You may have heard that according to Forbes magazine Jeff Bezos, the founder of Amazon is the richest person in the world. It is possible to make money with Amazon, and a lot.
In today's article, we are going to see 4 ways to make money with Amazon in a relatively passive way to generate additional income. Surely more than one of these ways to make money with Amazon surprises you and gives you new investment ideas.
Surely during the confinement due to COVID-19 or even last Christmas, you have spent a lot of money on Amazon. Have you ever stopped to think that it is also possible to make money with Amazon?
In this article we are going to see 4 ways to make money with Amazon, which are the following:
- Invest in Amazon stocks.
- Selling your own products on Amazon.
- Dropshipping or Amazon FBA.
- Membership.
Next, we are going to talk about each of these ways to make money on Amazon in more detail.
4 ways to make money with Amazon
Although there are some more (such as working at Amazon), below we are going to see the 4 main ways to make money with Amazon in a relatively passive way. We will go from the least passive to the most passive.
#1. Invest in Amazon stocks
The first way to make money (although you can also lose it) with Amazon that we are going to address in this article and that is probably the most passive of all is to invest in Amazon shares. This way of making money with Amazon is what has made Jeff Bezos become a billionaire.
As you may recall, in the early 2000s the dot-com bubble burst. This overwhelmed a large part of the ".com" companies, but a few, notably Amazon, were strengthened. This was because it became clear that Amazon had a solid business model with high expansion potential that had nothing to do with all the other dot-coms that did not have a true business model.
Exactly the same has happened during the lockdown in 2020 due to the coronavirus: while many companies from many different sectors lost billions in the stock market and even went bankrupt, Amazon gained them due to the increase in its sales (Amazon Spain, Amazon.com, Amazon Mexico, Amazon Germany, etc.).
Since 2010, Amazon has evolved and grown a lot. So has its stock, as we see in the following graph.
In January 2010, Amazon's stock was trading at about $ 125. Now, 10 years later, it does so at more than $ 2,500. In other words, the stock has appreciated more than 2,000% in 10 years (or, what comes to the same thing, 200% per year on average ).
If we had bought the stock 2 years earlier, in January 2008, then we would have gained 2,600%. Yes, as you hear, 2,600 percent (and there has been the sub-prime crisis in between, which hit the financial markets very severely).
Also, in light of recent results (after the earnings announcement the stock was up 13.5% in a single day, which is outrageous for a blue-chip ) and the fact that Amazon is constantly gaining new customers and therefore, Therefore, market share, it is highly probable that the share price will continue to rise in the coming years.
As if that were not enough, if Amazon decided to distribute dividends in the future, that would increase even more what could be gained from Amazon. That said, remember that companies that do not distribute dividends also see the price of their shares increase, as that means that the company - and, therefore, its shares - are worth more, with which we can make money with Amazon by investing in its shares even if it does not distribute dividends.
Therefore, investing in Amazon is a great way to make money with Amazon.
To buy the stock you have to use the AMZN ticker (the stock is listed on the NASDAQ) and enter that code in your broker. If you want to buy Amazon shares but still don't have a suitable broker for it, I recommend reading the following.
It is important to note that it is currently not possible to acquire fractions of Amazon shares and, if any entity proposes it, you must flee from it since it may be a scam. So if you don't have the $ 2,500 currently required to purchase a single Amazon share, you may need to invest in other companies where the share price is lower.
And if you think that at $ 2,500 Amazon's share is expensive, I would like to refer to Berkshire Hathaway, Warren Buffett's company. When the Berkshire Hathaway stock traded at $ 2,500, everyone said that it was already too expensive and that it could not go higher. However, since January 2018 it has exceeded the $ 300,000 barrier on several occasions. In other words, a single Berkshire share is worth more than a house in many cities.
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#two. Selling your own products on Amazon
The second way to make money with Amazon is probably the most obvious of all, so we will not dwell on it too much.
It is simply about selling your own products on Amazon. The great advantage of doing this is that the number of potential buyers will be much higher if you sell on Amazon than if you simply sell through your own online store, as you will have access to regular Amazon customers.
Also, Amazon will propose ideas to improve your sales and thus you can earn even more money.
The downside is that you will have to take care of absolutely the entire sales process (including shipping and customer service), so it cannot be considered a passive way to make money with Amazon.
#3. Dropshipping, or Amazon FBA
The third way to make money with Amazon is through dropshipping, also known as Amazon FBA for its acronym in English (" Fulfillment by Amazon "). In other words, you as a seller take care of getting the products to Amazon warehouses (in significant quantities), and Amazon takes care of everything else. That is, Amazon is responsible for offering the products on its page, packaging the products individually, shipping them, and customer service. Therefore, it can be said that Amazon takes care of almost everything.
Like everything in life, this service has an additional cost. But people who have experience doing dropshipping with Amazon say that the time and effort you save by delegating these tasks to Amazon (which is much more efficient and cheaper than ourselves with the economies of scale it has) more than compensates for the monthly cost. from service.
Therefore, it can be considered a fairly passive way of making money with Amazon since our job is the same (that is, finding the supplier and getting the wholesale products to Amazon) regardless of the number of units we sell.
If you want to know more about how to make money with Amazon FBA, we recommend the following video (in English) that explains the process in more detail.
#4. Membership
The third way to make money with Amazon is to advertise products sold on Amazon on your website/blog. Well, it doesn't really have to be a web page, it can be your YouTube channel, Facebook, Instagram, etc. Almost any social network and platform is good for making money with Amazon through affiliation (Amazon affiliates)
All you have to do is include a link on your page to Amazon products and if someone buys that product through your link, you will receive an advertising commission. This commission varies depending on the Amazon platform you are redirecting to (eg Amazon.com or Amazon.com) as well as the product sector (eg computing, fishing, car parts, etc.). But as a general rule, you can expect to receive a commission of between 3 and 10% of the sale price of the product, as we see in the following table that can be consulted online by clicking here.
Regarding the way of collecting the commission, there is a lot of flexibility. We can choose between bank transfer, gift card, check, etc. depending on what suits us best.
Let's take an example to understand it better. Let's imagine that Pedro has an adventure travel blog and that he writes an article about how wonderful the backpack was that he used to travel the Inca Trail to reach Machu Picchu on his last trip to Peru. At the end of his article, he advises his readers that they can buy the same backpack through Amazon using a link that he provides. This link carries your affiliate reference, so every time Amazon sells one of those backpacks, Pedro will receive a commission. Let's imagine that the backpack costs € 100 and that 5 readers buy the backpack. At a rate, the more traffic our website has and the more customers we can forward to Amazon, the higher the advertising commission we will receive. commission of 7% (it would be material for outdoor sports), this would mean that Pedro would receive € 35 from Amazon.
It is a way to make money with Amazon quite interesting because everyone wins :
- The reader of the travel blog receives a recommendation of an object that he was looking for completely free (the fact that he buys the product through an affiliate link does not increase his purchase price ) and probably saves a lot of time in his searches.
- The blog owner sees his work rewarded as he will receive a small commission for having written the article. This will allow you to continue creating more valuable content for your readers.
- Amazon makes a sale that might not have otherwise been made as the blog reader might have opted to buy it in a physical store or other online stores.
We say that it is a relatively passive way to make money with Amazon because we simply have to write the article once. In 5 years the article will continue to be available on the internet so if someone buys the product through the affiliate link, the blog owner will receive his commission without having to do any additional work.
In addition, Amazon takes care of absolutely everything, from the sales page to the delivery of the product, passing through the collection of the customer. We only and exclusively have to create a small article (blog), video (YouTube), or post a photo (Facebook, Instagram) with a photo/description of the product and include our affiliate link to the product on Amazon. Simple as that.
Conclusion
In this article, we have seen 4 ways to make money with Amazon, from the most labor-intensive to the most passive.
If you have any questions about some of these 4 ways to make money with Amazon or you just want to share with other readers your own way of making money with Amazon, you just have to leave a comment below. And if you think that this article may be of interest to other people in your environment who may also find it useful to learn how to make money with Amazon, do not hesitate to share it with them. Thank you very much in advance!