What is passive income?
Passive income is revenue generated with minimal ongoing effort or active involvement.
Unlike active income, which requires constant work to earn money, passive income methods allow you to earn money even when you’re not actively working.
However, it’s essential to note that achieving a truly hands-off passive income usually involves a lot of upfront effort and ongoing maintenance, at least initially.
Though with hard work and persistence, almost anyone can create passive income streams, small and large, by selling on Amazon.
Is Amazon FBA passive income?
Amazon FBA (Fulfillment by Amazon), a service provided by Amazon that handles storage, order fulfillment, and customer service, can be considered a form of semi-passive income. While using Amazon FBA is not completely passive, once you get your business up and running, you can spend less than part-time hours working on your Amazon business – as 64% of sellers do.
While it offers the potential for generating income with less direct involvement compared to traditional retail or active businesses, Amazon FBA is not entirely hands-off.
Setting up an Amazon FBA business requires significant upfront effort. You must source products, negotiate with suppliers, create listings, prepare inventory, market and promote your products, and ensure compliance with Amazon’s guidelines.
Sure, you can outsource lots of this, but when new Amazon sellers are just starting out, it is best to handle all of this on your own to fully understand how running a business on Amazon works.
Many sellers use tools such as Jungle Scout, an all-in-one solution for Amazon sellers to find profitable products, research keywords, build listings, manage inventory, earn more reviews, track sales, and much more.
5 more ways to make passive income with Amazon
Selling physical products on Amazon can be a great way to earn extra income or to grow into a large business, but it is not completely passive. Here are other ways to earn passive (and semi-passive) income using different Amazon programs.
1. Kindle Direct Publishing
If you’re an aspiring author or have a knack for writing, Kindle Direct Publishing (KDP) offers an excellent platform to generate passive income. KDP enables you to publish and sell ebooks on Amazon, reaching a vast global audience.
KDP allows you to publish e-books or paperback books for free, where they’ll be available to the millions of readers who use Kindle readers.
Some of the great things about KDP are there are no to little upfront costs, you don’t need to purchase inventory, and you only pay fees when you make a sale.
Sure, there will be work upfront to create and/or write your books, but once they are uploaded to KDP, you only need to worry about promoting them. As your books become more popular over time, you can watch that passive income roll in.
Steps to succeed with KDP:
- Content creation: Write engaging and well-researched e-books on topics that resonate with your target audience. You can also create low/medium content books.
- Formatting: Format your ebook according to Amazon’s guidelines. Tools like Calibre or hiring a professional formatter can help ensure a polished appearance.
- Cover design: Create an eye-catching and professional ebook cover. Design tools like Canva or hiring a designer can assist in this aspect.
- Keyword Optimization: Craft a keyword-rich book title, description, and relevant keywords to enhance discoverability.
- Pricing strategy: Set an attractive price point that reflects the value of your content and aligns with market expectations.
- Promotion: Leverage social media, author websites, and Amazon’s promotional tools to boost your e-book’s visibility.
2. Amazon Merch on Demand
Amazon Merch on Demand allows you to sell custom-designed merchandise without holding inventory – this is called print on demand (POD).
With POD, you create unique designs for products like t-shirts, mugs, and phone cases, and when a customer places an order, Amazon prints and ships that product on demand.
Similar to KDP, it requires upfront work of creating and uploading your designs to the Amazon Merch on Demand platform. If you are not a designer, you can hire a freelance graphic designer to create high-quality merch designs for your business.
Once you have lots of designs uploaded, all you need to do is promote and wait for the sales to roll in. If you have a popular or trending design, this will be a great way to earn some passive income.
Steps for success with Amazon Merch on Demand:
- Design creation: Develop appealing, niche-specific designs that resonate with your target audience.
- Product selection: Choose the types of products you want to offer your designs on, ensuring they’re popular and in demand. Amazon offers a large selection of POD products to sell.
- Listing creation: Craft compelling product listings with accurate descriptions and high-quality mock-up images of your designs.
- Keyword optimization: Incorporate relevant keywords in your product titles and descriptions to improve Amazon’s search results visibility.
- Promotion: Utilize social media, influencer collaborations, and advertising to increase your product’s exposure.
3. Amazon Associates Program
Did you know that you can earn more by promoting other brands’ products?
Affiliate marketing is another avenue to generate passive income on Amazon. By joining the Amazon Associates program, you can earn a commission for promoting and driving sales to Amazon products through your unique affiliate links.
This can be done using social media or through a niche blog where you often talk about the products you use. Promoting Amazon products on blogs using affiliate links is way more popular than you may think.
For example, if you’ve ever visited a blog looking for a specific recipe, you’ve likely seen this sentence at the top of the post: “This post may contain affiliate links. For more information, please see our affiliate policy.”
Throughout the article, you may see products that link back to Amazon. If you buy, the owner of the blog will earn a commission. With the use of a blog or niche website, the article will live on the internet as long as your site is live, potentially earning you passive income for years to come.
To effectively leverage affiliate marketing:
- Niche selection: Choose a niche that aligns with your expertise or interests and has a range of relevant Amazon products.
- Content creation: Develop a blog, website, or social media platform where you can create valuable content related to your niche.
- Product promotion: Integrate your affiliate links naturally within your content, such as in product reviews, tutorials, or recommendations.
- Audience Engagement: Build a loyal audience through engaging content and authentic recommendations. Address their needs and concerns.
- SEO and keywords: Optimize your content for search engines by incorporating relevant keywords to attract organic traffic.
4. Amazon Influencer Program
If you have a following on social media platforms, you can join Amazon’s Influencer Program, which is a part of Amazon’s affiliate program. This program allows you to create your own Amazon storefront with a personalized URL to recommend products to your followers.
While Amazon does not specify how many followers you need to join the program, it is not much. We’ve seen people get approved for the Influencer Program with just a couple hundred followers.
This program is perfect for those who love to talk about or show off the products they love and use daily – such as fashion, makeup, or tech influencers. Promote the products to your followers, and when one of them purchases, you earn a small commission for the sale.
One of the best ways to promote products and grow a large loyal following is through TikTok.
With the Amazon Influencer Program, there is also something called Onsite Commissions, where you can upload your product videos to specific Amazon listings, and when a customer views your video and then makes a purchase, you earn a commission. (this requires an additional approval process.)
Once you have enough videos live on your storefront, you could be earning hundreds or even thousands of dollars per month passively.
Steps to Succeed with the Amazon Influencer Program:
- Niche focus: Concentrate on a specific niche that resonates with your audience.
- Product recommendations: Curate a collection of products related to your niche and recommend them to your followers.
- Engagement: Engage with your audience through posts, stories, Q&A sessions, or Amazon Live.
- Amazon storefront: Set up your Amazon Influencer Storefront and share the personalized URL with your followers.
5. Audiobooks on Audible
If you have a voice for narration or expertise in a particular subject, creating audiobooks through Audible’s Audiobook Creation Exchange (ACX) can be lucrative and passive.
Steps to succeed with audiobooks on Audible:
- Book selection: Choose a book you’ve written or obtain the rights to narrate and distribute an existing book.
- Narration: Record high-quality audio with clear diction and appropriate pacing.
- Editing and production: Edit the audio to ensure a professional and polished final product.
- ACX publishing: Publish your audiobook on ACX, and choose the royalty-sharing option to earn passive income from sales.
- Promotion: Market your audiobook through your website, social media, and email list.
Create passive income with Amazon
Remember that while these ideas have the potential to generate passive income, they often require upfront effort, ongoing maintenance, and strategic promotion to ensure their success.
Diversifying your passive income streams and continually refining your strategies will contribute to a more stable and resilient income over time.
By leveraging Amazon’s massive customer base, the possibilities for passive income on Amazon are only limited by your imagination and dedication.