30 May Guide on How To Make And Save Money On Amazon Part One
We all know how to shop on Amazon, right? But how many of us know how to save money or even better, make money from Amazon? Well, carry on reading and I’ll explain both. I’ve only recently joined the Amazon shopping frenzy. Once I purchased my first item that was it, I was hooked. Unfortunately, the exciting feeling continued — and I still spend way too much money on impulsive buys. Don’t get me wrong, I love to walk round the shops, meet friends, have a coffee and a look at all the bargains in the shop, but sometimes, it’s nice to have the convenience of ordering from home and wait for your item to be delivered to your front door within 24 hours.
However, there are ways I’m redeeming myself — or at least justifying my spending…
12 Ways To Make Money On Amazon
Ready to start making money instead of spending it? Here are 12 ways you can make money online through Amazon.
1. Sell Almost Anything on Amazon
Have you got some products that need selling’? Let Amazon customers take a look. Listing items on the platform as a third-party seller can help you reach more potential customers — in the UK we’re talking more than 25.9 million unique visitors each month. Here are a few examples of items you can start selling:
• Those stacks of books collecting dust in your home.
• Private-label products,(my link) (see paragraph … for more details) which are generic products you resell with your own unique packaging and logo.
• Clearance items, eBay deals and Craigslist freebies you’ve hunted down. (This is a practice known as retail arbitrage (for more details see below under chapter Arbitrage but basically it’s purchasing a product and reselling it for a higher price.)
• Collectable toys you’ve found at second-hand stores and antique shops.
• New clothes you’ve purchased off clearance racks.
Amazon offers a complete list of selling categories Some categories require approval, so you’ll have to submit your request to list, then hang tight for about three business days until Amazon gets back to you. There are fees to sell on Amazon. Amazon sellers can choose between two selling plans:
With the individual plan, you’re charged £0.75p fee per product sold.
The professional selling plan costs £25 a month, and it offers a few more perks, including the ability to sell in the five EU marketplaces – The UK, France, Germany, Italy and Spain and can manage all your listings and inventory in Europe. You’ll also have access to more selling categories, including automotive, business, collectible coins, fashion jewellery, luggage or video categories — to name a few. If you’re operating under the individual plan, you can’t sell these products.
Using the professional selling plan also cuts out that per-product fee, so if you’re selling more than 35 items a month, it’ll be worth subscribing.
For each plan, there are other fees involved as well including referral fees, closing fees and shipping fees.
To start selling on Amazon, create a Seller Central (Check affiliate) account. It’ll walk you through the listing process. How much money you make selling on Amazon depends on how much you invest in your products upfront, how much you list these products for and how many products you sell. You’ll also need to take the fees into consideration.
Private label Rights
You’re probably already a fan of Amazon as a consumer, since it makes it easy and affordable to order the items you need. But have you considered how to turn Amazon into your business partner? It’s possible to make hundreds or thousands of pounds a month by selling private-label products. Before diving in though, it’s important to understand this isn’t a get-rich-quick strategy.
It takes diligence, patience and a willingness to see an idea through from start to finish. To be most successful, set your expectations accordingly. Wait… What Is Private Label on Amazon, Exactly?
Essentially, selling private-label products involves finding generic products that are already selling well on Amazon, creating your own packaging and logo and marketing them better than your competition. Sounds appealing? Let’s break it down step by step for an actionable look at how to build your own private-label business.
Step 1: Research and Select a Product
This is arguably the most important and time-consuming step in the process, but the friendly folks at Amazon lighten the burden a bit by pointing you in the right direction. That’s because the site releases detailed lists of their best-selling products. While the lists are designed to give consumers a chance to see what’s popular, you can use them to your advantage, too. The best-seller rankings essentially serve as your pre-market product research. Instead of developing a product and then testing to see if it sells well, you can start by seeing if the product sells well and then make a decision regarding whether or not you want to pursue it. When looking through Amazon’s top-100 rankings for each category, be on the lookout for items that are lightweight, high-ranking and generic.
Generic refers to something like a water bottle, silicone spatula or flashlight — all items that can easily be produced with your own brand and packaging. In other words, you wouldn’t want to select a product that’s brand-driven — such as an iPhone or Nike running shoes — because those are protected products that can’t be private labelled.
Once you find a product that you’re interested in, it’s time for phase two of the product research stage.
Check Out the Competition
During this phase, study your competition to see how they’re doing. For example, let’s say the product you’ve honed in on is an insulated water bottle. While you might know from the top-100 rankings one insulated water bottle brand sells well, you need to learn more about the competitive landscape. Using the search box at the top of Amazon, run a query for “insulated water bottle” and review the results. Open up the first five listings and record the following information in a spreadsheet: price, number of reviews, Amazon best-sellers rank and quality of listing. The latter point is discretionary, but after doing some research, you’ll quickly be able to tell the difference between a good listing and a bad one. Using the information you gather from these five listings, which serve as your sample of the marketplace, determine whether the opportunity is worth pursuing.
Ideally, you want to see the following in your spreadsheet:
An average price point between £10 and £70.
Low numbers of reviews (though a higher number isn’t a deal-breaker).
The majority of the best-sellers ranks below 1,000.
Average or low-quality listings.
Don’t be afraid if you can’t find a product right away. It usually takes hours of research to find an opportunity which will work. However, let’s say your research for insulated water bottles met all of these requirements. Now you’re ready to find a supplier.
Step 2: Find and Contact a Supplier
Once you know you have a good product opportunity, it’s time to find a supplier. While it’s possible — depending on the product — you could find a supplier in the UK although it’s highly unlikely that you’ll find a cost-effective one. Trust me on this one and head over to Alibaba (My affiliate link) to look for an international supplier. Start your supplier search by entering the same key phrase into the Alibaba search box. In this case, a simple search of “insulated water bottle” will give you thousands of different products and suppliers. Find the style you’re looking for and research a few different suppliers. Depending on how thorough their listings are, you can usually see the required minimum order quantity (MOQ), price range, style options, lead time and whether they allow for private labelling. However, you’ll need to email the supplier to get an accurate quote for your order. I’ve found suppliers are willing to negotiate, even on your first order. While they may claim their MOQ is 500 or 1,000 units, it’s entirely possible to talk them down to, say, 250 or 300 units. Generally, there’s also room for negotiating prices. Just act confidently and pretend you’ve been there before — even if you haven’t!
Step 3: Get Your Logo, Design and Packaging
To save time and streamline the process, you can often work on step three alongside step two. Once you’ve found a supplier who’s willing to let you private label the product, you have to choose your marketing materials. Don’t worry, though — you don’t have to create them yourself! Use a website like Fiverr or Upwork (affilatre Links) to hire professional designers at competitive prices.
On Fiverr, you simply search for designers and then send them your job proposal. On Upwork (formerly Elance), you’ll actually create a project proposal and have designers bid for your project. I’ve used both sites, but prefer Upwork for packaging and logo design. Assuming you’ve had time to develop a brand name during this process, you’ll want your designer to create a logo that represents your brand and vibrant packaging that sets it apart from your competitors — the ones listed in your spreadsheet from step one. Once you have your design files, send them over to your supplier and tell them to proceed with your order.
Step 4: Craft a Compelling Listing
Depending on your supplier’s lead time, you could wait anywhere from 10 to 30 days for your shipment to arrive.
Use this time wisely. Start by focusing on your listing. Follow Amazon’s directions and protocol for creating a seller account and then create a listing link for your product.
To create a compelling listing:
Use high quality images.
Clearly explain how the product works.
Describe why it’s valuable.
Highlight what sets it apart from the competition.
While you’ll have to work within the constraints of what Amazon does and does not allow on listings, you should be able to use bolded text and bullet points to accentuate key facts. As you likely noticed during step one, many sellers don’t do a good job with their listings, yet still sell well. Can you imagine how many more units they would sell with descriptive listings? This is your chance to set your product apart and differentiate your brand as knowledgeable and informative.
Step 5: Use Fulfillment by Amazon to Create Passive Income
Join Fulfillment by Amazon If you’re looking for a more hands-off way to sell, the Fulfillment by Amazon program (commonly referred to as FBA) could be for you. It’s similar to the traditional selling program, and you’ll still need to create an account through the Seller Central portal. So why wouldn’t you just opt for the FBA program versus the more traditional sellers program? The fees. If you’re not sure what your best strategy is, Amazon offers an FBA profitability calculator.
Some of you are probably saying, “This whole process doesn’t sound like passive income.” Well, up until now, you may be right. However, assuming you did a thorough job in the previous steps, you’re almost ready to sit back and reap the benefits. Thanks to the Fulfillment by Amazon (FBA) program, you don’t have to manage the monotony of picking, packing and shipping orders.
FBA is great. You ship your products from whoever is making them direct to Amazon, they will store your items in their warehouse until a customer decides to purchase. This is great if you have a lot of inventory but little space.
Once a customer purchases an item, Amazon handles the entire process, from packing and shipping to handling returns and customer service inquiries. Although FBA saves you from logistical pains, it’ll charge you additional fees, including inventory storage fees. Say you have a used book that’s waiting to be sold. If no one buys within 180 days, Amazon will charge you long-term storage fees. Fees vary by size of inventory and time of year. They are typically updated annually, so you’ll want to keep checking.
While FBA takes a small percentage of your profits, it’s well worth it for most sellers. Your shipping costs are included in the fees and your products automatically become eligible for free Prime shipping, which could help you make more sales.
Once you set up your listing and ship your products to the distribution centre, you can be as hands-off as you’d like. When a customer makes a purchase, you don’t even have to lift a finger. Amazon’s fulfillment centers take care of everything, including returns and customer service issues.
Step 6: Make Your First Sale
In any business or industry, the first sale is typically the most difficult to make. You don’t have a reputation or any existing customers, so it can be challenging to convince someone to purchase your product. Many sellers run some sort of sale or discount during a product’s launch. By reducing the price, you lower the customer’s perceived risk and entice them to take a chance on your product. You can also use Amazon’s internal advertising system, which allows you to pay for your product to be listed in relevant on-site searches. This is a great way to increase visibility and attract an initial burst of sales.
Another option is to use Google AdWords to drive traffic to your listing. While AdWords will be more expensive, I tend to generate more sales from it than from other methods. While these are the most common strategies, there are hundreds of other ways to increase sales and traffic. This is where you can get creative and have fun with your product! Or, if everything is working on its own, simply sit back and let the passive income accumulate.
How Much Can You Earn With a Private-Label Amazon Business?
Products that rank within the top 100 in their category often bring in thousands of pounds per day in revenue. Products that rank in the top 500 typically produce hundreds of pounds per day. Even a product in the top 2,000 to 3,000 can earn you a steady supplemental income. Since different types of products have different price points and associated costs, those numbers are estimates.
How Much Does It Cost to Start a Private-Label Business?
It’s difficult to specify the initial investment for your own private-label brand, since it depends on your product. But an idea Say 500 units at a per-unit cost of £3.20. In addition to the £1,600 cost of initial inventory. Say £400 to design packaging and logo, start a website, set up Amazon business account and pay other minor expenses. So let’s say launching our first private-label brand cost about £2,000.
However, I know people who spent only a few hundred pounds getting their first brand off the ground — and also people who spent many thousands.
Look for a healthy profit margin. I like to aim for a per-unit profit margin of at least 50%. It all depends on the product, but there’s a niche for every budget. So in the example above, if you sell for say £15 per item (£7,500) less fess and advertisement (say £1,500) that’s a profit of £4,000.
All you do then is repeat and repeat, find new products etc. You’ll also find that you’ve tried and tested the market, got your brand known and thus can order more than 500 units say 2,00 units at probable £2.50 per unit. Plus after a while, your rankings increase and you’d be able to ask for more money – say £18 per unit. Do you see, all of a sudden the costs come down, price goes up.
2. Retail Arbitrage.
What is retail arbitrafe? Who doesn’t love a good sale? Serious bargain hunters can save a bundle shopping the clearance aisle and watching for damaged or irregular items on store shelves.
The bargain you find could earn you good money with retail arbitrage. Retail arbitrage simply means buying clearance items at retail stores then and reselling them for a higher price. Some people resell items on eBay or Facebook Marketplace and ship directly to the buyer, others use Amazon to pick, pack and ship orders for a small fee.
How Retail Arbitrage Works
1. Get to Know Your Market
Hot ticket items vary by season and even by geographic location. For example, grills and other outdoor items’ prices fall more dramatically in the winter than in the summer.
2. All Clearance Prices Are Not Created Equal
Just because a 4K TV is on clearance at a shop in Coventry, doesn’t mean it’s also on clearance in Birmingham. You can use other areas as a rough guide, but never go crazy trying to find that item just because it was on clearance hundreds of miles away.
3. Price Check Items Before You Decide
Make sure to check [clearance item] prices either via the store’s price-checking machines or the store’s app. Sometimes you can find amazing 90% off deals on an item with a clearance sticker that only says it’s 50% off.
4. Learn Your Store’s Routine
Most retail stores have a routine for clearance markdowns, so get to know when your store marks items down and how much it normally knocks them down. This will help keep you from running to the store every day just to check prices.
3. Work as a Fulfillment/Warehouse Associate
You can opt to work behind the scenes in the fulfillment and operations sector of the business. It seems each day a new Amazon fulfillment center pops up, which means the retailer is consistently looking for part-time and full-time fulfillment/warehouse associates. Often, these jobs require hands-on physical labour. Remember you’ll probably be lifting boxes, operating forklifts and/or retrieving boxes that might be on a high shelf. You must be at least 18 years old to apply and need to have a high school diploma or equivalent. No need to submit a CV — just search fulfillment/warehouse associate positions, and fill out an application.