How to Make Money on Amazon in 2025: [Step-by-Step Guide]

Selling online isn’t new, but in 2025, few platforms match Amazon for reach, trust, and built-in demand. 

Over 61% of all units sold on Amazon now come from independent third-party sellers, and average U.S. sellers generated $290,000 in annual revenue in 2024, up from $250,000 the year before. 

More than 55,000 sellers have passed $1 million in yearly sales, which is truly amazing statistics, right?!

At the same time, active sellers are down to ~1.9 million worldwide, about 20% fewer than in 2021, which means more traffic (+31%) per seller as Amazon continues to grow. 

Add to that the launch of Rufus, Amazon’s built-in AI shopping assistant, which is already reshaping how customers discover and evaluate products. 

The upside is big, but so are the challenges. This guide gives you a clear process to avoid those mistakes and launch profitably.

Key Takeaways

• Choose the right business model for your budget and skills
  Success on Amazon starts with picking a model that matches your capital and strengths, whether that’s private label, wholesale, POD, or affiliate. Aligning your resources with the right path helps you avoid early mistakes and wasted investment.
  
• Validate product demand before sourcing
  Too many new sellers skip validation and end up with unsellable stock. Use Amazon’s Product Opportunity Explorer, competitor reviews, and small ad tests to confirm consistent demand before you commit.
  
• Margins matter more than sales volume
  Amazon fees, ads, and returns can quickly erode profits. Always calculate margins with the Revenue Calculator and aim for at least 20–25% net profit to sustain and grow.
  
• Strong visuals drive clicks and conversions
  Even the best product can fail with weak images. High-quality product photography, lifestyle scenes, and A+ content build trust and boost CTR, especially now that Amazon’s Rufus AI highlights these elements.
  
• Scale smarter with Dynamic Mockups
  Consistently updating visuals for A/B tests, seasonal campaigns, and multiple SKUs is tough without automation. Dynamic Mockups lets you bulk-generate professional product images, refresh Etsy and Amazon listings at scale, and keep your catalog looking polished across every channel.

Step 1: Choose the right Amazon business model

The first step is picking the model that matches your budget, skills, and goals. This decision shapes everything from startup costs to margins, fulfillment, and how quickly you can scale.

What your budget supports:

• Low investment (<$1,000): Amazon Associates (affiliate), Kindle Direct Publishing (KDP), Merch on Demand, Handmade
• Medium investment ($1,000–$5,000): Retail/online arbitrage, small-batch wholesale, services
• High investment ($5,000+): Private label brand building, large-scale wholesale, FBA scaling

1.1 Private Label

Within this business model, you source a product (often overseas), customize it under your own brand, and sell it on Amazon.

• Good for: Long-term brand builders
• Requires: Capital ($3,000–$15,000+), branding, packaging, product differentiation
• Benefits: Control over pricing, positioning, and customer experience; long-term brand equity
• Ideas to target products: $20–$100 range, steady demand, fewer than 100 reviews on competing listings
• 2025 fast-growing categories: sustainable goods, home office items, wellness

1.2. Retail / Online Arbitrage

Buy discounted items from stores or online retailers, then resell them on Amazon at a markup.

• Good for: Beginners testing the waters
• Requires: Manual product hunting, attention to brand restrictions, quick turnaround
• Startup costs: $500–$2,000
• Success factors: Aim for 50%+ margins after fees, move quickly before competition drives prices down
• Risks: Amazon brand gating and sudden price drops if too many sellers join a listing

1.3. Wholesale

Purchase bulk inventory directly from manufacturers or distributors, then resell established brands.

• Good for: Operationally minded sellers with capital
• Requires: Business license, reseller approval, cash flow for large orders
• Pros: Scalable with steady demand
• Cons: Margins are slimmer (15–25%) than arbitrage
• 2025 advantage: Strong supplier relationships can secure better pricing and allocation

1.4. Print-on-Demand (POD)

 If you’re selling custom merch (t-shirts, mugs, posters), POD removes the need for inventory. Design custom items (shirts, mugs, posters, etc.) and let a POD provider print and ship them as orders come in.

• Good for: Designers, niche creators, low-capital entrepreneurs
• Requires: Branding and design skills, POD integration setup
• Pros: No upfront inventory risk
• Cons: Thin profits unless scaled or paired with niche marketing
• 2025 platforms: Tools like Printify, Printful, and Merch by Amazon handle fulfillment.

Tip: Dynamic Mockups can help make your product visuals stand out, especially if you are competing on design.

1.5. Amazon Affiliate / Influencer Programs

Instead of selling, you promote other people’s products and earn a commission per sale.

• Good for: Bloggers, YouTubers, TikTok/Instagram creators
• Requires: Consistent content creation and audience growth
• Earnings: 1–10% commissions; top categories in 2025 include luxury beauty (10%) and handmade (5%)
• Influencer program perks: Storefronts, higher commissions, product seeding (20k+ followers)
• Startup costs: Minimal, but usually 6–12 months before earnings become meaningful
  

1.6. Other business models

Amazon also offers models that work well as side businesses or niche opportunities:

• Handmade – for artisans and crafters; no pro seller fee
• Merch on Demand – upload designs, Amazon prints and ships
• KDP (Kindle Direct Publishing) – self-publish ebooks or paperbacks, earning up to 70% royalties
  

Tip: Align your budget, time, and skills with the right model. Many sellers begin with arbitrage, POD, or affiliate programs, then move into wholesale or private label once they know the system.

Step 2: Find a profitable product to sell

Product selection is where most new sellers either set themselves up for success or waste capital before their first sale. The difference comes down to using data-driven checks instead of guessing.

2.1. Market demand

• Use Amazon’s Product Opportunity Explorer (inside Seller Central) to spot rising trends, unmet demand, and seasonality.
• Look for products with 10,000+ monthly searches as a sign of consistent demand.
• Favor categories with year-round sales unless you plan to run seasonal products.
• Amazon’s bestseller lists and Movers & Shakers sections are fast ways to confirm proven demand.

2.2. Competition analysis

Choose niches where the top sellers leave room for newcomers. Look for:

• Listings with fewer than 100 reviews (easier to compete with).
• Weak images, generic copy, or missing A+ Content.
• Recurring negative reviews – clear opportunities to improve on what’s already offered.
• Avoid competing directly with Amazon Retail, which usually dominates on price and visibility.

2.3. Product type considerations

Some products are naturally easier for new sellers. Avoid items that are:

• Fragile (glass, electronics) – high return rates
• Bulky or heavy – shipping costs cut into margins
• Require sizing (clothing) – high return rates
• Restricted/gated (supplements, certain electronics) → require extra approval

Better options for beginners include:

• Lightweight items under 2 lbs
• Mid-priced products in the $20–$100 range (balances conversion rates and margins)
• Evergreen demand items like home & kitchen, wellness, or office supplies

Practical workflow

Here’s the practical workflow to implement:

1. Pull 10–20 product ideas with Opportunity Explorer.
2. Cross-check: demand (10k+ searches/month) and competition (fewer than 100 reviews).
3. Run the numbers: calculate margins with Amazon’s Revenue Calculator before committing.
4. Validate outside Amazon: run polls, test pre-sales, or check interest in niche communities (Reddit, TikTok, forums).

⚡ Tip: Validation is cheap. Ordering a few samples, running a small ad test, or checking social feedback can save you thousands compared to sourcing a product with no real demand.

Step 3: Source or set up fulfillment

Once you’ve validated a product idea, the next step is securing supply and deciding how to handle fulfillment. These choices directly affect your margins and ability to scale.

3.1. Private Label & Wholesale Sourcing

Where to look:

• Alibaba / Global Sources – wide selection, competitive pricing, international suppliers
• ThomasNet / Maker’s Row – U.S.-based directories with faster lead times
• Trade shows & local distributors – hands-on quality checks and stronger supplier relationships

Supplier red flags:

• Refuses to send product samples
• Demands full payment upfront without trade assurance
• Won’t allow video factory tours or inspections

Best practices:

• Always order samples before placing bulk orders
• Check certifications (ISO, CE, FCC, depending on category)
• Negotiate MOQs (Minimum Order Quantities) – many suppliers are flexible with first-time buyers
• Confirm lead times and incoterms (FOB vs. DDP) before committing

3.2. Print-on-Demand (POD) Sellers

If you’re designing custom merch like t-shirts, mugs, or wall art, print-on-demand (POD) is a low-risk model that lets you launch without holding inventory.

• Integrate directly with Amazon for hands-off fulfillment
• Always order sample units to check print quality, packaging, and delivery speed

Tip: Before listing your products, use Dynamic Mockups to create high-quality, realistic visuals. The platform’s bulk generator and AI background tools help you quickly create your product visuals, which will give your Amazon listings a professional edge.

Note: Additionally, you can automate the import of all your product visuals using our Make or Zapier integration.

Top POD platforms that integrate with Amazon include:

• Printify – Offers competitive pricing and a wide supplier network.
• Printful – Known for reliable quality and advanced branding options.
• Gelato – Ideal for global reach with local fulfillment in 30+ countries.

3.3. Choosing fulfillment: FBA vs. FBM

Amazon sellers generally choose between Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM). Each has trade-offs.

Fulfillment by Amazon (FBA) – You ship inventory to Amazon’s warehouses. They manage storage, packing, shipping, returns, and support.

• Pros: Prime badge (higher conversions), stronger Buy Box odds, no need to manage logistics
• Cons: Storage fees for slow sellers, less control over packaging, inbound + fulfillment fees add up
  
• 2025 update:
  • No new FBA fee types this year after 2024’s changes
  • Low-Price FBA program continues to support items under $10 with reduced fees
  • Inventory Performance Index (IPI) below 400 can trigger storage limits – maintaining sell-through is key

Fulfillment by Merchant (FBM) – You (or a 3PL) manage storage, packing, and shipping.

• Pros: Full control over packaging and branding, no FBA storage fees, better fit for custom or made-to-order products
• Cons: No Prime badge (unless Seller-Fulfilled Prime), you handle returns and customer service, harder to keep up if sales spike

⚡ Tip: Many sellers start with FBM or a small 3PL to test demand, then move into FBA once sales volume is consistent. This helps avoid paying for unsold inventory sitting in Amazon warehouses.

Step 4: Set up, launch, and grow on Amazon

Once sourcing and fulfillment are in place, the next step is setting up your seller account, creating your listing, and driving early sales.

4.1. Set up your Amazon seller account

Step 1. Choose between Individual (no monthly fee, $0.99 per sale) and Professional ($39.99/month, required for most sellers who want to scale).

Step 2. Complete tax and ID verification to activate your account.

Step 3. If selling under your own brand, apply for Amazon Brand Registry early. This unlocks:

• A+ Content (enhanced descriptions with images and comparison charts)
• Brand Storefronts (dedicated mini-sites within Amazon)
• Extra protection against hijackers and counterfeiters
• Access to advanced analytics
  

4.2. Create a high-converting product listing

In 2025, Rufus (Amazon’s AI shopping assistant) reviews listings for shoppers, so clarity and benefits are critical to create offers that convert. Key elements:

• Title: Include main keywords and a core benefit (“Insulated Stainless Steel Water Bottle with Straw Lid – 32 oz, Leak-Proof”).
• Bullet points: Write for skimmers. Lead with benefits, then cover features, and address common objections.
• Description / A+ Content: Use enhanced visuals, charts, and FAQs. Rufus draws on product listing details, reviews, and Q&As, so clear information here helps its answers.
• Images (6–9 total): Use a mix of:
  • White-background product shots
  • Lifestyle images
  • Infographics showing features
  • Comparison graphics against competitors

Note: If you’re using POD or custom branding, Dynamic Mockups can help you quickly generate polished visuals at scale.

These realistic mockups help your product stand out without needing a professional photoshoot.

4.3. Launch your product

The hardest part is overcoming the cold start when you have no reviews. To get early traction:

• Introductory discount: Use a limited-time lower price to boost conversions.
• Amazon Vine Program (if Brand Registered): Provide free units in exchange for reviews.
• Early PPC ads:
  • Start with Sponsored Products
  • Target long-tail exact match keywords to avoid overspending on broad, competitive terms
  • Add negatives weekly to reduce wasted spend
  • A $10–$20/day budget per ASIN is enough to start testing
• Initial customer feedback: Encourage honest reviews from genuine purchases (never fake or incentivized).

4.3. Grow and optimize

It’s important to identify what works for you so you can scale your business and optimize it. Here’s how to do it effectively:

• Track CTR and conversion rates – Test new main images or bullet points.
• Expand ad strategy – Add Sponsored Brands and Sponsored Display once sales stabilize.
• Build reviews – Aim for 15–20 quickly to compete in most categories.
• Drive off-Amazon traffic – Use TikTok, Instagram, or email lists to increase external signals that help organic ranking.

⚡ Pro tip: Rufus favors listings that directly answer common customer questions. Write copy that addresses natural queries like “Is this dishwasher safe?” or “Does it fit in a car cup holder?” This will help you improve your product listings, resulting in more sales for you.

Common pitfalls when starting on Amazon (and how to avoid them)

Most failed Amazon stores don’t collapse because the model is broken. They fail because sellers overlook the basics. 

Here are the biggest mistakes to avoid in 2025.

1. Skipping product validation

Many sellers still pick products based on gut feeling or YouTube “hot product” lists.
Why does it happen:

• Relying on tools without testing demand
• Ignoring review sentiment and market depth
• Entering saturated categories

How to fix it:

• Use Product Opportunity Explorer and trend tools before sourcing
• Run small-scale ad tests on sample units or pre-launch landing pages
• Check Reddit, TikTok, and niche forums to confirm interest

2. Poor financial planning and margin miscalculation

Amazon’s fees add up quickly, storage, ads, returns, and margins vanish faster than many expect.
Why does it happen:

• Not accounting for all fees (referral, FBA, ads, storage)
• Underestimating returns and refunds
• Overspending on ads without tracking ACoS/ROAS

How to fix it:

• Use Amazon’s Revenue Calculator before committing
• Track every cost, including packaging and freight
• Target at least 20–25% net margin after all expenses

3. Weak product presentation

In 2025, strong visuals and clear messaging are the difference between clicks and scrolls.
Why it happens:

• Using supplier stock photos
• Writing bullets as plain features instead of customer benefits
• No brand voice or A+ Content

How to fix it:

• Use Dynamic Mockups or professional shoots for better visuals
• Test main images to improve CTR
• Write copy that highlights outcomes (“stay hydrated all day”) instead of just specs
• Add A+ Content and FAQs, since Rufus surfaces them in AI shopping answers

4. Choosing the wrong fulfillment method too early

Jumping into FBA with an untested product can tie up cash and rack up storage fees.
Why does it happen:

• Believing FBA automatically guarantees success
• Cash flow issues when inventory stalls
• Not knowing FBM or 3PL are alternatives

How to fix it:

• Start with FBM or small-batch 3PL to test demand
• Move to FBA once sales velocity is consistent
• Keep IPI above 400 to avoid storage limits

5. Compliance and paperwork mistakes

Accounts and listings get suspended when sellers skip approvals or lack documentation.
Why does it happen:

• Launching in gated categories without approval
• Buying from unauthorized suppliers without valid invoices
• Not securing IP rights

How to fix it:

• Keep clean invoices, certificates, and import docs
• Check category approval requirements before listing
• Register your trademark early and enroll in Brand Registry

6. No differentiation strategy

 Launching a generic private label product with only a logo leads to price wars.
Why does it happen:

• Copying existing products without changes
• Skipping customer research
• Treating branding as an afterthought

How to fix it:

• Add value with eco-friendly materials, better packaging, or helpful guides
• Build a brand story across listings and storefronts
• Position your product around customer needs, not just price

⚡ Cash flow reality: Plan for at least 3–6 months of operating expenses before profits stabilize. Inventory, ads, and logistics tie up cash, so underfunded sellers often stall out even with solid products.

How Dynamic Mockups can help you scale on Amazon

Amazon in 2025 offers one of the best opportunities for entrepreneurs in recent years. With fewer active sellers and more demand per storefront, conditions are favorable for new entrants.

Launching a product is only the first challenge. Scaling profitably requires constant optimization – and one of the fastest wins is improving your visuals. Even after your listing goes live, you’ll need fresh images for:

• A/B testing your main image to boost click-through rate (CTR)
• Seasonal promotions (holiday packaging, summer versions, etc.)
• Amazon Storefronts and A+ Content
• Off-Amazon campaigns (social ads, influencer posts, landing pages)

For sellers managing multiple SKUs, or agencies handling multiple Amazon accounts, being able to produce clean, branded visuals at scale isn’t just convenient – it directly impacts conversions and growth.

That is where Dynamic Mockups comes in. Dynamic Mockups allows you to:

• Generate thousands of professional product visuals in seconds without a studio
• Maintain a consistent brand look across your entire catalog – critical for building trust
• Create seasonal or bundle variations instantly (e.g., Valentine’s edition, multipacks)
• Test multiple main images to see which one lifts CTR the most

Instead of going through multiple rounds of photoshoots or DIY edits, you can create 1000+ studio-grade visuals in minutes.

Wanna give it a try?

Get started with Dynamic Mockups today to create stunning product visuals that sell!