By Rachel Puryear
Here's a question for you - who do you think makes the most money from Amazon?
Is it the sellers of ubiquitously needed items, like baby/children's supplies, personal care, or home and care repair? They do make a lot.
Is it the sellers of entertainment items, like books, games, music, and movies? They also make a lot.
Is it the sellers of high-ticket items like art, jewelry, electronics, and high-end clothing? They do well, too.
Something else?
Actually, it's none of the above.
The one who makes the most money from Amazon is... Amazon itself.
Just like the house always wins; when it comes to selling online, the platform itself *usually* wins.
Many items in display cases in a shop. By Onur Bahçivancilar.
What is a Platform?
An online platform connects people who want something, with people who can sell it to them. It's the virtual version of a shopping center, where stores can open up - this can include "supermarkets", or "specialty stores".
For instance, Amazon is a platform for buying and selling goods, and there are other platforms which do the same. There are plenty of other kinds of online platforms, too. Other examples include:
- Apps connecting service providers with clients; such as rideshares, house cleaning, lodging and accommodations, task workers.
- Professional services apps; like real estate listings, or health services.
- Media sharing; like education platforms, or game platforms.
- Social media and networking sites.
- Search engines.
- Payment systems.
How Do Platforms Make Money?
There are multiple ways a platform can make money. You can use one or more, as it makes sense for your business.
One of the most common - and perhaps also the most profitable way - is to take a percentage from each transaction. Since we mentioned Amazon earlier, this is also how Amazon makes much of its money. For instance, x% of each sale or service sold goes to to the platform owners.
Another way for the platform to make money is by subscription fees. You could have either the users listing goods and services pay a subscription fee, or the consumers, or both.
You could have multi-tier options, too - such as a free option with minimal service, and progressively more expensive options with more services. Amazon does have a paid subscription option for sellers who regularly sell larger volumes of goods.
Other options for making money from a platform - perhaps particularly where you're not making many transactions from it - is through advertising, and affiliate marketing. As with the other options, how much you make depends upon the volume of users you have.
Could I Start a Platform?
Yes, of course you can. The possibilities are limited only by your imagination.
You could create a platform around something you are passionate about, and have always wanted to see come into existence. On the other hand, it doesn't have to be your passion - just something you know enough about to put a business idea into action around, and market to the bases you'll need to launch it.
Besides, whereas platforms make money largely by connecting buyers and sellers; the platform owner can much more easily turn it into a passive income vehicle for themselves. That's what we all want in terms of making a good living.
What ideas do you have for a platform? Who will use it? Feel free to link to yours in the comments below!
Love this blog, and want to help support it? Please check out the following products. We are Amazon affiliates, and earn a commission when you purchase through these links - this helps support the blog, so we thank you!
- Do you love being outdoors, and have wide feet, but have trouble finding shoes that will fit your feet, and serve all your needs? Check out:
- The Dr. Comfort Store on Amazon, with lots of athletic shoes (and more) to choose from which come in wide, extra-wide and beyond sizes - some styles go up to men's size 15. This store also includes a lot of diabetic footwear (all genders).
- The Comfortview Store on Amazon, with plenty of shoes to choose from that will fit up to 13 double wide, and which are comfortable, stylish, cute, and suitable for many occasions - including sneakers, sandals, boots, flats, and dress shoes (women's/women-presenting styles).
- The New Balance Store on Amazon, with plenty of shoes to choose from including athletic and sneakers. Most styles go up to at least 11 or 12, and many include wide sizes (all genders).
Thank you, dear readers, for reading, following, and sharing. Here's to the best ways to make good money.
Check out my other blog, too - World Class Hugs, at https://worldclasshugs.com. It's about celebrating empathic people, balanced relationships, spirituality with a curious mind and open heart, and visiting gorgeous natural places.
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