don’t worry if you don’t have this amount of cash available. 

Above, we talked about starting on Amazon FBA with $3,000, but you can start out on Amazon with as little as $500 in seed money, which you can use to purchase your inventory. Be sure to thoroughly research the stocks you buy before you go shopping for them! This is because the quickest way to lose money is to buy stock that can’t be sold. 

Check out success stories of our users:

Stick-er-ing with It: How Omar Got Started on Amazon

“If they could do it, why can’t I?”: Rishabh’s story of success on Amazon

David’s Success Story: Zero to $175,000 per Month

How can you start on Amazon with little money?

You can also start on Amazon with no money if you go down the route of retail arbitrage, as you can keep your inventory fairly low and re-invest any profits into purchasing more inventory. There are also options such as drop shipping, in which you don’t purchase any physical stock and only pay once a sale has been made, with a third party shipping the product to the customer. 

How much money can you make with Amazon?

Many people ask “can you really make money selling on Amazon working from home?” The fact is that selling on Amazon will take a lot of hard work, dedication and persistence, and it won’t make you a millionaire overnight. However, once you get going and establish yourself, you can easily start to bring in a decent monthly wage from anywhere between $1,000 to $5,000 a month. As you keep growing, the possibilities are endless and there are sellers who have achieved huge sales numbers and generate millions in revenue. 

What should you sell on Amazon to make money?

Once you are set up and ready, you may be wondering what to sell. Luckily, selecting an item is easier than ever before due to the vast number of tools, such as AMZScout, available to help you conduct your research. In terms of actual items, you might want to start out with solidly built and lightweight products within the selling price range of $10 to $50.  

Which apps can help you earn money on Amazon?

As mentioned above, there are tools out there to help you find the correct product and earn money from Amazon. For example, using the AMZScout Pro extension, you can find profitable products. This simple tool will save you a lot of time on the first step of becoming an Amazon seller. You will be able to check your product idea in no time, see what your competitors do and calculate your future profits and fees.

The AMZScout web application includes a huge product database to brainstorm niche ideas or to spy on competitors. It also helps you discover keywords for your PPC campaigns.  

Apart from these major tools for Amazon sellers, there are some auxiliary tools for advanced sellers. Please check the article “How to automate your Amazon FBA business” for more details.

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2. How to make money on Amazon without selling

Amazon affiliate program

The easiest way to make money on Amazon is to become an Amazon affiliate through their Associates program. With this program, you don’t need to create, source, or sell any of your own products. Instead, you simply refer customers to other people’s products and collect a small commission.

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Signing up with Amazon Associates is free. Once you have an account, you can place affiliate links that contain unique tracking IDs on your website and social media accounts. If someone clicks one of your links and buys something, you can earn up to a 10% commission on the sale.

Unlike becoming an Amazon seller, there’s no upfront cost to joining the Associates program. So if you don’t have a lot of money to invest , this is likely a good option. However, if you really want to succeed, you’re going to need a fairly strong following, either through your website or social media. Remember, you only receive a small portion of the sales, so you need to drive a good amount of traffic to Amazon in order to make money.

Merch by Amazon

Merch by Amazon allows you to design and sell your own t-shirts. It’s free to join and there are no upfront costs. This is a new service offered by the company, but it’s quickly growing and represents another great opportunity to make money on Amazon.

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What makes Merch by Amazon so great is that there’s no need to purchase inventory. All you have to do is create a design, upload it to Amazon, select your colors, and decide on your price. From there, Amazon will do all the work for you. Every time someone purchases one of your shirts, Amazon will print it, pack it, and ship it for you. They’ll even handle customer service for you. You’ll then collect a royalty fee for the purchase.

At this time, Merch by Amazon is available by invite only. To apply, head over to the program’s landing page and fill out the form. Keep in mind the approval process can take up to three months, so if you’re at all interested, consider signing up right away to expedite the process. 

Self-publishing on Amazon Kindle

If you fancy yourself a writer, or have dreams of writing the next great American novel, then you’re in luck. There’s one more way to make money on Amazon, and that’s self-publishing books on Kindle.

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Gone are the days when you needed to be signed by a publisher in order to make money as a writer. Amazon lets you publish your own books on the world’s biggest online bookstore. If you’re able to produce a quality book, and market it correctly, there’s definitely potential to make a lot of money on Amazon this way.

Amazon Flex

If you have your own vehicle as well as an Android or iPhone, you’re all set to become a delivery person for Amazon. Amazon Flex lets you choose when you want to work and be paid $12-15 per hour for doing so, depending on the number of packages to be delivered in a certain period of time. You’ll be delivering anything from  small letter-sized packages to boxes.

Make money Amz Flex

Expect to deliver locally or near a city where you live. Packages are picked up from your nearest Amazon station. To find jobs in your area, you’ll need to download the Amazon Flex app to your mobile device.

Amazon Mechanical Turk

Even as technology continues to advance, there are still many tasks that a human can do more efficiently and accurately. Amazon MTurk is an online work platform allowing to you to get paid for doing simple tasks online.

Make money Amazon MTurk

Tasks can involve anything from simple data entry to transcribing audio or recommending the best image to use for a product. There are thousands of tasks available at any one time. Once you’ve completed a job and the “Requester” approves your work, you can access the money you’ve earned, which you can transfer to your bank account. Bear in mind that payment is not as lucrative as Amazon Flex, with research papers show the median wage being around $2 an hour, and just 4% of workers earning $7.25 or above.

3. Does it make sense to start earning on Amazon?

As you can see, there are plenty of ways to make money on Amazon. Whether you want to become an Amazon affiliate, be an Amazon individual seller, sell t-shirts through Amazon Merch, or self-publish your own books on Amazon Kindle, there is no shortage of opportunities. If you’re willing to put in the time and effort to do it right, there’s no reason why you can’t build a successful Amazon business for yourself.

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