How to Make Money on Amazon

Joining Amazon's affiliate program and selling stuff through the Marketplace are both good opportunities to profit from the site's huge retail audience.
Making Money, Personal Finance
how to make money on Amazon

There are many ways to make money on Amazon. You can join the Mechanical Turk program and get paid to do virtual tasks. You can publish an e-book through Kindle or a printed book through the CreateSpace platform. Or you may be able to deliver items through Flex, if the program is available where you live.

Amazon is the top-selling online retailer, according to e-retail magazine Internet Retailer. As such, two money-making opportunities stand out:

  1. Joining Amazon Associates, the company’s affiliate program. Participants link to Amazon products on their blog or social media channel and get a commission based on subsequent sales. Amazon Associates is best for influencers who already promote products.
  2. Selling stuff through Amazon Marketplace, the company’s e-commerce platform. Those looking to start an online business can list products on Amazon Marketplace. It takes an entrepreneurial mind and significant effort to get off the ground. But with the right product, the potential payoff can outweigh the risks.

Here’s what you need to know about both options.

1. Become an Amazon affiliate

Affiliates earn a commission when a visitor to their website clicks a link to an Amazon product and buys it. The visitor must purchase an item within 24 hours or add an item to their cart and purchase it within 89 days. Commissions are typically 1% to 10% of the purchase price, minus shipping, taxes and fees.

To get started in the Amazon Associates program, you’ll need to have a website that meets Amazon’s site requirements. Next, submit an application. If it’s accepted, Amazon requires you to place its affiliate disclosure on your site. The Federal Trade Commission also requires affiliate marketers to clearly disclose their relationship with retailers in posts containing affiliate links. That means affiliates should make all disclaimers easy for readers to find.

Affiliate marketing usually is best if you already have a loyal following. That’s because you’ll have a built-in pool of potential customers who trust your judgment and will be more likely to buy products you recommend.

Succeeding as an affiliate means tailoring products to your audience. Start by thinking about your audience’s needs and why they follow you.

Your success as an affiliate depends on tailoring products to your audience. Start by thinking about your audience’s needs and why it follows you. Or go straight to the source by sending a poll or email asking what kinds of products to include on your site. Then spell out the relevant details in your posts.

Say you run a nature-photography blog for beginners. If you’re linking to a $65 aluminum tripod, you might add, “It’s lightweight and compact, so it’s a good option for hikers. I brought it on my three-day trek through Yosemite and it held up well in rough weather.”

Once you get affiliate links up on your site, focus on getting more traffic to those links to increase your chances of earning money. Frequently publishing content, such as blog or Instagram posts, can help engage existing followers. And it may help your site show up in search engine results, thereby attracting new readers.

To add more affiliate links to your site, consider building a product page that lets you list multiple links. That also gives readers easy access to the items you recommend. Or you might start a series of weekly or seasonal posts in which you review products. It’s also good to experiment with Amazon’s link, button and banner options, which can help highlight the products you recommend.

Track your site’s traffic with a tool like Google Analytics and use Amazon’s affiliate reports. They will help determine if your tactics work or if it’s time change your approach.

2. Sell through Amazon Marketplace

Before you start selling stuff via the Amazon Marketplace, pick a profitable product. To do that, you’ll need to consider the selling costs, such as manufacturing and site fees.

First, check if you’re eligible to sell in your chosen category. Some products, such as auto parts and clothing, require Amazon’s approval before you can list them. Then determine how much it will cost to get your product in customers’ hands. That includes everything from materials and labor to packing, labeling and shipping. You may outsource the shipping, storage and customer service by participating in the Fulfillment by Amazon program. But that will cost you, so weigh the options carefully.

Amazon’s fee structure depends on the type of seller: individual or professional.

Individuals pay 99 cents, plus a referral fee based on the product category, for each item sold. Those selling media goods, such as books, DVDs and video games, also pay variable closing fees for each item sold. Amazon’s shipping rates apply to all individuals’ sales.

Amazon recommends the monthly subscription program for those planning to sell more than 40 items a month.

Professionals pay a $39.99 monthly subscription, a per-item referral fee — which varies by product — and variable closing fees on media items. For these sellers, the site’s shipping rates apply only to media items. They also have access to more product categories than individuals, can offer special promotions, and are eligible for top placement on product detail pages. Amazon recommends the subscription program for those planning to sell more than 40 items a month.

As an individual or professional seller, you’ll likely have to satisfy Amazon’s so-called A-to-z Guarantee. That means you could be on the hook for refunds, including shipping charges, if a customer isn’t satisfied. So it’s a good idea to build some financial breathing room into your business plan. Another important consideration is taxes. As a seller, you’re considered self-employed. So even though Amazon generally calculates the sales tax on items, you’ll likely have to set aside more money to pay estimated quarterly taxes on your income.

Once you know all the costs involved, research prices for similar items. That will help you price items competitively. To maximize your earnings, consider finding a cheaper supplier to save on production costs or using search-engine optimization tactics, such as using relevant search terms throughout your posts, to reach new customers.


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