Amazon business opportunities need not be limited to simply starting an online store, stocking mass-produced products, and selling them. A number of other options exist for selling on Amazon, and you can profit from selling services as much as products.
In this article, we’ll take a brief look at five options for Amazon business ideas and how much you can expect to earn from each, plus what fees to prepare for and what you’ll need to get started.
1. Private Labeling
Private labeling refers to obtaining products from a third-party manufacturer and then selling them under your own brand name. Working with manufacturers in this way gives you some control over production and pricing, but also makes you dependent on your business partners and more vulnerable to quality control issues.
In 2023, private labeling was the most commonly used business model for selling on Amazon, with 54% of all sellers using this method. Private labeling had over double the popularity of the wholesale business model, in which sellers buy stock in quantity from brands or distributors, and then sell them on Amazon. Most private label sellers on Amazon source their products from China. If you choose to take this route as well, prepare by reading our guide on how to import from China.
Average earnings: $500–$5,000+ per month
Fees:
- Seller fee: 99 cents per item sold on the Individual plan OR $39.99 per month on the Professional plan
- Referral fee: Depends on item category and selling price. Most items incur an 8%–15% referral fee
- Fulfillment fees: Depends on your chosen fulfillment method:
- Fulfillment by Amazon (FBA): FBA storage fees + FBA fulfillment fees
- Fulfillment by Merchant (FBM): Your own independent fulfillment fees
- Seller-fulfilled Prime (SFP): Your own independent fulfillment fees + 2%
How to get started: Create and configure an Amazon Seller Central account; enroll your brand in the Amazon Brand Registry.
2. Arbitrage
Retail arbitrage simply refers to buying products at as low a price as possible, and then reselling them with a markup and profiting from the price difference. The old business advice to “buy low and sell high” essentially describes arbitrage. It is a relatively simple way to start a business and start making money, and it can be done just as effectively (or more so) online via Amazon as in a physical store.
While online arbitrage is a good way to get started and gain some experience with retail and ecommerce, it’s not the most profitable business idea. More than 50% of Amazon arbitrage sellers reported making less than $5,000 per month, with a quarter earning less than $500. Amazon’s fees will also take another bite out of your profits. However, if you want to quickly get started with an Amazon business and you don’t mind starting slow, arbitrage is a viable option.
Average earnings: $1,000–$5,000 per month
Fees:
- Seller fee: 99 cents–$39.99 per month
- Referral fee: Depends on item category and selling price; fees range from 8%–45%.
- Fulfillment fees: Depends on your chosen fulfillment method:
- FBA: FBA storage fees + FBA fulfillment fees
- FBM: Your own independent fulfillment fees
- SFP: Your own independent fulfillment fees + 2%
How to get started: Create and configure an Amazon Seller Central account; learn the Seller Code of Conduct and other policies.
3. Selling Handmade Products
While acquiring and selling mass-produced products is a time-tested way to make money online, handcrafted items can be lucrative as well—as evidenced by the popularity of selling on Etsy. The global market for handmade items is estimated to exceed $1.3 trillion by 2028. In the US alone, the figure is expected to be greater than $460 billion by 2028.
If selling handcrafted items seems like a viable Amazon business opportunity for you, you’ll want to join Amazon Handmade, a platform that connects sellers of handmade items to a global marketplace. Amazon charges a greater number of fees than other platforms like Etsy, but a third of sellers on Amazon still rake in profit margins of over 20 percent—and 61% of sellers make over $1,000 in sales per month. To maximize your visibility and potential profit, it’s best to focus on creating handmade items for a niche market that you know well, rather than trying to create mass-appeal items for everyone.
Buyers browsing handmade items for sale on Amazon will find them grouped into several categories. (Source: Amazon)
Average earnings: $1,000–$25,000 per month
Fees:
- Seller fee: Professional selling account at $39.99 per month; fee will be waived if your application is approved
- Referral fee: 15%
- Fulfillment fees: Depends on your chosen fulfillment method:
- FBA: FBA storage fees + FBA fulfillment fees
- FBM: Your own independent fulfillment fees
- SFP: Your own independent fulfillment fees + 2%
How to get started: Apply on the Amazon Handmade platform.
4. Influencer Affiliate Marketing
There are other options for making money via Amazon than just starting an online store and selling products. You can also go with the affiliate marketing route. This is when individuals such as bloggers promote certain products online, usually for a commission. Influencer affiliate marketing takes this up a notch by also providing a testimonial and a call to action for viewers. The influencer leverages their popularity to convince their followers to give the product or service a try; the greater the influencer’s popularity, the more likely it is for many of their followers to buy.
Affiliate marketing is an effective strategy; in 2021, it accounted for 16% of all ecommerce sales in the US and Canada. For Amazon purchases in particular, whenever a customer buys items by going through affiliate links provided by an influencer, the influencer receives up to 15 percent of the sale amount.
Average earnings: Up to $20,000 per month, depending on how many referrals you generate
Fees: None
How to get started: Once you have a significant social media following, sign up for the Amazon affiliate marketing program or the Amazon Influencer Program.
5. Dropshipping
Dropshipping is when a retailer sells products to customers, but without maintaining an inventory. The retailer does this by forwarding customer orders to a third-party manufacturer or wholesaler who then fulfills the orders as they come in, and delivers the products to the customers.
Amazon recommends considering several criteria when choosing a dropshipping supplier: pricing, location, shipping time, and more. (Source: Amazon)
Dropshipping has long been a favorite business model for entrepreneurs, as it avoids the expenses and hassles of maintaining an inventory and allows for a high amount of flexibility. This business model is perfectly viable online, such as by dropshipping on Amazon. Globally, the dropshipping market size is expected to reach over $476 billion in value by 2026; on Amazon alone, dropshippers fulfill about a third of all sales.
Average earnings: $1,000–$50,000 per month
Fees:
- Seller fee: 99 cents–$39.99 per month
- Referral fee: 8%–15% depending on product category
- Fulfillment fees: Depends on your chosen fulfillment method:
- FBA: FBA storage fees + FBA fulfillment fees
- FBM: Your own independent fulfillment fees. Note that dropshipping suppliers will charge you their own additional fees for fulfillment and shipping.
- SFP: Your own independent fulfillment fees + 2%
How to get started: Create an Amazon seller account; learn Amazon’s dropshipping policy; find a supplier.
Frequently Asked Questions (FAQs)
Click through the following sections to learn more about what Amazon businesses and selling opportunities are best for you.
This depends on how much profit you’re aiming for, the investment of time and effort you’re ready to make, and the fees you’re willing to pay. For easier, lower-investment options with smaller rewards, try dropshipping or retail arbitrage on Amazon. Selling handmade items will require more effort, but can yield more profit. If you have a social media following, consider affiliate marketing.
The easiest possible thing to sell would be products made by someone else such as a third-party manufacturer or wholesaler. If you want to try this approach, Amazon dropshipping or private labeling might work for you.
In some ways, it’s easier than starting a retail business with a physical location. With an Amazon business, you won’t need as much physical space, your overhead costs will be lower, and you can often work from any location. Amazon business opportunities also tend to be fairly simple, and you can often start making money quickly.
Bottom Line
There are ways to make money on Amazon besides obtaining the best items and selling them. Examine our picks for Amazon business ideas, decide how much you want from them and how much you’re willing to put in, and choose the best option to start your online business.
