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4 Amazon Business Opportunities You Shouldn’t Ignore
By Quiet Light
In 2021, over 65,000 Amazon sellers had over $100,000 in sales—and the number of sellers that surpassed $1 million in sales grew by more than 15%. It’s no surprise that there are some incredible Amazon business opportunities for entrepreneurs who are ready to start an online business.
As an Amazon business owner, you’ll be able to access millions of customers who already use the Amazon platform and leverage Amazon’s credibility to help you succeed. You can also utilize their user-friendly tools to help you build a high-quality business.
In this article, we’ll discuss four different Amazon business opportunities that you can use to build or grow your online business, including:
- Starting an Amazon FBA business
- Selling books on KDP
- Affiliate marketing through the Amazon Associates Program
- Working with the Amazon Delivery Service Partner program
Launching an Amazon FBA business
When it comes to delivering almost anything to your front door, Amazon. But what happens behind the scenes after you click that buy box?
FBA stands for Fulfilled by Amazon. It’s a service that allows business owners to outsource the fulfillment process to Amazon. Businesses send their products to an Amazon fulfillment center. When someone purchases the product, Amazon takes care of picking, packaging, and shipping the package. Amazon also provides customer service and facilitates returns for orders.
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The FBA business model makes it simple for customers to browse through thousands of items without ever clicking out of Amazon’s website. Gone are the days of wandering through ten stores around town only to end up exhausted and frustrated. Now, customers can conveniently look at different products side-by-side before deciding on a final purchase–all without leaving the comfort of their living room.
From an entrepreneurial point of view, FBA is a great way to start a successful, profitable Amazon business. And, you can do so without having to figure out the logistics of storing products in a warehouse or shipping to customers. You get to focus on sourcing products, marketing to customers, and improving the customer experience.
How much money do I need to start an Amazon FBA business?
At first glance, sourcing a product can seem like an expensive undertaking. But you don’t need to be a millionaire to start up a profitable Amazon FBA business. The budgets for successful Amazon FBA businesses vary.
Some sellers start with a $1,000 investment, while others are able to spend $100,000. When you have a large amount of money to invest in your new business, you’ll be able to scale at a quicker pace than you could with a tiger budget. But investing in your business isn’t a one-time event. You could start with a small investment, test the waters, and continue the investment process when you see that the business is profitable.
Lastly, consider how growing your new Amazon FBA business impacts other aspects of your life. Launching an Amazon business involves risk. The wealth of Amazon business opportunities can make you excited to jump in headfirst. But if investing that initial $3,000 requires you to dip into your rent budget for the month, take some time to save back that initial investment before you take the next steps in your business plan.
“Investing in your business isn’t a one-time event.”
A practical guide to starting an Amazon FBA business
What does launching an Amazon FBA business look like? When you start a FBA business, all new Amazon sellers need to:
- Determine their business strategy and budget
- Create an Amazon Seller Account
- Source products
- Market and scale their business
Setting your strategy and budget
It can be tempting to skip over the business strategy sessions and purchase your first product. But close out those Jungle Scout and Alibaba tabs you have open and instead take time to define your business goals. When you know the big picture of what you want to achieve with your new online business, you can put together a strategy to help you reach those goals.
Start by asking yourself whether you will prioritize growth or profitability with an Amazon FBA business. Knowing your business budget can help you answer that question. If you have a large amount of funding available to launch and build a business, focusing on growth could be a great strategy. You might be more comfortable with the idea of sourcing multiple products or not seeing profitability for months.
Working with a smaller budget
However, if you’re starting off with a smaller budget, you can hone in on profitability. Instead of launching an experimental new product, you could answer an existing demand with a product similar to something that is doing well in the current market. Or, you could land somewhere in the middle of these two priorities.
Set aside time in your schedule to define your goals and set your budget. Then, once you know where you want to go and how you’re going to fund those dreams, you’re ready to take the next practical step and log into your Amazon Seller Account.
Setting up your Amazon Seller Account
If you’ve ever bought something on Amazon before, you can use your customer account to start selling your products. Or, you can create a new Amazon seller account.
When you sign up for an Amazon seller account, you’ll need the following information:
- A business email address or an Amazon customer account
- An internationally chargeable credit card
- Your government ID
- Tax information
- Phone number
- A bank account where Amazon can send you the proceeds from your sales
What you can do in Seller Central
After setting up the account, you’ll have access to Amazon Seller Central. You’ll be able to log in and:
- See Amazon sales activity
- Manage your inventory
- Update prices
- Communicate with customers
- Review your account
- Contact Amazon support
- Add new products.
Sourcing your first product
Once you define your business strategy and create your Amazon Seller Account, it’s time to find your product supplier. There are many ways to find a supplier, but the go-to resource when it comes to finding a manufacturer is Alibaba. Alibaba is a platform that allows you to shop through manufacturing partners around the world.
With just a few searches, you’ll have a long list of suppliers for any product you can think of. Look for items that not only match both your quality standard and price requirement. It’s also crucial to future-proof your online business by searching for suppliers you can rely on. This reliability will help you establish a smooth and lasting working relationship.
When you’re navigating Alibaba and looking for a supplier use the following tips to find safe products, negotiate profitable prices, and set clear expectations:
- Search for suppliers (not products!) to help you avoid requesting multiple quotes from the same supplier
- Get quotes from multiple suppliers
- Be specific in your requests
- Set clear due dates
- Get product samples
- Establish contracts or written agreement
You can further vet suppliers by asking how long their company has been in business. It’s also important to ask for defined production lead times and payment terms. If you experience a lack of communication or an unwillingness to answer questions you have, that’s a good sign it’s time to look for a different supplier.
Marketing your newly launched products
After you source your first products and list them via your Amazon Seller Account, it’s time to market your product to customers. There are a variety of marketing strategies for Amazon business owners. However, they should include promotions in two different categories:
- External promotion
- Internal promotion
You’ll focus your marketing strategies both on making your product stand out off of Amazon and on Amazon.
External promotion can include:
- Sharing your product on social media platforms
- Linking to your Amazon product on other websites
- Creating a successful SEO strategy
Focusing on internal promotion means making sure your listing has high-quality photos, getting on the first page of search results, investing in Amazon Pay Per Click (PPC) advertisements, and utilizing the question-and-answer section on your listing.
Successfully launching and marketing a product is only the beginning of your journey as an Amazon FBA business owner. Many Amazon sellers grow their business by launching more products. Some also explore the possibility of selling on multiple marketplaces.
You could consider launching additional products that compliment that product that started it all. Or, you could expand your business by selling products in a totally different category. The possibilities are endless!
Selling products with Kindle Direct Publishing
Kindle Direct Publishing (KDP) is an Amazon service that allows authors to self-publish Kindle eBooks, paperbacks, and hardcover books. Amazon first launched KDP in 2007 alongside their first Kindle readers. Today, millions of writers use KDP to successfully self-publish their work. Between March 2020 and March 2022, the number of authors earning $50,000 or more in royalties increased by 40%.
KDP allows an author to run a successful business by simplifying the publishing process. Direct publishing through Amazon eliminates upfront costs and solves inventory storage issues. This makes it possible for readers around the world to buy your book. When you publish with KDP, you have full rights to the book you create. This is often allowed when you go the traditional publishing house route to sell your book.
What you need to create a profile on Amazon KDP
You only need three things to create a profile on Amazon KDP:
- Author information, which includes your full legal name, the country you reside in, you address, and a phone number
- Bank information so that Amazon can send you electronic royalty payments
- Tax information
After setting up your KDP account, you can publish your first book in a matter of days. After you publish your book with Amazon KDP, you have direct access to your book on Amazon, as well as the ability to create a product detail page.
Royalties for each book you sell via KDP depend on the format of your book and your distribution settings. If you publish a paperback book, KDP offers a 60% fixed royalty rate on books sold on Amazon marketplaces where KDP supports paperback distribution. However, if you enable Expanded Distribution, the royalty is 40% of the book’s list price effective in the distribution channel at the time of purchase minus printing costs.
Uploading any type of book to KDP follows the same three steps:
- Enter book details, such as the title, author name, and ISBN
- Upload and preview the book
- Set the book price and royalty rate
Deciding what kind of books to sell through KDP
When you’re trying to decide what kind of book you want to create to sell on KDP, you might want to start with a product in a niche that matches your interests, passions, or hobbies. If you’re a wine connoisseur, you might be considering a wine tasting journal. If your daily meditation practice has made a difference in your mental health, you could be thinking about a book to help someone start a simple meditation practice.
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But remember that you don’t have to start with a specific niche that reflects what you love. If you’re ready to invest the time and energy, you could discover that there’s an Amazon business opportunity that’s totally out of your comfort zone. Many entrepreneurs find success in markets that don’t seem flashy or intriguing, but serve a true customer need.
Before we explore the different ways that you can find your niche Amazon KDP market, it’s important to understand the two levels of content you can create:
- Low content: Notebooks, planners, or journals
- Medium content: Activity books, puzzle books, coloring books
- High content: Novels, poetry, textbooks, cookbooks, biographies, guide books, etc.
“If you’re ready to invest the time and energy, you could discover that there’s an Amazon business opportunity that’s totally out of your comfort zone.”
Low Content Books
Low-content books have minimal or no content on the interior pages. Usually, the pages are repetitive, such as a line journal. The interior of the book is meant to be filled out by the user.
Low content books are simple to create using online tools like Canva or Book Bolt. While low-content books are simple to create, it’s important to know that the low content book market has become incredibly saturated. This is why you need to conduct product research and discover profitable niches before you design a product and publish it with KDP.
When conducting your market research, ask yourself the following questions:
- What is the demand for this product?
- How much competition am I up against when selling this product?
- What type of royalties will I earn through KDP after launching my book?
Currently, Amazon is discouraging low-content book self-publication through KDP. Typically when you publish a book with KDP, you’re eligible for a free ISBN. That is not the case when publishing low-content books.
Do you need an ISBN?
You can create a low-content book without an ISBN, or use one that you purchase from companies like Bowker or through your local ISBN agency. Without an ISBN, your product isn’t eligible for the “look inside” Amazon feature, which allows customers to take a look between the covers of the book before making their purchase.
Another downside to selling low content books on KDP is that they are not eligible for expanded distribution, which means that Amazon will not make your product available to distributors so booksellers can find your book and order it. This type of product is also not eligible for creating a series.
Despite these disadvantages, creating low-content books on KDP is still relatively easy, free, and risk-free. Once you’ve created your book, it can be a source of passive income for you to grow other aspects of your online business.
Medium content books
A step above low content books, medium content books include products such as coloring books, puzzle books, and activity books. Although launching a medium content book on Amazon’s print on demand service does require more work than creating a journal, that doesn’t mean you have to be an experienced author to be successful.
Just like with low content products, you need to conduct some product research and be ready to learn how to create the interior and cover of a book. You can create medium content books using the same tools you’d use to create low content, including sites like Canva and Book Bolt.
High content books
Although high content books can be challenging to create, the market isn’t nearly as saturated as low or medium content books.
Creating a high content book could be a great Amazon business opportunity for you if you have a book that you’ve already written. The cost associated with self-publishing is much lower than going the traditional publication route, and you could have the satisfaction of seeing your written work in the hands of readers without having to go through the grueling process of pitching your book to publishing houses.
If you want to sell a high content book but don’t want to write it yourself, you also have the option of hiring a ghostwriter through companies such as The Writing Summit, Hot Ghost Writer, and The Urban Writers.
Marketing your books on KDP
Running a successful online business through Amazon KDP doesn’t end when you hit “publish”. After writing a book, it’s time to create some growth strategies and market your book! Amazon KDP offers a variety of marketing tools to, including:
- Author Central, which helps you share up-to-date information about yourself and your books with readers
- Amazon Advertising, where you can purchase ads to promote your books
- Free Promotions, which allows you to make your eBooks available to readers at no cost for a limited time
- Kindle Countdown Deals, which offers limited-time discounts with a countdown timer
- Kindle eBook Pre-order allows customers to read your book as early as a whole year before its publication date
- Buying and Gifting eBooks for Others, a tool that runs social media giveaways, gift your books to readers at events, or send copies to newsletter subscribers
- Learning for Kindle, which allows readers to buy a book they like and lend it to others
- Instant Previews lets you share a link to a free preview of your Kindle book
- Sample Chapters shows portions of your book to potential readers before they buy
Amazon KDP and the suite of marketing tools that you unlock as a self-published author allows you to create bestselling books and create a profitable online business.
Earning money through the Amazon Associates Program
If you have a blog, social media account, or website, the Amazon Associates Program could be a great Amazon business opportunity to monetize traffic. One of the largest affiliate marketing programs in the world, Amazon Affiliates provides a way for you to share about products you love and get paid when your followers take you up on your recommendation.
Let’s say you run a YouTube channel where you teach people how to fix common car problems, and you just created a video teaching how to do an oil change. To create a link with Amazon Affiliates, you utilize a special toolbar at the top of the Amazon website. This tool allows you to create an affiliate link for anything from the oil filters to filter wrenches–and anything in between. Then, you share those affiliate links with your followers.
If someone is interested in a product you recommend in one of your videos, they click your affiliate link. That click gets tracked using cookies, and you get a commission if your follower purchases the product within 24 hours of clicking the link.
When someone clicks over to Amazon to check out a filter you mentioned in a video about changing the oil in your car, they might add more than just that filter to their cart. They might do some gift shopping, pick up a few pantry staples, and splurge on a new phone case. You only recommended the oil filter, but you earn a commission on all of the items in their cart, as long as they complete the purchase within 24 hours of clicking your Amazon associates link.
“Earning money through Amazon Affiliates is a great way to monetize content that you’re already creating for your online business.”
How do you join the Amazon Associates Program?
Ready to start monetizing your content with the Amazon Associates Program? Applying is a simple process, and there are no fees involved with becoming an Amazon Associate. There are also no traffic requirements that your website must meet, so this is a great way to start making money on Amazon even if you’re just in the beginning stages of creating a website or social media channel.
First, you’ll click over to Amazon Associates Central. From there, you’ll need to either create an Amazon account, or log in with your existing credentials. You’ll enter information about the website you’re planning to share your referral links on, then you’ll create your unique store ID, which will be a part of all of your referral links.
What you need to provide
Next, you’ll share about your site and the content you create, and let Amazon know what products you plan to recommend to followers. The final step is to agree to Amazon’s terms and conditions. After you submit your application, Amazon will send you an email confirming your account information.
Once you’ve created an Amazon Affiliates account, you must make three sales in the next 180 days. If you don’t, you have to go through the signup process again. After those initial three sales, Amazon reviews your website to confirm that your site is up to their standards.
The most important quality standard they look for is an Amazon disclaimer on every page of your website. This disclaimer lets people who visit your website know that you’re an Amazon Associate and you can earn money from purchases they make after clicking through the links you share.
How much can I earn by sharing Amazon referral links?
Amazon Affiliates can earn up to 20% in associate commissions from qualifying purchases and programs. This makes becoming an affiliate a great Amazon business opportunity. Although the commission rates for Amazon Associates fluctuate, current rates include:
- 20% commission on Amazon Games
- 10% commission on Luxury beauty, Luxury Stores Beauty, and Amazon Explore
- 5% commission rate on digital music, digital videos, physical music, and Amazon handmade
- 4.5% commission on physical books, kitchen, and automotive products
- 4% commission rate on Amazon Fire devices, Kindle devices, apparel, luggage, jewelry, and accessories
- 3% commission rate on toys, furniture, home improvement, lawn and garden, pet products, headphones, beauty, musical instruments, business supplies, outdoors, tools, sports, baby products, and Amazon coins
- 2.5% commission on PC, PC components, DVD & Blu-Ray
- 2% commission on televisions and digital video games
- 1% commission on Amazon Fresh, physical video games and consoles, grocery, health, and personal care
You can also earn a commission when customers sign up for programs that Amazon offers. For instance, if someone creates an Amazon baby registry through your affiliate links, you earn a $3 commission.
Earning money through Amazon Affiliates is a great way to monetize content that you’re already creating for your online business. Running a successful Amazon Associates account is more than just sharing links to products through your website or social media channels, though. It’s also about following top Amazon trends, getting to know your customer, and sharing products with them that fill a need they’re experiencing.
Working with the Amazon Delivery Service Partner program
In 2018, Amazon launched their Delivery Service Partner program, which helps you build your own delivery business while delivering Amazon packages. The DSP program works with independent contractors who operate between twenty and forty delivery vehicles, delivering packages to customers around the United States.
DSP gives you access to Amazon’s suite of deals to start your business. You’ll work with their network of service providers to get your business off and running. As the business owner, you’ll recruit and retain delivery drivers who enable the success of your DSP business. Because you own the business, you also get to create a team culture. If your team delivers great customer service, you get more opportunities to hire a bigger crew and deliver more packages, growing your business.
Becoming an Amazon Delivery Service Partner
If you’re interested in becoming a DSP owner, you’ll need to take the following three steps to start the process:
- Determine whether or not Amazon is accepting applications in your area by browsing through their current openings
- Watch a seven-minute application webinar and read through Amazon’s resume and application tips
- Create an Amazon account and submit your DSP application
How does Amazon help your DSP business succeed?
Amazon Delivery Service Partners get access to the best prices on Amazon-branded vehicles, insurance, handheld devices, and additional services to help your delivery business get started.
You’ll also receive two weeks of hands-on training to make sure you know the ins and outs of the business. The training starts with a one-week virtual classroom introduction to Amazon. Then, you’ll spend a week working with a community of DSP business owners who know what makes for a successful delivery fleet.
Once you’re ready to get started, Amazon provides tools and technology to run your business, including daily processes to ensure smooth operations. After you launch your DSP business, you still receive ongoing support from Amazon, which includes operation manuals, driver assistance for issues you experience on the road, and a dedicated business coach to help you meet your business goals.
“If your team delivers great customer service, you get more opportunities to hire a bigger crew and deliver more packages, growing your business.”
You might be exploring Amazon business opportunities because you want to launch a new career. Or, you could just want to make a little money on the side. Either way, becoming an online business owner can help you reach both your personal and business goals.
By learning more about the different options available to you when launching an Amazon business, knowing about Amazon’s requirements and regulations, and discovering how to source a successful product, you can increase your chances of creating a successful, profitable, and fun online business.
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