How to Make Passive Income on Amazon: 5 Proven Ways

By Omar Deryan

Updated 4 September 2022

There’s no better way to make money than making it passively.

And if you’re reading this article, it means that, like me, you’re interested in generating serious passive income.

Selling products on Amazon may become quite passive when done right. However, that’s not the only way to use Amazon for constant income.

In fact, Amazon is an excellent platform for earning passive income because there are so many different ways to do it.

In this guide, I will discuss how to make passive income on Amazon in multiple ways and give you some tips on how to make the most of this passive income stream.

I hope that this blog post helps you start generating some extra cash!

Let’s get started on how to invest in Amazon and earn money.

What Is Passive Income?

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Passive income is a type of earnings derived from providing a product or service that requires little to no ongoing work in order to generate revenue.

Revenue from real estate or rental properties, stock dividends, income from interest payments, and royalties are a few typical examples of passive income.

However, if you are able to sufficiently automate your business, it is also possible for you to make passive income from it.

This can be contrasted with active income, which refers to forms of earnings that require regular effort and maintenance to produce results.

While active income streams often have the potential to be more lucrative, they also require more significant time and effort to maintain.

There are many ways to generate passive income, but one of the most popular is through online marketplaces like Amazon.

By selling profitable products on Amazon, you can earn a commission on each sale that you make without having to put in any additional work. This makes it an ideal platform for those looking to generate income with minimal effort.

Best Ways To Make Passive Income On Amazon

There are a number of ways to make passive income on Amazon. These include:

  • Through Amazon FBA private labeling
  • Amazon affiliate marketing
  • Sell ebooks on Amazon KDP
  • Amazon dropshipping

I will cover each of these ways in more detail.

Through Amazon FBA

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Source: Amazon.com

FBA, or Fulfillment by Amazon, is a program that allows you to sell your products on Amazon and have them fulfilled by the company. This means that you will not have to worry about storing or shipping your products yourself.

Being an e-commerce retailer on Amazon is fantastic since you have access to its enormous consumer base. Additionally, you may benefit from all of the infrastructures that Amazon has already developed such as the same day or free two day shipping.

If customers like your goods, your listings will have a higher ranking on Amazon, and you will inevitably gain greater exposure, which boosts sales.

To get started with FBA, you must create an Amazon seller account and list your products on the Amazon marketplace. Once your products are listed, ship your products to the Amazon warehouse and Amazon will take over and handle all of the fulfillment for you.

You can begin seeing more sales and making money from your business as soon as everything is operational. You will simply need to wait for your commissions to come in for your Amazon FBA passive income.

Since you will still have to manage inventory, client complaints, and shipping products to Amazon, the business will not be completely passive, but it can still be a good, semi-passive one.

You can, however, make the Amazon FBA business even more passive by employing a customer service representative to address queries and resolve problems.

FBA is a great way to make passive income on Amazon because it requires very little work on your part. All you need to do find great products, create the product listings, and Amazon will do the rest.

Amazon affiliate marketing

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Another great way to make passive income on Amazon is through affiliate marketing. With this method, you will promote Amazon products and earn a commission on each sale that you generate.

Generally speaking, they pay very little money per sale as the commission rate is usually between 2% to 6% depending on the product category. But if you have huge traffic, then it becomes very profitable.

Including Amazon affiliate links on your website is a popular affiliate marketing strategy. The majority of people start a blog and publish posts around a specific product they wish to market.

For instance, you might create a review of the product and include affiliate links to make it easy for readers who want to purchase it after reading your review to do so. You can even compare and contrast several products while including affiliate links for each.

One of the most well-known affiliate networks is Amazon Associates, Amazon’s affiliate program. They offer simple prerequisites, practically every product you can think of, and are a highly regarded source for people looking to purchase things, making them particularly suitable for beginners.

To get started with affiliate marketing, you will therefore need to sign up for the Amazon Associates program. Once you have done this, you will be given a unique affiliate link that you can use to promote Amazon products.

When someone clicks on your affiliate link and makes a purchase, you will earn a commission on that sale. The amount of commission you earn will vary depending on the product sold.

Sell ebooks on Amazon KDP

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Source: Amazon.com

If you are a writer, you can also earn passive income, Amazon by selling ebooks through the Kindle Direct Publishing (KDP) program. With this program, you can self-publish your books and earn royalties on each sale.

To get started with KDP, you will need to create an account and submit your book for approval. Once your book is approved, it will be available for sale on the Amazon Kindle store.

When someone purchases your book, you will earn a commission on the sale. The amount of commission that you earn will vary depending on the price of your book.

This is a great option for those who have a passion for writing and want to share their work with the world while making money from it.

Amazon dropshipping

Dropshipping is another great way to make passive income on Amazon. With this method, you will sell products that are shipped directly from the supplier to the customer.

To get started with dropshipping, you will need to find a reliable supplier who is willing to ship products directly to your customers. Once you have found a supplier, you will need to create a listing for the product on Amazon.

When someone purchases the product, the supplier will ship it directly to the customer, and you will earn a commission on the sale.

Dropshipping is a great way to make money online with Amazon because it requires very little work on your part. All you need to do is find a supplier and create a listing for the product, and when someone buys a product, the supplier handles the rest.

Tips for Making Passive Income on Amazon

If you’re interested in making money on Amazon, there are a few things that you should keep in mind to be successful. These include:

Choose the right products to sell

The products you sell will play a big role in your success as an Amazon seller. You’ll want to choose products in high demand that you can source at a low cost.

The challenge in this situation will be locating a distinctive product that can make money. Finding a niche market and creating a product that targets that market may be helpful.

You can find high-demand products by using Amazon’s Best Sellers list. This list shows you the products that are selling the most on Amazon.

You will need to source your product after choosing a marketable item.

This means that you must choose a dependable supplier that will give you the product you require at a cost that will allow you to turn a profit. Prior to making a choice, contact many suppliers to compare their terms and costs.

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Create quality listings

Your product listing is one of the most critical aspects of your business. This is what will convince people to buy your product and generate income for you.

Make sure that your listings are well-written and that they include high-quality photos.

You’ll also want to include keyword-rich titles and descriptions to help your products rank higher in Amazon’s search results. For this, you’ll need to carry out extensive keyword research using keyword research tools.

The more people see your listing, the more likely you are to make a sale and increase your passive income.

Price your products competitively

Pricing is another essential aspect of your Amazon business. You’ll want to make sure that you price your products competitively in order to attract buyers.

For professional sellers, you can use Amazon’s automated pricing tool, Price Checker Pro, to help you price your products competitively.

This tool will compare your prices to the prices of other Amazon sellers and let you know if you’re price is too high or too low. You can also use Amazon’s Best Sellers list to see what prices other sellers are charging for similar products.

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Have a strategy in place

When you’re first starting out, it’s important to have a plan in place. This will help you stay organized and focused as you work to make money on Amazon passively.

Your strategy should include a marketing plan, a sourcing plan, and a pricing plan. These three plans will work together to help you be successful in your Amazon business.

Monitor and optimize your Amazon store

An important tip to making passive money on Amazon is regularly monitoring and optimizing your retail stores. You should track your sales, traffic, and conversion rate.

You can use Amazon’s built-in reporting tools to help you with this. You can also use third-party tools like Sellics or PPC Entourage.

Monitoring and optimizing your retail store will help you identify areas where you can improve your business. This will, in turn, help you make more passive money on Amazon.

Frequently Asked Questions (FAQs)

Does Amazon passive income work?

Yes, Amazon’s passive income program does work. You can make passive income on Amazon by selling products that are in high demand and sourcing them at a low cost.

To be successful, you’ll need to create quality listings, price your products competitively, and have a plan in place. You should also monitor and optimize your store regularly.

Is Selling on Amazon FBA Profitable?

Yes, selling on Amazon FBA can be profitable. Obviously, the profit margin you achieve will rely on the amount of payment you make to your supplier as well as your pricing strategy.

When setting the pricing of your product, take into account the fees associated with your supplier, Amazon FBA, and other analytics services you may employ. With the right mix, you can achieve profitability.

Do I need to be on Amazon FBA to sell on Amazon?

No, you do not have to be an Amazon FBA to sell on Amazon. However, if you are not on the Fulfillment by Amazon program, you will have to handle all the shipping when selling your products.

The shipping fees, storage fee and logistics costs can cut into your profits, so it’s important to factor them into your pricing strategy. If you are more inclined to make money on Amazon somewhat passively, Amazon FBA is the ideal option.

The Bottom Line

There are many different ways to make passive income on Amazon. I have covered some of the most popular methods in this guide, but there’s also other ways such as retail arbitrage, online arbitrage and amazon merch, which aren’t as good as the methods I’ve presented.

Making passive income on Amazon is a great way to earn money with little or no effort. By following the tips above, you can have a successful business.

Now that you know how to make passive income on Amazon, it’s time to get started. With a little hard work, you can be on your way to financial freedom with the Amazon passive income system.

Read my blog on the best products to sell on Amazon FBA to help you choose your products before launching.

 

Omar Deryan

Omar is the Founder of OJ Digital Solutions, an agency helping Amazon sellers 2X their conversion rate by optimizing their product listings. He also speaks 7 languages and has his own website teaching people how to build profitable blogs.

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