What you’ll learn
Everyone wants passive income, and although it’s not 100% passive, I’ll share how to make passive income on Amazon.
Earning money by selling best selling products, or wholesale products on Amazon is a great way to increase your current income streams. Hopefully, replace your current method of earning money and make it full time with an Amazon business.
I mean, who doesn’t enjoy making money while sleeping?
Amazon is the world’s leading eCommerce marketplace, so there’s a lot of money hanging in there for any serious-minded sellers to make. However, it would help if you put in upfront work before you can start making a passive income stream.
Table of Contents
- What is passive income?
- Ways to make Amazon passive income
- #1. Buy an existing Amazon FBA business
- #2. Affiliate marketing with Amazon Associates
- #3. Buy an affiliate website
- #4. Sell eBooks through Amazon KDP
- #5. Sell your designs through Merch By Amazon
- #6. Retail Arbitrage
- Frequently asked questions
What is passive income?
As I mentioned, nothing is 100% passive. But if you can automate 80% or even 50% of the entire process while making money, that is the passive income lifestyle many people seek.
By definition, passive income is any money you earn from a business, investment, or enterprise with “little or no effort”.
The common ways to achieve passive income includes the money earned from rental properties, royalties, and stock dividends. If you can automate your business, you can also generate income. Just stay away from scammers wanting $30-50k to create an Amazon account for you and then claiming it as 100% passive Amazon automation.
Ways to make Amazon passive income
Below are some of the cool strategies you can adopt to start making passive income on Amazon.
#1. Buy an existing Amazon FBA business
Buying an existing Amazon FBA business is the easiest method to get start selling on Amazon and running your own Amazon business.
It’s one of best ways to make passive income, because a lot of the initial grunt work can be skipped with establishing the history of the Amazon business and getting traction with listings.
Buying an existing Amazon FBA business is more straightforward and faster than creating a new business and Amazon store from scratch. If the Amazon store or seller account already has established products and is generating continuous income flow, all the operational pieces of the business is set up and plug and play where you come in, work on improving what is already working.
Or on the flip side, buy one where you know you can improve the operations and optimize efficiency to create more value from an existing store.
Additionally, Gorilla size Amazon FBA businesses already have contractors or employees that may come with the business when you purchase. These people are already performing day to day operations as well as other important functions for the business to continue functioning.
Inheriting the business structure will enable you to enjoy a more passive income stream. Look at sites like Empire Flippers, Flippa.com, and FE International to look out for Amazon FBA businesses on sale.
#2. Affiliate marketing with Amazon Associates
Want to learn how to make passive income on Amazon without selling any product? No inventory risk, no liabilities.
Affiliate marketing promotes products from other brands already selling on Amazon and then you earn a small commission if someone makes a purchase on Amazon through your link.
The concept is straightforward. Instead of setting up an Amazon storefront, you insert affiliate links on your own website or social media accounts pointing to the product listings you want to promote.
Someone clicks your link, makes the purchase, and you get 1-3% commission from Amazon. For you to earn a commission, a customer must make payment within 24 hours of clicking your affiliate link.
To make passive income with this method, you have to invest a lot of content, SEO and building links to get your content ranking in Google.
One great benefit of affiliate marketing with Amazon associates is the high conversion rate because online shoppers trust the Amazon marketplace. However, there are also some drawbacks. The low commission, you are at the mercy of Amazon’s policies, as well as navigating Google’s algorithm changes where your site could tank.
#3. Buy an affiliate website
If you don’t know how to build a website, then why not buy one that’s already doing well on the Amazon affiliate program?
Buying one that is already has a passive income stream via Amazon affiliate links is similar to buying an already established Amazon FBA business. There are so many such blogs out there worth thousands of dollars and you can get a head start by buying one that already has traffic and making money with commissions.
The biggest benefit with a website is you only invest in content and the website itself. Not inventory, product development, dealing with running out of stock, listing hijackers, fake China sellers, product quality issues and the list goes on.
#4. Sell eBooks through Amazon KDP
If blogging to make passive income is not your thing, you can sell eBooks through Amazon KDP. Gone are the days when you need the approval of a big publishing house to sell your own books. Amazon has made the process of self-publishing books very easy through Amazon KDP. While there is no fee to start selling eBooks through Amazon KDP, you have to pay the seller fees like FBA sellers.
As with blogging or affiliate marketing, writing books to sell on Amazon KDP requires work upfront. However, you could find a freelancer writer or ghost writer to create the content for you. Then you have the rights to list your book for sale on Amazon KDP. Great way to make passive income on Amazon if the book starts to sell. You will continue to earn passive income as long as people love the book and pay for it, and that’s super passive!
#5. Sell your designs through Merch By Amazon
Another strategy to earn passive income on Amazon is to sell your designs through Merch By Amazon. If you have a creative mind or an artistic streak, selling your slogans or designs with Merch By Amazon will be very easy.
Here’s how the process works.
- Create a unique design
- Upload the design on Amazon through the Amazon Merch portal
- Pick the product (a coffee mug or t-shirt, etc.) and color you will offer your designs on
- Create a merch listing like a regular product listing
Once you submit all these, Amazon will take care of the rest. But it’s just like selling your own products via Amazon FBA. Make sure your listing is optimized, keyword research is good, and you’ll need to run Amazon advertising (PPC) to the listing.
But because Amazon Merch will handle all the printing and shipping, the only think you have to do is make sure the designs don’t infringe on existing trademarks.
Like the affiliate website method to make passive income on Amazon, this strategy won’t incur any big upfront costs. It’s super competitive because there is no upfront cost other than hiring a designer or the time you spend to research designs.
But there’s nothing to stress over shipping, inventory management, or over-production. Selling designs through Merch By Amazon to earn passive income has a lot of work in the beginning, but if you find a winner, it’s one of the most passive once it gets going.
#6. Retail Arbitrage
Retail arbitrage has only one goal: to find cheap products at retail stores (like eBay or Alibaba) that you will resell on Amazon to profit from the price differences.
Generally, the rule is to find products that sell on Amazon for less than the amount it is listed for. While this strategy can be worth your time, energy, and money, it’s important to keep in mind that it can be difficult to source profitable deals.
Plus, a brand may even report your business for intellectual property claims or for selling counterfeit goods.
To successfully pursue retail arbitrage, you have to find products online or from retail stores that are not huge brand names as you will likely be shut down or they will send you a cease and desist letter. It’s not fun to submit a plan of action appeal to get your account reinstated.
But this strategy is still possible and you use keyword research tools, and opportunity explorer tools to research the marketplace for products that will sell.
With Amazon occupying the top spot for online shopping, making passive income is no longer just a dream.
Starting requires an initial effort:
- Decide whether to start a new business or buy an existing one
- Find freelancers who can help with most of the heavy listing like creating images, setting up product listings, writing content
- Finding ways to automate the business as much as possible to truly make passive income on Amazon
To make your business more competitive, efficient, and profitable all year round, use software like Gorilla ROI Amazon data connector to automate time intensive aspects of your business.
The better the tools, the more passive your Amazon business can be. Other tools like keyword research, listing optimization, and product assessment.
Already started earning passive income on Amazon?
Frequently asked questions
How do I make passive income on Amazon?
There are several ways to earn passive income via the Amazon marketplace. The most obvious one is to identify and source a unique product to sell, set up an FBA account for your storefront, and promote your business to reach a wider audience. Once your business starts gaining traction, you can leverage tools or software to optimize and monitor your store. The tools will let you remain relevant and maintain profitability.
Does Amazon’s passive income work?
Making passive income on Amazon is possible. With the Amazon FBA program, once you set up your storefront and have inventory to sell, Amazon will help you handle everything concerning shipping, returns, and customer service. You will earn passive income so long as you have inventory in stock for people to buy.
Can you make a lot of money on Amazon?
You can make money on Amazon if you are an outstanding seller. You can make anything from $1,000 to $1,000,000 or more each month, depending on your strategy. But for a large business, it becomes less passive. Keep it small and a lifestyle business to make passive income from Amazon.
How much money do you need to start selling on Amazon?
You do not need too much startup capital to start earning passive income off the Amazon marketplace. Startup capital is very low and will cover things like inventory costs, shipping fees, restocking fees, and other applicable costs if you want to sell on Amazon, or for other methods like ebooks or affiliate sites, it is the price of the website.
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