Everyone would love the opportunity to make passive income, where money rolls into their bank account with minimal effort. But, with so many passive income ideas, you might wonder how to make passive income with Amazon. Is it even possible to do so? I've wondered about such myself and even tried to do the same.

There's no doubt in anyone's mind that Amazon is an e-commerce giant! Over 60% of online shoppers, including you and me, start their online shopping searches from Amazon. Interestingly, of all the sales on Amazon, 56% of those sales are done by third-party sellers.

You can earn income on Amazon in many ways, but to make that income passive will require a lot of upfront work, sound strategy, and automation of some processes in your system.

This post will show you the different ways to make passive income on amazon, tips to maximize your earnings, and some pros and cons of making money on Amazon.

But first, let's talk about what passive income really is.

What is Passive Income?

Passive income is income that you earn without much work from you. The IRS puts it this way:

“Passive activities include trade or business activities in which you don't materially participate. You materially participate in an activity if you're involved in the operation of the activity on a regular, continuous, and substantial basis”.

-IRS Website

This means passive income is the money you make without a significant, regular active contribution.

This doesn't mean that there isn't some level of activity from you. The most straightforward passive income to identify comes from interest and dividends you earn from an investment, rent, or rental property.

Passive income allows you to spend time doing the things you enjoy and even earn more active income to supercharge your passive income ventures. In fact, the IRS also lets us know how much work timewise counts as passive income involvement. The number is 500 hours in a year. So essentially, if you work less than 9.5 hours a week on a business that brings you income, that's a passive income business.

Related: 18 Unique Ways To Create Passive Income and Boost your Cash Flow

Of course, the question of how to make passive income on Amazon now comes down to how to put in less than 9.5 hours of work a week to earn income on Amazon.

So…

Can You Earn Passive Income on Amazon?

As I mentioned earlier, some upfront work is required to get the process to a point where your income-generating system on Amazon demands a minimal amount of effort from you consistently.

However, it is very possible to earn passive income on Amazon once you've got it up and running.

Amazon has become a great way to earn money these days, and there are several ways to make this happen. But you may have to test and try out what works best for you.

Let's talk about the different ways to make money on Amazon.

There are several ways to generate passive income on Amazon, including setting up an Amazon FBA business, Amazon associates' program, self-publishing books through Amazon Kindle Direct Publishing, and more.

What are the Best Ways to Make Passive Income on Amazon?

There are many ways to make passive income on Amazon, and the best way to find out is to try different methods and see what works best for you. Here are some ways to make passive income on Amazon:

1. Amazon Private Label FBA
2. Amazon Kindle Direct Publishing
3. Become an Amazon Affiliate
4. Amazon Dropshipping

1. Amazon Private Label FBA

One great way to make passive income is through Amazon Private Label FBA. FBA is a process where you create your own brand of products and sell them on Amazon. You will need to find a supplier to manufacture your products, create your branding, and then ship the products to Amazon. Once Amazon receives the products, they will take care of your packaging, shipping, and customer service.

Time is a precious commodity, and any method you can use to save time is valuable. This is especially true in business. Therefore, any way that you can automate tasks or processes is a valuable way to save time.

The best part about Amazon Private Label FBA is that it's a hands-off way to make passive income. You don't have to worry about inventory, shipping, or customer service – Amazon takes care of everything for you. All you need to do is create your product, send it to Amazon, and then sit back and watch the sales come in! So now let's discuss some of the key benefits of the source of passive income on Amazon.

Benefits of Using FBA for Private Label Products:

There are several benefits of using FBA as a source of passive income, including:

1. Increased Sales – Customers trust Amazon and are more likely to buy products fulfilled by Amazon. In fact, studies have shown that customers are willing to pay up to 20% more for products fulfilled by Amazon.

2. Reduced Shipping Costs – Businesses that use FBA can take advantage of Amazon's discounted shipping rates. It can lead to significant savings on shipping costs, especially for businesses that sell large or heavy products.

3. Fast and Reliable Shipping – Amazon is known for its fast and reliable shipping. Customers expect their orders to arrive quickly and are often willing to pay more for faster shipping. Fulfilling orders through Amazon allows businesses to take advantage of this customer expectation.

4. Increased Visibility – FBA products are eligible for Amazon Prime and tend to rank higher in search results. This boost in exposure has the potential to improve sales and revenue.

5. Reduced Costs – Storing products in an Amazon fulfillment center can be cheaper than storing them in your own warehouse. This is because you only have to pay for the storage space you use and don't have to worry about the costs of maintaining a warehouse (e.g., utilities, labor, etc.).

6. Flexibility – FBA allows businesses to scale up or down as needed. This means that businesses can adjust their inventory levels based on customer demand, which can lead to significant cost savings.

7. Easier Returns – customers who are unsatisfied with their purchase can quickly return the product to Amazon. This can help to increase customer satisfaction and loyalty.

8. Peace of Mind – businesses that use FBA can focus on other aspects of their business, knowing that a trusted and reliable partner is handling their fulfillment.

2. Kindle eBooks

There are several ways to make passive income on Amazon, but one of the most popular is Amazon Kindle Direct Publishing (KDP). KDP allows you to self-publish your books on the Kindle platform and earn a royalty on each sale. The great thing about KDP is that it's a very hands-off way to make money – once your book is published, you don't need to do anything else except promote it and wait for the sales to come in.

With KDP, you set the price for your book and then earn royalties based on how many copies were sold. However, you'll need to ensure your text is formatted correctly for the Kindle platform, and you'll have to pay Amazon a commission on each sale.

Publishing Kindle eBooks is a great way to make passive income. Not only are you able to build up a lasting income stream, but you can also promote your other products and services through your books. So if you're looking for a creative and easy way to make money, publishing Kindle eBooks is definitely worth considering.

Related: Broke Bookworm No More- 10 Smart Ways To Save Money On Books

3. Set up An Amazon Affiliate Account

Another way to make passive income on Amazon is to become an affiliate marketer. This means promoting other people's products and services on your website or through social media platforms like Facebook and Twitter.

It is one of the easiest and most popular ways to make passive income from Amazon. When you sign up for an affiliate account, you're given a list of products you can promote. Once someone clicks on one of your links and buys the product, you earn a commission. It's important to note that this is a commission-only job, so you won't make any money if people don't buy the product.

The Amazon Associates Program is one of the most popular ways to make passive income on Amazon. It is a referral program that pays you a commission for every qualifying purchase made by a customer that you refer to Amazon.

Amazon Influencer Program

The Amazon Influencer Program is a great way to make passive income on Amazon. As an influencer, you can promote products to your followers and earn a commission on any sales you generate. The program is free to join, and you can promote products immediately.

To succeed in the program, choose products you are passionate about and that your followers will be interested in. You should also promote your affiliate links regularly and share helpful content with your followers to build trust and credibility.

Related: 7 Easiest Passive Income Ideas To Make Money This 2022

The Pros and Cons of Passive Income on Amazon

Passive income on Amazon can be a great way to supplement your income. However, there are some pros and cons to consider before starting this type of business:

Here Are The Pros:

• Passive income is reliable and consistent.
• You can set your own hours and work when you want, which can be beneficial if you have a family or other responsibilities.
• No need to manage a business or deal with the stress of making sales quotas.

Here Are Some Of The Potential Cons:

• The commission rates of associates program are low
• It can be challenging to create a successful Amazon FBA as a passive business
• There is a risk that your business will not make money, no matter how well you run it
• It can be challenging to find new customers, as they are likely to be pickier about their spending
• If you are not able to keep up with the demands of your Amazon business, you could find yourself out of work

Wrapping Up

In today's economy, business owners need to find ways to generate passive income. Amazon is an excellent option for those seeking an extra income stream. Amazon offers opportunities for direct sales through its own website and opportunities for affiliates and third-party sellers who can sell products on Amazon without having any inventory or shipping requirements. We hope that you find this article helpful.