I’m sure you’re thinking that there can’t be that many ways to earn money through Amazon. Surely it’s just selling stuff right? Well, selling products is the main way, yes. But there are many different ways of selling through Amazon, and you might learn some things that you didn’t know before, things that might change your mind about selling on Amazon. This article will list the many ways in which you can trade on Amazon, and the ways in which you can make money without buying or selling anything.
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How to Make Money on Amazon UK
Selling on Amazon
Lets start with the basics - selling on Amazon.
Amazon users are given a number of options when it comes to selling; you can have a free account or a paid account - you can dispatch your products, or have Amazon dispatch them for you.
And then there are a number of different business models to choose from, including arbitrage and dropshipping.
If you wish to jump to non-selling methods, click here.
Basic Selling Plan
Did you know that you can start selling on Amazon with no upfront fees?
Well, you certainly can - here's how to sell on Amazon without money being paid upfront: Start selling for free with an individual seller account; it’s free to set up and to list products, and you only pay a small per-item fee (around £0.75) when you sell an item, plus a percentage referral fee (depending on the product category).
If you’re not sure whether selling on Amazon is for you, you can easily test the waters without putting up an initial investment.
If you decide that you like it, then you can always upgrade to a Professional Selling Plan later.
Professional Selling Plan
A professional selling plan is ideal for sellers that sell more than 35 items per month. It costs the seller £25/month + VAT but they don’t pay the per-item fee, which means if you sell more than 35 items per month, it works out cheaper than paying the per-item fee with the basic selling plan. With this type of account comes a number of added benefits, including but not limited to, having access to business reports, being eligible for the Buy Box (where the majority of sales are made), and the ability to apply to sell in restricted categories.
FBM – Fulfilled by Merchant
Fulfilment by Merchant, or FBM, means that when a customer orders your product, you have to pack it and post it to them yourself. This gives you more control over your stock and products, but make sure that you meet Amazon’s deadlines for dispatching orders, or you may damage your account health. Listings that are FBM are not eligible for Amazon Prime. This puts your products at a disadvantage against products that are Prime-eligible.
Seller-Fulfilled Prime allows FBM sellers to make their products eligible for Amazon Prime. Prime allows Amazon customers to get free next day delivery, so if you can offer your products with free delivery and can get your product to the customer by the following working day, then you could be eligible for Seller-Fulfilled Prime. Products that are Prime eligible will enjoy a higher number of sales than non-Prime products.
Amazon FBA – Fulfilled by Amazon
If, like myself, you don’t like the idea of packing and posting a bag full of parcels every day, or you don’t have enough spare bedrooms to store all of your stock, then you might consider FBA. Amazon FBA allows sellers to store their inventory at one of Amazon’s many fulfilment centres across the country. When a customer orders one of your products, Amazon pack it and ship it to the customer, and handle most of the customer service. It’s a much more hands-off solution, leaving you with more free time to focus on the big-money tasks, like sourcing your next products or working on your next venture. Of course Amazon don’t do this for free – on top of the normal referral fee, you will also pay a fulfilment fee which is calculated based on the size and weight of the product. It may be cheaper or more expensive than shipping the item yourself, but well worth it in my opinion. On the plus side, FBA products are automatically enrolled for Amazon Prime, meaning you’ll enjoy more sales than a comparable FBM seller.
Arbitrage means buying and selling commodities in different markets, taking advantage of the price difference to make a profit. So retail arbitrage on Amazon essentially means buying from retail stores and then selling on Amazon for a profit. This relies on the products at retail stores being significantly cheaper than on Amazon. Can this be done? Surely most products are a similar price wherever you buy them? Those were my initial thoughts, but you would be surprised at how much customers pay for the type of service that you get with Amazon - it's not uncommon to find a product that sells for 3x the retail price. Also, chain retail stores buy products so cheaply in the first place due to their huge buying power, that they can often give large discounts. The combination of these discounts, with the higher prices you can charge on Amazon, mean that there is good opportunity for profit. Scan products in store using the Amazon Seller app, which will instantly show you the corresponding Amazon product. From here you can do a quick analysis and decide whether to buy or not. Shopping in store usually results in more profitable products due to lower competition from other Amazon sellers.
Online arbitrage works almost the same as retail arbitrage, however rather than shopping in a physical store, you’ll be finding products by shopping online.
The advantage here is that your business can be completely home-based, and you save both money and time by not travelling. At a computer, you also have access to a larger range of analysis tools to help you make better buying decisions. The disadvantage is if you’re out of the house with your full-time job, you may miss deliveries. Competition is slightly higher when shopping for Amazon products online. Once other Amazon sellers discover a good product, they usually sell out fast. All this being said, I still choose online arbitrage as my main business model and it’s working great for me so far. I still scan through products in the shops when I find myself there for other reasons.
Selling Used Books
Selling used books is another form of arbitrage, but it feels like a strategy in itself and therefore deserves its own section. It’s one of the cheapest ways to get started with Amazon selling, and books is one of the main categories that are open to all new sellers. Jeff Bezos himself started out by selling books from his garage, before turning that business into the multi-billion-dollar Amazon that we see today. And Amazon is still a great place to buy and sell books. The reason this strategy works so well is that used books can be purchased so cheaply. Go into a charity shop and you’ll find books for £2 or less. You can purchase books by the box or pallet full on eBay or other second-hand marketplaces, sometimes less than £0.10 per book. On Amazon, the right book could sell upwards of £10. For this strategy I recommend non-fiction books rather than fiction books, which usually don’t sell for much. If you’re lucky, you may even stumble upon a rare first edition that could be worth upwards of £100.
If you have the finances to be able to purchase products in larger quantities, then you can often achieve the best purchase prices by going directly to wholesalers. Wholesalers are the middlemen between the manufacturers and the retailers, meaning that they purchase in huge quantities for a fraction of the retail price. They then sell on the products in smaller quantities to retailers and resellers. Wholesalers will often have a minimum order quantity (MOQ) for each product, or a minimum spend per order.
A private label product is basically a brand-new product that you design and have manufactured – it will bear your brand name and logo. The process involves finding a product that sells well on Amazon, redesigning or improving it, and adding your branding. You then work directly with a manufacturer to have the product produced. Like wholesale, you will have to order a large quantity of this product, so it does require more upfront investment. This strategy allows you to build your brand from the start. However, it is one of the most expensive business models to get started with. It has been done for under £2,000, but realistically I think you’d be looking at £3,000-10,000 to launch your first product.
Technically also a form of arbitrage, dropshipping allows the seller to sell products to customers without ever having previously handled the product. First, you find a product from a dropshipping supplier that you can make profit from on Amazon, then you list the product on Amazon at a price that is high enough to make a profit (not forgetting delivery fees). When someone purchases your product on Amazon, you then order the product from your supplier to their delivery address, and you pocket the profit. Be sure to first read Amazon’s dropshipping policy, as they are much stricter than other marketplaces and have a list of requirements for dropshippers.
Related post: How to Dropship on eBay UK - 2021 Guide.
How to Make Money on Amazon Without Selling
Amazon Affiliate Marketing
Now we’re onto some of the more unusual ways that Amazon can be used to generate income – firstly, their affiliate programme. Companies sometimes offer a financial incentive to third parties for promoting their products. This incentive is usually a one-off or recurring fee that is paid when a sale is made. This is called affiliate marketing, and Amazon is one of those companies.
So, how to get paid for recommending Amazon products: Sign up to the Amazon Associates Programme, and once accepted, you’ll be able to generate a link to any of Amazon’s product pages to promote on your blog, website or social media. If someone clicks the link and then purchases the product, you earn a commission up to 10% of the sale (percentage varies with category). It gets better still – any purchase made by someone on Amazon within 24 hours of them clicking your link will also generate you a commission.
Amazon’s parcel delivery service, Amazon Flex, uses independent contractors who pick up parcels from the fulfilment centre and deliver them to homes and business. Anyone can be one of these independent contractors, as long as they have a vehicle and a driver’s licence. And it’s so easy to get started. Just download the Amazon Flex app, sign up, and book your first delivery block. It’s completely flexible and you can work when you want. Just book the time slot in advance and you could earn £13-15 per hour.
Amazon KDP - Kindle Direct Publishing
Kindle Direct Publishing allows users to publish an eBook completely free of charge. No need to convince a publisher that your work is worth printing. No upfront costs. No waiting months or even weeks until it hits the shelves. Just upload your book and click publish, and your very own literary masterpiece will be available to a worldwide market on the Kindle Store within 24 hours. And don’t worry if you’re not a creative writer, the demand for informational resources has never been higher. You could write a short book on any area of your expert knowledge.
Amazon Mechanical Turk
Amazon Mechanical Turk is an online marketplace where virtual tasks are outsourced.
As an employer, you can outsource tasks to virtual workers very quickly without having to contract or employ them, and avoiding all of the headaches that come with it.
Sign up as a worker, and you can complete a variety of Human Intelligence Tasks (HITs) on an easy to use system, and get paid per task.
Payment is in US Dollars or Amazon gift card credit, however if you're not based in the US, it's possible to have the balance transferred into your local currency by using a third party service.
Amazon is one of the biggest companies in the world and is known for its disruption of established industries through innovation and mass scale. The above is a list of the current ways to make money through Amazon (that I am aware of). However, I firmly believe that Amazon will continue to disrupt new industries and pioneer new technologies, which can only mean more opportunities for entrepreneurs and small businesses. Keep your eye out for these opportunities, because the ones who get in early are often the ones who benefit from them the most. Watch this space.
Selling on Amazon not for you? Find a list of other awesome side hustle ideas here.