Passive Income from Amazon!
Generating passive income is probably one of the main concerns for the modern day person living in the current rapidly growing economy. Things will only get tough, if a person depends on only one source of income. Having extra cash flow coming in not only comes in handy in the time of need but it also gives you a sense of freedom in your day to day living.?
In this article we’ll cover how you can make some extra dough by leveraging amazon business.
Why Amazon??
Amazon is the top ecommerce company right now. And by the looks of it, we can see it maintaining it’s top spot for years to come. On top of that, it can also be considered the simplest online business model to generate passive income (and one can also potentially full time on this).?
In our opinion, the rapid growth of Amazon has to do with thousands of sellers as well as the millions of customers on the platform. Just like many other sellers you can also access millions of customers.?
Amazon's third-party sales account for millions of sales each year, which proves that Amazon is a great way to sell products without worrying about traffic, shipping, or customers. If your product works well, Amazon will promote it for you. They will rank you higher on your search engine which will result in more sales on your listing. This is one of the best reasons Amazon is the best place to start selling products.
As long as you maintain this sales generating machine, it will continue to make money for you. If you've ever wanted to be self employed and become financially free, Amazon is your gateway to financial freedom.
Okay, makes sense. Now, how do I sell on Amazon ??
There are many ways you can generate passive income from Amazon. These include selling (no.1 to no.3) or by promoting products on Amazon (no.4). These are potentially the most convenient way to increase your income.
To explain further, the multiple business modules to work with Amazon includes
The modules 1 to 4 allows you the opportunity to either utilize Fulfilment by Amazon “FBA” and Fulfilment by Merchant “FBM”. More on that later.
Nice! Now what’s this Fulfilment By Amazon?
FBA is an abbreviation for "fulfilment by Amazon." FBA is advantageous to sellers because it leverages the power of Amazon's distribution network to support your products.?
With more than 175 Amazon fulfillment centers around the world, you can ship all of your products to Amazon warehouse, where your inventory will be stored, packaged and shipped to your customers.?
The main benefit is that you don't have to mess with the nuts and bolts of shipping products. You can focus on managing other critical business operations while you watch your orders grow with joy.?
Fulfillment By Amazon is your warehouse, manager and shipping agent for a very small amount compared to what you would otherwise have to pay (for a third party warehouse aka 3PL OR if you were to set up your own warehouse).?
Aside from relieving yourself of the stress, your products will automatically qualify for Amazon Prime shipping and Buy Box priority, which will have a huge impact on your overall sales. Seeing the Prime logo is a huge incentive for buyers, as an amazon customer, you can second that.
Woah. Sounds pretty hassle free. Do let me know how this works and where & how do I sign up for FBA?
There are a few steps you need to implement on to sell with FBA:
Locate and procure your product. Using Alibaba or a similar sourcing platform to source inventory that you can then private label with unique branding. This is called FBA Private Label and is a popular way to sell products on Amazon.
You can sign up as an Amazon seller for $39.99 per month and you’ll be given access to Amazon Seller Central.
Do proper product research (to know more, sign up to our blog post) which is to be followed by sourcing the best quality you can find. Place the order and ship your inventory to an Amazon fulfilment center, for it to be distributed on your behalf.
Once the customer makes a purchase through the Amazon platform, Amazon will fulfil the order for you. You can always ship the products yourself to avoid paying additional Amazon fees, but FBA is the most efficient way to sell products on a large scale.
You can make money with Amazon FBA if you can buy products at a lower cost and mark them up. We’ll cover this in our sourcing blog, follow our blog to learn about the best way you source your selected product.
Great. Sounds very convenient. What’s this FBM, and why would anyone opt for it?
Whenever not sure of your technique, invest your energy in sorting out some way to make it work. For instance, if a seller wishes to opt for Amazon FBA, before committing you need to be sure if the selected product will sell well. As It will require some investment for ordering inventory. In this instance, ordering a small inventory at your place and listing it under FBM, will allow you to go about it safely, as you won’t have to stick with it if the product turns out bad.
This also comes in handy if you are already a seller and wish to take your customer handling to the next step by sending out custom orders.?
Regardless of the pros, the biggest con in our humble opinion is that it requires man hours to create order, picking, packing and shipping. It’s useful if you have a proper team, but since you are looking to generate passive income, opting for FBA is more favourable than FBM.
Yo, What about all the modules???
The four modules are explained in detail for you below.?
1- Retail Arbitrage?
You are gonna have to discover items at retail locations for a markdown and afterward flip them on Amazon for a profit. All you need is the flip mindset when discovering products to flip. Watch Gary Vee Flip Youtube Series to tap into that hustle mindset. Man’s a beast.
Example, Joe Hart discovered computer games at Walmart which were selling for $0.03 each. He can simply sell these at a sensible cost and he'll be making a lot of profit.
2- Drop shipping
Similarly, Drop shipping allows you to only buy the item only when an order is placed. At any point you are not holding any inventory. Think of it as working as a broker.?
An improved model with outsourcing is discovering the item at Home Depot that at present sells for $20. You could then rundown that item as Fulfillment by Merchant on Amazon for $40.?
Upon order you can pick up the item yourself and ship it to the customer making $20 per unit.
3- Wholesale
Wholesale is the most common way of connecting with providers to supply the item you are needing to sell. You get the items at a rebate also called the discount cost. You would then be able to sell the item at its suggested retail cost on Amazon.?
It tends to be truly beneficial for you to sell discount items. Envision, discovering the item that pays you $1,000 consistently. The excellence of discount is that you can keep on requesting a similar item over and over from the wholesaler.?
The disadvantage to wholesaling is that it consumes most of the day to track down a discount provider that will work with you. Most wholesalers need to remain stowed away and others would truly prefer not to work with you.
4- Private Label
Private Label is the place where you do extensive product research to find the product that is selling at the moment, you source the best quality, amend it after reading customer reviews. At the end of this process, you’ll have a product which can take over the market share. All you need to do now is come up with a unique brand name and slap it on the product. This will allow you to register your brand with amazon and now all you need to do is manage inventory and advertising. Majority sellers opt for FBA in this module.
5- Affiliate Program
If you are a person with influence on social media and have an engaging audience you can sign up for affiliate programs. All you have to do is share your affiliate link of the product you think your audience will like. If your follower or anyone with that link buys it, you will be paid a certain percentage commission.
Conclusion
Selling on Amazon can potentially make you a truckload of cash when done right. People have had the option to stop their everyday work and exclusively continue selling on Amazon. Nonetheless, you should be aware of the fact that Amazon has all the forces within their modules to help you get that extra dough.
If you are at any point of the process and need consulting, please feel free to reach out and we’ll be glad to help you through the bits and pieces of the Amazon business.