How Sellers Make Money on Amazon

The number of buyers on Amazon keeps growing, but so do the number of sellers.  What are the various strategies for making money on Amazon? Here are several strategies, though not all are recommended.

Private Label – This is when you find a product that already exists, and put your brand/styling on it and resell it on Amazon.  So in this arrangement, you do not create the original product, you just brand it and sell it.  Sometimes people will make changes, so at that point it is not purely “private labeling,” but the end result is pretty similar.  Often times people will import these goods from China, but there are private labeling opportunities in the US as well.

Produce Your Own Product – A little different than private label, because you come up with the product idea and take it to completion from there.

Retail Arbitrage – All resellers including the big box stores like Walmart, Target, Walgreens and the rest, exist because they are buying products at a low price and reselling them at a higher price.  Online resellers have coined the phrase Retail Arbitrage which normally means buying the items at one of these existing retailers and reselling it on Amazon.

Online Arbitrage –  The same principle applies here, buy low and sell high, though the purchase is from an online marketplace to resell on Amazon.com.

Wholesale – The world of retail has businesses called “wholesalers” and “distributors” that act as middle-men for retailers.  So instead of the retailers having to work out agreements and shipping issues with hundreds of various manufacturers, these wholesalers work directly with the manufacturers. Wholesalers often sell products to many different retail businesses.

Direct from Manufacturer – This is when someone buys the product directly from the manufacturer to resale to consumers, with no wholesalers in the middle.

DropShipping – Some sellers will list a product for sale, but not yet have ownership of that product.  For example, they might list a product for sale on a website, and then if a buyer buys it, they go ahead and purchase it from a local or online source and have it shipped to the buyer.

Affiliate Sales – Bringing buyers to a product is a valuable task, so if you can do that, you can earn commissions.  For example, if you have a blog or website that people come to read, you can advertise products on your blog that are sold on Amazon.com.  If users click through from your blog to Amazon and buy the product, you can earn a percentage of the revenue.

Seller Central Forums

Recently a seller asked a question in the Seller Central forums about their account getting suspended for invalid Tax ID.  The seller feels that since they are using an individual seller account instead of a professional selling account, maybe they do not have to provide their Tax ID.

Responders seem to agree that you need to add a Tax ID especially if Amazon is specifically requesting it, and if you are not a business then your Tax ID would be your Social.  It appears the Seller contacted Seller Support multiple times about the issue and have not received a response.  This is likely because an account suspension is usually handled by Seller Performance, and not Seller Support.

 

 

Google Chrome Extension for Amazon Sellers

Our first product is a tool that will help you get through many of your selling tasks faster.  If you are an Amazon Seller and do Retail Arbitrage, Online Arbitrage, Wholesale, Private Label, AZ to AZ Flips…the list could go on…you will want to try out our Google Chrome Extension.  Less clicking, faster analysis, and easier access to information are just a few of the benefits.

I would like to invite you to stay tuned to this blog.  It will not just be one promo post after another.  We plan to offer content and analysis that we think sellers will find helpful.