If you want to learn how to make passive income with Amazon, you are in the right place.
Amazon is the largest e-commerce business in the world (it has a market cap of around $1.7 trillion as of this writing) and there are some amazing opportunities to make money through the infrastructure that Amazon has put in place.
In this article we are going to cover 9 strategies to generate passive income with Amazon.
There are, of course, the obvious methods that everyone else talks about, like Amazon FBA and affiliate marketing through Amazon Associates (and we will cover both of those in detail below), but I have collected some other cool strategies that no one else is talking about. With that, let's get into it.
Note: If you prefer a condensed version of this article in video format, check out my YouTube video below.
This post may contain affiliate links. If you click on a link and complete a transaction, I may make a small commission at no extra cost to you.
The information contained in this post is for informational purposes only. It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice. You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.
What is Passive Income?
For the uninitiated, let me provide a quick summary of what passive income is.
Passive income is money you receive from an investment, business, or other asset or enterprise that does not require significant effort on your part. Some common examples of passive income include income from interest payments, stock dividends, cash flow from real estate, and royalties.
But you can also generate passive income from a business if you are able to automate the business enough. That's going to be the focus of some of the strategies we discuss below.
Now that we have the introductory stuff out of the way, let's dive into it.
1. Start an Amazon FBA Business
Amazon FBA (which stands for Fulfillment by Amazon), is a well-known method for making money on Amazon.
As a participant in the Amazon FBA program, you are a seller on the Amazon website. What's cool about being an e-commerce seller on Amazon is that you can access the massive customer base that Amazon provides. Not only that, you can also take advantage of all of the infrastructure that Amazon has built already.
Here's what I mean.
Using Amazon FBA lets you operate your business in a much more passive way because Amazon handles all of the “fulfillment” which includes payment processing, storage and delivery of the product, and much of the customer support (including a lot of the refund process).
They also do a lot of your marketing for you. If your product is well-received, it will rank higher in Amazon and you will get naturally get more exposure, which leads to more sales.
You will also have a lot more trust from customers because of the Amazon “halo” effect. People generally have no reservations buying from Amazon because they trust the platform.
In contrast, if a person visits a random website and wants to buy something there, there is a lot more hesitation because they have to put in their credit card info and they generally don't know anything about that website. The fear of getting scammed can drive away a lot of potential business.
So how do you make passive income through Amazon FBA?
In the beginning, you will need to do a lot of work, including finding the right product to sell, getting in touch with manufacturers, making a prototype, selecting the best one, and making arrangements to ship the product to the Amazon warehouse. You will then have to create your product listing and make it attractive and compelling.
As you can imagine, you will need the right analytical tools to evaluate whether a product is going to work. There are a number of fine options out there, but I think Helium 10 (one of the market leaders in the space) is the best.
Using their tool, you can scan across Amazon’s 450 million product database, validate a product category, and narrow down on your niche product loaded with sales potential. They also have keyword research tools to help you get the most traffic and build a powerful listing.
Speaking of listings, they offer listing optimization tools and provide maintenance services that will help protect your listing from fraudsters or hijackers, monitor for profitability, and so one.
If you want to sign up, click below. I have negotiated a deal where you get 50% off the first month or 10% off every month. Use coupon codes RLTFINANCE50 and RLTFINANCE10 to take advantage. Plus you get a 30 day money back guarantee, so there's really no risk.
Ok, so once you have everything up and running, you can start generating sales and getting income from your business. The business won't be completely passive (you will still need to manage inventory, customer issues, etc.), but it can be a solid, semi-passive business. Of course, you can make the business even more passive by hiring a customer support rep to answer questions and handle issues.
There are less passive ways to sell merchandise through Amazon as well, such as Amazon FBM (which stands for Fulfillment by Merchant). But as the name suggests, you are not getting the benefit of Amazon's amazing infrastructure and processes, since you will be handling many of the order fulfillment tasks.
If you want to learn more about how to get started on Amazon FBA, check out Amazon's link to their Amazon FBA site to get a good intro to the specifics.
2. Buy an Amazon FBA Business
If you prefer to skip the work and time needed to establish your own Amazon FBA business, you can short-circuit the process by simply buying an existing one. It is fairly straightforward to do and can actually be far less risky than starting your own business from scratch.
That's because the existing business has already proven itself and is profitable (assuming you buy a profitable business, which you certainly should). It already has one or more products generating income and you already have all of the manufacturing, shipping and other processes tied down.
In addition, many larger Amazon FBA businesses have employees (or at least contractors) who perform key functions for the business. This is great because this will allow you to enjoy a more passive stream of income from the enterprise.
If you want to explore this option more, you can check out Amazon FBA businesses for sale on sites like Flippa.com, Empire Flippers and FE International.
3. Affiliate Marketing with Amazon Associates
Another popular way to generate passive income with Amazon is by becoming an affiliate marketer for Amazon.
What is Affiliate Marketing?
The concept is simple. You are basically a salesperson for a particular product that you want to promote. But instead of knocking on doors or calling people up, you “sell” the product online.
A common method of affiliate marketing is putting affiliate links on your website. Most people create a blog and write articles about a particular product that they want to promote.
For example, you can write up a review about the product and add affiliate links, so that people who are interested in buying it after reading your review can conveniently do so. You can even review and compare multiple products and have affiliate links for each.
If a reader uses your affiliate link to buy the product, you will get a commission. It really is as simple as that. The more people that click on your link and buy stuff through it, the more money you make.
Using Amazon For Affiliate Marketing
Amazon Associates is one of the most popular affiliate programs out there. They are especially well-suited for beginners because they have easy qualifications, carry almost every product you can imagine, and are a highly trusted source for customers wanting to buy stuff.
As we discussed, if you love a particular product and want to write about its benefits on your blog, just drop an amazon affiliate link in your article to the product you are recommending and make money every time someone clicks on the link and buys it.
What's great about Amazon's affiliate program is that it generally tends to have high conversions (because people trust buying through Amazon vs. a link that takes you to a random company's landing page).
But there are drawbacks – their commission rates tend to be pretty low and customers must buy something within 24 hours of clicking on your link for you to get credit for the sale. Plus, you are completely at the mercy of Amazon's policies, which they can change at any time.
That being said, many bloggers love using Amazon affiliate links because they just work and you can basically promote anything with them.
If you want to learn more about how to start a blog and start generating passive income through affiliate marketing, check out my step-by-step article on How to Start a Blog From Scratch.
I cover all of the key areas you need to know, including how to set up your website and most importantly, my best tips for writing great articles, getting traffic to your blog, and monetizing that traffic.
Can I Do Affiliate Marketing If I Don’t Have a Website or Blog?
You can still do Amazon affiliate marketing by putting your affiliate links on other places where you have access to traffic. That could be your social media accounts (e.g. Pinterest, Facebook, YouTube, etc.).
But if you want to make this as passive as possible, you should go the route of setting up a website that gets relevant traffic and then let the traffic do its thing.
4. Buying a Blog that Monetizes Through Amazon Associates
Just like you can buy an Amazon FBA business, you can also buy a blog that specializes in making money through Amazon affiliate links. There are a lot of them and they can generate thousands of dollars a year.
What I love about this strategy is that it can be even more passive than an Amazon FBA business because there is no inventory to manage, no customers to deal with, no suppliers, and no marketing needed.
All you need to do is find a great blog that has high quality content and is generating cash each month. But there are some risks you need to be aware of when buying a blog for passive income.
To learn more, check out my article entitled Buying a Blog for Passive Income: 10 Risks You Can't Ignore.
5. Partner with an expert in Amazon FBA or Amazon Affiliate Marketing
If starting up (or even buying) an Amazon FBA business or Amazon affiliate blogging business seems like too much work, you can choose to partner up with someone who has started these types of businesses before.
There are people who “flip” FBA businesses or affiliate blogs. Basically, they buy an existing business and make improvements to it. They then sell for a profit. Doing this can be expensive and these people may need additional capital to get a deal done.
That's where you can come in – you can be the money person and enjoy 100% passive returns. They do the hard work of finding the right business to flip, buying it and making it better. You collect money on the profits.
Now there is not really an established marketplace for these types of arrangements, so you will need to pound the pavement a bit. You can hang around forums for bloggers or Amazon FBA businesses (Facebook groups that are centered around these businesses work too) and get to know people. Make good relationships and opportunities may pop up.
A Google search for “Amazon FBA forums” should get you started if you are interested in doing this for FBA. Similarly, a Google search for “blogging forums” can lead you to some forums that you can explore if you want to try this with blogging.
6. Funds That Invest in Online Businesses
There are funds that allow you to invest in online businesses, similar to what hedge funds do with regular companies. If you believe in the Amazon FBA business model or the blogging business model, then you can invest in these types of businesses and be eligible to receive a completely passive return on your investment.
Of course, you will need a fair amount of money and may need to be an accredited investor (which basically means you are a millionaire or a very high earner).
If you are interested in learning more about this type of investing, check out Empire Flippers. They have a pretty established process for doing this. You can learn more here.
FE International also seems to have a fund that you may be able to invest in. Check it out here.
7. Sell eBooks Through Amazon KDP
If you prefer to write books rather than blog posts, you can make money by selling your books with Amazon KDP. Amazon has democratized the world of publishing and you don't need your manuscript to be approved by one of the big book publishing houses to sell your books anymore. Just self-publish with Amazon KDP.
The best part is that there is no fee to get started (although Amazon will take a piece of your ongoing sales)
Like with blogging, writing a book is going to take a good amount of work upfront, but once it is finished and you list it on Amazon KDP, you can start earning royalties from the sale of your book. That's super passive. Plus, in my opinion (maybe it's the nerd in me), I think it's just cool to be able to say you are a published author.
If you want a complete guide to making money with eBooks, check out my article: Making Money [Passively] Writing eBooks: A Simple 5-Step Guide.
8. Sell Your Designs Through Merch By Amazon
If you have an artistic streak or just have a creative mind and can come up with snappy slogans, you may be able to make a killing selling your designs or slogans with Merch by Amazon.
Here's how it works.
First, you come up with a design. Then you upload your design to Amazon. Once there, you pick a product and color that will feature your design (it can be a t-shirt, coffee mug, etc.), and add a product description. That's it!
Based on what you provide, Amazon does the rest. They create a product page for you on Amazon and when customers buy your t-shirt or whatever, they handle all of the fulfillment, including production, shipping, and customer service.
The best part is that there is no upfront costs to you and you don't have to worry about inventory or over-production. They only produce the product when someone orders it. This strategy, like many of the others will require some upfront work, but once it's done, the business basically runs on autopilot.
If you want to learn more about Merch by Amazon, check out their site which provides some good info on how to get started.
9. Honorary Mention – Amazon Flex
If you have a vehicle and want to make some extra money on the side, you can also earn through Amazon Flex. Basically, you become a delivery driver for Amazon and get paid. Simple enough, right?
Of course, this is not completely passive income, but you can do this in your spare time without too much fuss.
If you want to learn more, check out the Amazon Flex page here. They're not available in all areas, but they are rapidly expanding throughout the country.
So there you have it – 9 great ways to make passive income with Amazon. Hope this has been helpful and best of luck on your passive income journey.
If you want to learn about more great passive income ideas, check out my ultimate guide to passive income which covers a ton of actionable passive income ideas, including some great low costs option.