How to sell on Amazon Without Inventory? Well you are in the right place.The way technology is growing, many small businesses that embrace the advancement have made huge changes to their operations. Entrepreneurs are now focusing on a global audience of potential customers.
But one of the greatest challenges for online businesses is where to outsource products to sell. No one seems reliable nowadays. When sellers think of using Amazon, what comes to their mind is stocking up on merchandise and becoming a full-packed retailer.
The question remains, what if you don’t have enough money to invest in inventory or the space to store your products? Or what if you want to figure out whether this type of business will be successful before you fully invest in it?
This might be the reason you landed on this article. It is important to know that there are several ways you can sell on Amazon without stocking a single product. In this guide, we will walk you through all the steps required to start selling on amazon without inventory.
But before we dive into this question, let’s look at this first;
Benefits of Selling on Amazon Without Inventory.
If you talk about Amazon, what comes to your mind is a website or a platform where anyone can purchase anything, from clothes to books to electronics. But what people don’t know is that Amazon is just a platform that allows both sellers and buyers to do their transactions in exchange for goods and services.
In simple terms, Amazon is a powerful tool for sellers and offers several benefits to individuals who would wish to sell without inventory. This can be a game changer to many entrepreneurs as selling without inventory is the new business in the market.
Let’s see the benefits;
- No upfront investment: Selling without inventory removes the need to invest in stock which helps you to free cash flow and reduce risks.
- Flexible: Also known as dropshipping allows you to source products from a wide range of suppliers which helps to optimize profits.
- Concentrate more on marketing and customer care: This type of business allows you to focus more on marketing and customer care which helps increase your customer touch that grows your business.
- Increase customer base: One of the most important benefits of Amazon is that it offers users access to a diverse and engaged customer base. The platform has over 310 million active users. In this case, the platform allows sellers to engage many potential buyers.
- Safe and reliable: Amazon is one of the platforms that has built its reputation for being safe and reliable. Customers can purchase their products without fear of being scum.
- Protection for sellers: One of the greatest advantages that Amazon offers to sellers is protection against fraud and chargebacks. This allows many sellers to conduct business without risks. Therefore, selling on Amazon without inventory can be a great way to start or expand your business.
- You don’t have to invest in inventory management software.
How to sell on amazon without inventory.
There are several approved ways you can sell on Amazon without inventory. These methods are discussed below:
Dropshipping is a fulfillment technique that allows the seller to keep no inventory. In this method, when the order comes in, the seller will contact the supplier who then ships the product directly to the customer.
The main advantage of dropshipping is that it does not require any up-from investment. Therefore, you do not have to buy a product. However, finding a reliable supplier can be difficult since there is always the possibility of shipping delays.
How does dropshipping work with amazon?
This is the first method of selling on Amazon without inventory. All you need is to create listings for products you would like to sell on Amazon and when a customer purchases a product from your listing, you will then order it from the supplier and have it delivered directly to the customer. This is a great way to start in eCommerce.
Advantages of Dropshipping.
- You don’t have to own storage or invest in any product store because it allows you to sell on Amazon without inventory. In this case, you do not have to worry about storage costs or product damage.
- No upfront fees are required.
- It is flexible to run a dropshipping business since you are limited to the type of products you have to sell.
- It allows you to sell not only using Amazon but other companies such as Walmart, and Etsy along with your website or social media.
- You can operate your business anywhere because everything is done online. You only need to have an internet connection.
- You can scale up and build your business brand at your pace.
Disadvantages of Dropshipping.
- There is stiff competition that can make it challenging for beginners.
- The business is less profitable because most sellers sell the same product making the buyer reduce their profit.
- Some customers may be unhappy because some products take longer to reach them.
2.Amazon Fulfilled by Merchant (FBM).
This is the second most popular method you can use to sell on amazon without inventory. Let’s look at it;
What is Amazon FBM?
Amazon FBM is a method used to describe products sold and shipped by the merchant instead of Amazon itself. Since Amazon offers Fulfilled by Amazon services for merchants, it also exposes them to some advantages such as low costs and more involvement in the shipping process.
Furthermore, FBM helps merchants who sell products that are not eligible for Amazon’s fulfillment services. Therefore, if you choose dropshipping, FBM or FBA you have to consider your needs and preferences.
For example, products that need special handling or those considered hazardous materials cannot be fulfilled by Amazon. However, all these options have a great way to sell products on Amazon.
How Amazon FBM works.
You can use several methods to sell on Amazon using Amazon FBM. One way is dropshipping while the other includes 3PL or third-party logistics company.
A 3PL provides you with a way to outsource storing your inventory, packing along with shipping your orders. This is the best option for sellers with more expanded businesses or those with extract management on high order volumes.
Advantages of Amazon FBM.
- It offers you more control over the prices and can be cost-effective if you have large orders.
- The involvement of 3PLs allows the process to be more quickly and efficiently.
Disadvantages of Amazon FBM.
- Using 3PL requires some investment and time which could be risky for starters.
- Outsourcing fulfillment to a third-party provider will be expensive but it reduces your time and resources.
3.Selling digital products.
With knowledge, another way how to sell on amazon without inventory is by selling digital products. Digital products are intangible items such as books, music, and videos among other downloadable products.
Advantages of digital products.
- No upfront investment when you have knowledge of digital products.
- Anyone can access it even with less eCommerce knowledge.
- You can set your price and profit margins.
Disadvantages of digital products.
- Stiff competition due to over-saturation in the markets.
- You are not sure if you will make it in this industry.
- You receive high commission fees.
For now, you can focus on the above methods to find your success. Otherwise knowing how to sell on amazon without inventory helps you decide which path is right for you. There are endless opportunities in Amazon.
However, if you are just starting, I will recommend dropshipping because it does not require any upfront fees. Once the business has grown, you can use 3PL to help you manage your delivery and shipping processes.