Comparing Ways to sell on Amazon - 5 Amazon Business Models

There are in fact multiple ways to sell on Amazon. But most Amazon sellers tend to fixate pretty early on a particular one of the ways to sell on Amazon.

If you google "How to sell on Amazon", chances are high that in fact what you're going to be shown is how to private label products on Amazon (I know - I've looked!).

Contents:

What 'How to Sell on Amazon' Usually Means

Model 1: Retail Arbitrage

Model 2: Online Arbitrage

Model 3: Wholesale

Model 4: Private Label/Custom Product

Model 5: Agency model

Comparing the Models

Do it YOUR Way

What 'How to sell on Amazon' really means

Most posts, videos or podcasts that come up in response to "How to sell on Amazon" really mean:  "How to do Private Label on Amazon".

Private Label IS a great way to sell on Amazon - if it's the right model for you. 

What is NOT usually made clear is that private label means doing a large amount of work, spending very considerable sums and being willing to take a considerable risk.

I know because I've done it multiple times and helped others do the same for about 4 years now. 

You have to know how to do product research on Amazon; pick or design products; get them ordered (probably in China)and imported, then how to do an aggressive launch.

Each of these skill sets is quite big - but the biggest by far is product selection or design and working with a manufacturer. It's a great skillset to develop but not to be underestimated.

The other main ways to sell on Amazon

Leaving aside non-physical products, like Kindle books or other Media products, there are in fact many more ways to sell on Amazon than the ones you may have deep-dived into.

Let's discuss each of these main ways to sell on Amazon in turn.

Model 1: Retail Arbitrage

Model 2: Online Arbitrage

Model 3: Wholesale

Model 4: Private Label/Custom Product

Model 5: Agency model

Model 1: Retail Arbitrage

The most famous of all ways to sell on Amazon

This is probably the most famous/well known of all ways to sell on Amazon. Made famous by Chris Green, one of the most popular ways to start Amazon is also one of the cheapest, simplest and quickest. No wonder it's popular.

How Retail Arbitrage works

You basically go round retail stores (for example Walmart) "scanning" the barcodes of established brand products using your trusty Amazon Seller app and your smartphone (or a barcode scanner for the more dedicated).

If you can find a profitable difference between the price a product sells for on Amazon and the cost to you of buying it in-store (accounting for the costs of selling on Amazon, such as the Amazon sales commission and Amazon fulfilment costs), you've hit on a winner.

You then buy as many units as you think you can sell/as you can afford. Then, when you get home, you will label the products if needed, put them in a carton and ship them into Amazon's warehouses (under the FBA or "Fulfilled By Amazon" programme). Amazon will then store the products and when a product is ordered, it will fulfil the order (pick it from the warehouse shelves, package it and deliver it). 

The upsides of Retail Arbitrage

It's very affordable indeed to start with - you can start with under $100. Plus your cash can turn over pretty swiftly, especially at peak sales times.