Best 9 Ways to Make Amazon Passive Income
Do you want to make Amazon passive income? If so, Amazon may be a great way to do it.
Everyone knows that Amazon is a powerhouse when it comes to e-commerce. But what you may not know is that Amazon can also be a great way to generate passive income in many different ways.
In this article, I'm going to cover 9 passive income ideas and strategies you can use to earn passive income on Amazon. Some of these are simple and some are more complex, but all of them have the potential to help you create a steady passive income stream and even more than that - get you on your way to financial freedom.
What is passive income?
Before I dive into the strategies, let’s answer a basic question: what is passive income? Passive income is defined as earnings that require little or no effort on behalf of the earner. In other words, it’s money that you make without having to work hours every day for it.
Generally speaking, you'll need to invest a lot of time and money into getting a passive income business setup, but once you have it running you only need to spend a small amount of time to continually generate income.
Is it easy to earn passive income on Amazon?
You bet it is! One of the easiest ways to get started is with Amazon's affiliate program which allows you to earn commission on products that you recommend to people. All you need to do is sign up for the program and then start promoting products. When someone clicks on your link and purchases a product, you'll earn a commission.
In this article, I'll go into more depth on multiple Amazon passive income strategies including drop shipping, retail arbitrage, private labeling, print on demand, and bigger ideas like buying and selling Amazon businesses.
1. Sell physical products through Fulfillment by Amazon (FBA).
One of the simplest ways to make passive income on Amazon is to sell your own products. If you have a physical product that you can ship, you can list it for sale on Amazon and let Amazon handle the fulfillment process for you.
This means that you will only need to worry about creating and marketing your product, and Amazon will take care of everything else.
The most popular way that professional sellers make Amazon passive income is to sell private-label products. Private label products are manufactured by one company but sold and marketed under another company’s brand name.
For example, you could find a generic product on Alibaba.com, have it manufactured, and then sell it on Amazon under your own brand name. This allows you to control the price and quality of the product, and you don’t have to worry about competition from other sellers selling the same product.
How to get started with zero risk
Setting up an Amazon business isn't as easy as it used to be, and many people find it a bit daunting. There's a lot to learn and Amazon Seller Central is a complex system that can be difficult to get your head around.
However, a great way to test the waters is to sell used products. You can sign up for a free individual seller account and start selling right away. If you have any used products lying around that you no longer need, just list them for sale on Amazon!
There is a growing market for used products, as people are becoming more conscious of the environment and the need to recycle.
By selling used products, you can not only make some passive income and gain some experience on the platform, but you can also help to reduce waste and save the planet.
How to get started with a private label brand
As mentioned, it's not for the faint of heart, but it can be incredibly lucrative and fully qualifies as passive income. I set up a private label brand in 2019 in my spare time and within 3 months I was bringing home a profit of more than $3000 per month, all while only spending 2-3 hours per week on the business.
The most important factor here is research. If you do your research ahead of time you'll have much better chances of success.
There is a specific method in 2022/2023 that is working and you'll need to know how to approach it. Please don't just dive in - this isn't 2005 anymore. Amazon is incredibly competitive these days and you are likely to get burned if you don't know how to go about it right.
Essential keyword research tools
Helium10 is one of my favorite keyword research tools. I use it for all my product research and I can't recommend it enough.
I've tried many others including JungleScout and Zon Pilot, but Helium10 has all the tools you'll need to be successful online, plus they provide a FREE training course with a subscription! Talk about value!
You can also join their community and gain incredible insights from the marketplace leaders.
2. Buy an Amazon FBA business
If you want to get started in selling on Amazon, but don't want to go through the hassle of starting from scratch, you can always buy an existing business. This allows you to skip the learning curve and get right to the profits.
Buying an existing Amazon business can be an excellent way to fast-track yourself into the game, but you'll likely need $50,000+ to invest.
If you approach it right and scale the business up to a level of over $100k in revenue per month, you'll attract the attention of Amazon business aggregators.
The objective of Amazon Aggregators is to buy and consolidate private-label brands selling on Amazon. Their aim is to scale and integrate each brand into a larger corporation. Then once they have combined and improved their operations, they can make a 20+ times profit by selling the aggregated brands to a bigger company or through an IPO.
Many Amazon business aggregators are focused on selling higher-value Amazon businesses, so there can be buying opportunities in the low to mid-range of businesses that have good products, good sales performance, and listings with strong brands.
Once you have scaled your business up sufficiently you can turn around and sell it for often times 7-figures or more.
Keys to success
There are plenty of online marketplaces and brokers out there who can help you source the perfect business to buy. I've had personal experience selling businesses with Empire Flippers and Flippa. Both are excellent and it's possible to find great deals on brands that have tons of potential.
Do your research and find one that fits your budget and needs.
3. Sell eBooks with Amazon KDP
Selling ebooks with Amazon Kindle Direct Publishing is one of the best ways to make completely passive income on Amazon.
Using Amazon KDP, you have the option to self-publish your books online and let Amazon take care of the rest. You’ll simply need to upload your book file to Amazon and set a price for it.
Authors can reach a global audience of Kindle readers and have complete control over the publishing process, and it requires very minimal upfront costs.
In addition, KDP offers a wide range of features, including the ability to set your own price, create professional-looking book covers, and promote your book with Amazon marketing tools.
When someone purchases your book, Amazon will take a cut of the proceeds as their commission.
For books sold at prices between $2.99 and $9.99, Amazon charges a base rate of $0.15 per megabyte (MB) for the file size of your Kindle eBook—provided you choose the 70% royalty option (refer to the section below). However, there is a minimum charge of $0.01 for all sales, and delivery fees differ by country. There are no delivery fees associated with books priced either below $2.99 or above $9.99(for which the 35% royalty option applies).
If you're not an author, don't let that stop you from publishing a book. Many publishers hire freelancers or ghostwriters to write their eBooks. This is a great way to get your book published without having to do all the work yourself.
The cost to have a book written by a professional writer ranges anywhere from $300 to $2000, so make sure you factor this into your pricing.
It is possible to make $1000-$2000 of passive income per month from a single book as an unknown author.
Keys to success
First and foremost, it is important to have a well-written and engaging book that will capture the attention of readers. How-to and self-help books are by far the most popular, so consider creating a non-fiction book. It would be helpful to have an extensive marketing campaign that will generate initial interest in the book and will help get the sales going.
4. Sell Kindle print books
Amazon KDP Print books are print-on-demand books that are produced by Amazon when a customer places an order.
This system allows authors to upload their book as a PDF file, select the trim size, interior type, and cover style, and create a listing on Amazon. When someone buys the book, Amazon prints it and ships it to the customer.
If you're an author who wants to sell printed books instead of eBooks, Amazon KDP Print is a great option. The process is simple and straightforward, and you can reach a wide audience of potential buyers through Amazon's massive online marketplace. Plus, because Amazon handles all printing and shipping, you don't have to worry about stocking inventory or fulfilling orders yourself.
If you're looking for an easy way to sell print books, Amazon KDP Print is worth considering.
5. Sell audiobooks on Audible.com
Similar to selling Kindle eBooks, you can also sell audiobooks on Amazon via Audible, a service owned and operated by Amazon.
Audible is a leading provider of audiobooks, with over 150,000 titles available to download. The company has been in business for over 15 years and controls over 41% of the U.S. audiobook market.
If you're an author or narrator, you can sell your audiobooks through Audible and reach a wide audience of listeners. To get started, you'll need to create an Audible account and upload your audiobook files. Once your book is live on the Audible website, customers will be able to purchase and download it. You'll earn a commission on each sale, and will be paid monthly by Audible.
Pricing your audiobook
Retail audiobook pricing goes by the length of the audiobook.
- 1 hour and under: under $7
- 1 to 3 hours: $7 – $10
- 3 to 5 hours: $10 – $20
- 5 to 10 hours: $15 – $25
- 10 to 20 hours: $20 – $30
- 20 hours +: $25 – 35
Over $20 is considered a very high-priced audiobook, so try to price your book competitively.
If you have an existing eBook you could convert it to an audiobook, or if you have the rights to audiobooks from other authors that's a great place to start. You'll want to make sure that any authors are given credit for the work unless specifically agreed in a contract.
As with Kindle eBooks, when someone purchases your audiobook, Amazon will take a commission on the sale price. Fees will vary depending on the category and length, but you should expect to receive roughly 70% of the sales price.
Keys to success
You'll need to consider that creating an audiobook will require a professional voice-over actor who has experience narrating, and the audio should be recorded professionally.
It's worth noting that you don't need to exclusively sell on Audible. You can join a distribution network such as Author’s Republic, Findaway Voices, or Kobo.
Distributors can help you list your audiobook on all the major sales platforms; Audible, Amazon, Apple Books, Nook, and many smaller platforms too.
If you go with ACX you'll receive higher commissions (40%) than using a distributor (25%), but there are many advantages to using a distributor.
Here are some of the services that Author's Republic offers:
- Find an ideal voice for your audiobook quickly and easily through their extensive narrator marketplace
- Make your audiobook available to listeners all over the world
- Distribute to over 50 different retail outlets, library platforms, and music streaming services
- Help you sell your work and ensure that you maximize your earnings
- Support and educate you through every step of the audiobook creation and distribution process
- Protection from intellectual property claims and other legal issues
6. Make money with Amazon's affiliate program
Amazon Associates is an affiliate marketing program that allows content creators, bloggers and podcasters to earn referral fees when customers click on links to products and make a purchase.
The program is free to join, and there are no minimum sales requirements. However, you will only earn money if customers click on your links and make a purchase within 24 hours.
When customers click on your Amazon affiliate links, they will be redirected to Amazon's website, where they can browse and purchase products. If they make a purchase within 24 hours, you will earn a referral fee.
The amount of the referral fee varies depending on the product category, but it typically ranges from 4% to 8%. For example, if you refer a customer to Amazon who purchases a $100 product, you will earn a $4-$8 commission.
Keys to success
While there is no minimum sales requirement for Amazon affiliate marketing, you will need to generate a significant amount of traffic to your own website or blog in order to earn a decent income from the Amazon Associates Program.
This means getting lots of traffic from your social media following or having a website that is highly targeted at a specific niche to get qualified clicks. But it's worth mentioning as an income source, as it could technically be one of many Amazon passive income sources for you!
7. Sell Print on Demand products with Amazon Merch
Amazon Merch is a print-on-demand service that allows you to sell custom-designed t-shirts, hoodies, and other products on Amazon.com. With Merch, there are no upfront costs or minimum order requirements – you simply upload your design, set your price, and Amazon will take care of the rest.
These products are then sold through Amazon, and you will receive a royalty for each sale. When a customer orders one of your products, Amazon will print and ship it directly to them, and you'll earn a commission on every sale.
Merch is a great way to earn Amazon passive income, as once your designs are uploaded, you can (technically) sit back and watch the sales come in. Best of all, you can get started with absolutely no experience or design skills required.
Keys to success
As you can imagine there are hundreds of thousands of other sellers on the marketplace, so it can be a bit challenging to stand out and actually get sales. You'll need to consider promoting or advertising outside of Amazon through social media or other means to get the sales going.
However, the great thing about the Amazon algorithm is that it loves products that sell well. So if you can get off to a good start with plenty of sales, there's a good chance Amazon will keep sending more sales your way with a little maintenance.
If you're looking for a creative way to make money, then Amazon Merch is definitely worth considering. The key to success is to create designs that people will want to buy, so think carefully about your target audience and what kind of product they would be interested in.
9. Retail Arbitrage - Fulfillment by Merchant (FBM)
Retail arbitrage is the process of buying products from retail stores at a discount and then selling them on Amazon for a higher price.
It is a popular way to make passive income, as it requires little start-up capital and can be done entirely online.
Keys to success
The key to success with retail arbitrage is to find products that are in high demand but are being sold at a low price. This requires some research, but there are many online tools that can help you find such products.
By scanning product listings and keeping an eye out for deals, it's possible to find low-priced items that can be sold for a profit on Amazon.
You'll need to register for an individual or professional Amazon seller account and this can take a couple of weeks to get it all set up, so make sure you do this in advance to sourcing products.
Once you have found a product, you simply need to purchase it from the retailer and then list it for sale on Amazon. Because you are selling the product for more than you paid for it, you will most likely make a profit - but keep an eye on Amazon fees! And because Amazon is such a large marketplace, there is always a buyer for every product.
Although the idea of this strategy might be worthwhile it is crucial to note the difficulty in finding profitable opportunities. In addition, brands may report your business for patent claims and counterfeit products, and you'll usually need to provide something close to free two-day shipping to remain competitive.
If none of this puts you off, it's not the most complex business model, and while it takes a bit of time and effort to get started, if done correctly retail arbitrage can be a great way to earn some extra money online with very little money. Who knows, you might even turn it into a successful business!
My Best Tips for Making Passive Income on Amazon
Choose the right product to sell
Choosing the right product to sell on Amazon is one of the most important steps in setting up your business. You'll need to consider what type of product you want to sell, as well as what type of customer you are trying to reach.
The best way to determine if a product is a good fit for Amazon is to download Helium10's Chrome Extension. Using X-Ray you can find out what products are selling the best, and what keywords are getting the most traffic.
The goal is to find a keyword with a good amount of search volume (200 to 2000 searches per month), that is also highly relevant and specific for your product idea. Collect as many of these keywords as you can and then build a listing that contains these keywords. You can also use them in PPC (Pay Per Click) advertising to get sales on those specific searches.
The Amazon algorithm
The algorithm favors products that sell well, so in addition to finding those keywords you want to show up on, you'll need to make sure that your product is well-priced, high quality, and appealing to customers. If you make a good amount of sales when your product is first launched, that looks good in Amazon's eyes and the algorithm will promote your product higher up in the rankings.
Research your competition
Before you start selling on Amazon, it's important to research your competition. This will give you an idea of the type of products that are selling well, as well as what type of prices you'll need to set in order to be competitive.
Most Amazon sellers tend to compete on price, so it's helpful to find spaces in the market where there is not a huge amount of sellers selling the same products from China. You'll just get caught in the pricing trap and find it difficult to move your products.
Amazon is a competitive marketplace, and sellers need all the help they can get to be successful. That's where Helium10 comes in.
Helium10 is a suite of tools designed to help sellers research products, optimize listings, and track their progress. The platform includes a keyword research tool that allows sellers to identify high-volume keywords that they can use to improve their visibility in search results.
Additionally, the listing optimization tool ensures that all of a seller's product listings are compliant with Amazon's guidelines and are optimized for maximum conversion.
Finally, the reporting and analytics tools give sellers the ability to track their progress over time and identify areas where they need to continue to improve. In short, Helium10 is an essential tool for any seller looking to be successful on Amazon.
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Is Amazon passive income real?
Yes, it's completely possible to create multiple streams of income on Amazon and even build your own empire leveraging the tools that Amazon provides.
Can you realistically make money on Amazon?
Many of these ideas can be combined in different ways to provide products, services, and information to your clients or customers.
Even if you already have an existing business, whether it's an online business or not Amazon can help you expand, scale, and grow to levels you never thought possible. It's certainly worked for me!