It’s no secret that Amazon is a money maker, and it’s natural to want to see how YOU can get a piece of the action. Selling on Amazon is an immensely popular idea, but most people give up before they even get started. There are several methods of selling stuff on Amazon, some of which are easier than others.
Selling Your Own Products
The most obvious way is simply to sell your own products through the Amazon website. You create a “store”, and when you receive an order, you ship out items to the customer. You take care of everything, and Amazon is basically how you generate traffic to your business.
This is great because you are basically using one of the largest companies on the planet to help you get customers. You automatically gain a significant amount of trust with your customer just by selling here, and increase your chances of getting found online many times over.
The major downside to this is that you pay fees for listing your items, and more fees for selling them. If you plan to sell more than 40 items a month, you pay $39.99 a month, plus a percentage of each sale. These fees range from 8% per item up to 45%, but most are about 15%.
It’s also very hard to scale this type of business unless you eventually plan to hire employees. There’s only so much packing and shipping you can do in a day by yourself. Don’t forget gas and time at the post office, and you need a place to store all that inventory!
The next logical step is to use Amazon FBA, or “Fulfilled By Amazon”. This basically means you store your items at Amazon’s facilities, and they help out with a portion of your business. There are various levels of FBA, according to what you want them to help you do.
This is much more scalable than storing and shipping the items yourself. Again, you have now leveraged the resources of one of the most successful companies in the world!
But there are some new downsides to consider once you start selling via FBA.
Now you are paying storage fees according to the volume of items stored at their facilities. If you don’t sell your items fast enough, you’ll also be subject to long term storage fees.
No only that, but you are also going to be subject to even more fees for shipping and handling, return, and customer service. This is seriously going to cut into your margins, meaning you make less per customer order. If you have items that have proven to sell and you are working on scaling, FBA is a wise choice. If you are just getting started and unsure of yourself, due your due diligence.
The drop shipping business model has become extremely popular recently, as a number of companies promoting “How to drop ship” products have started to emerge. It’s generally touted as the easy way to sell stuff on Amazon or Ebay because you don’t have to handle inventory.
That much is true! When you drop ship, a supplier packages and sends out products according to orders YOU receive. They keep inventory, and sell it to you at a certain price. You sell it to your customers at a higher price, and profit off the difference.
However, there’s always more to the story than just let someone else do the work. As usual, there are fees involved. You have may to pay a monthly fee to have access to a network of companies that will sell products at wholesale prices. If you don’t pay that fee, then you may need to actually purchase those items in wholesale, which means you need to buy a large number of products up front, before you’ve proven you can sell them!
To drop ship through Amazon is pretty simple. Once your storefront is created and your inventory sourced, when an order comes in, you place the order with your drop shipper. If everything goes smoothly, you make a profit on each item sold. Minus Amazon fees and vendor fees, that’s your net profit. Handling customer service, returns, and other glitches will depend on where you are sourcing your inventory.
The main downside to this method is going to obviously be the fees associated with straddling two companies. Another, often forgotten downside is brand management. I bought a lamp from Amazon the other day and it came in a Target box. I looked it up on line, and it was 50% cheaper on target with free shipping! Sure, that guy made a profit off me once, but I’ll never shop at his store again, or at least I’ll be sure price compare with Target.
Developing a trusted brand and store can be a challenge if you are leaving bread crumbs like receipts and box labels showing that you are just a middle man.
Affiliate Marketing (The Easy Way)
This is how I make money, and it’s what I believe to be the easiest way to sell on Amazon.
- no inventory
- no storefront
- no fees
- no product sourcing
- no margin calculations
- no limits on which products you promote
How does it work? You create a simple website where that you drive traffic to. Once your website is getting traffic, you can join Amazon’s affiliate program (called Amazon Associates), and start to link to products you see on their website.
You can link to ANY product you want.
If a person that clicks on your link orders anything within 24 hours, you make between 6%-10% of the sale. That may not seem like much, but consider that you don’t have to pay any shipping, storing, or membership fees! That’s straight profit there.
The best thing about this method is that you are not limited to Amazon. There are literally thousands of other companies out there that have affiliate programs too. Some pay up to 75% commissions, and with no 24 hour limit for getting credit for the sale.
In essence, you are a freelance advertiser. The main downside to this is that it does take time to build traffic to your website. But what business doesn’t take time to build a customer base?
Then, once your site is built and getting traffic, it can literally make sales while you are sleeping because there are people buying from around the world in different time zones!
As mentioned above, this is how I earn my living. I work full time online doing this type of affiliate advertising for different companies. You can learn to do exactly what I do by starting your training today.
The same affiliate training center where I learned how to build my first website is now offering free memberships to all beginners. You can create your free account and even start building your first affiliate website for free. I am an active member of the community as well, and will be around if you need any assistance along the way. Just give me a shout inside the members area!