You know, the cost of space is a significant factor for eCommerce business. Particularly for small-scale eCommerce ventures, the challenge of investing in ample storage to accommodate products can pose a major obstacle to maintaining profitability. Nevertheless, a business model offers the opportunity to sell products on the best-selling platform in the world – Amazon without the need for personal inventory storage.
In this article, we will delve into how to sell on Amazon without inventory through the following sections:
- Explanation of the concept of selling on Amazon without inventory
- How to sell on Amazon without inventory
- Tips for How to sell on Amazon without inventory
How Selling on Amazon without Inventory Works?
Before exploring how to sell on Amazon without inventory, let’s start by what it is. Selling on Amazon without inventory is a business model where a seller doesn’t keep the products they sell in stock. Instead, when an item is sold, the seller purchases it from a third party and has it shipped directly to the customer.
Here’s a simple explanation of how it works:
- Listing products: The seller lists products for sale on Amazon. The seller doesn’t purchase the products upfront, so there’s no inventory cost at this stage.
- Receiving orders: The seller receives the order details when a customer orders a product.
- Order fulfillment: You either have a third-party supplier handle the order fulfillment, or an inventory service handle the delivery.
- Shipping the product: The third-party supplier packages and ships the product directly to the customer. The seller never handles the product directly.
- Handling customer service: The seller is responsible for customer service, including handling any questions, complaints, or returns.
Selling on Amazon without inventory vs with inventory
Selling on Amazon without inventory differs significantly from the traditional selling style with inventory. To gain a clear understanding of the variances between these two approaches, refer to the following comparison table:
Feature | Traditional Selling on Amazon | Selling on Amazon Without Inventory |
Inventory ownership | Seller owns and manages inventory | Having a 3rd party provide/ manage inventory |
Upfront investment | Significant initial investment in inventory | Low upfront investment |
Storage | Seller must have space to store inventory | Seller does not need storage space |
Order fulfillment | Seller is responsible for shipping orders to customers | Third-party supplier ships orders directly to customers |
Profit margins | Typically higher profit margins | Typically lower profit margins |
Customer service | Seller is responsible for customer service | Seller is responsible for customer service, but may also rely on their supplier for assistance |
Advantages of selling on Amazon without inventory
Selling on Amazon without inventory offers several considerable advantages for you, including:
- Lower initial investment: If you know how to sell products on Amazon without inventory, you will have a lower initial investment compared to traditional retail models. Without the need to purchase and store inventory, you can save on upfront costs.
- Reduced risk: Knowing how to sell on Amazon without inventory can help mitigate the risk of holding physical inventory. You can fulfill orders directly from manufacturers by leveraging no-inventory models. It also eliminates the need to hold inventory and reduces unsold product risk.
- Streamlined operations: Selling on Amazon without inventory allows you to focus on marketing, customer service, and growing your business rather than managing inventory logistics. This streamlined approach can save time and resources, enabling you to scale your operations efficiently. From there, you can partly solve the problem of how to increase sales on Amazon.
- Access to a global marketplace: Amazon provides access to a vast customer base and a global marketplace. Knowing how to sell items on Amazon without inventory lets you tap into this extensive network. As a result, you can reach customers worldwide without needing physical inventory storage in different locations.
- Diversification: Understanding how to start selling on Amazon without inventory can also help you diversify your product offerings without investing in new inventory. By taking advantage of dropshipping or print-on-demand models, you can quickly test new products and expand their catalog without the risk of holding excess inventory.
How to Sell on Amazon without Inventory: 5 Methods
Actually, there are many models of how to sell on Amazon without inventory. In this guide, we will mention 5 most common models. Let’s thoroughly read to get which one is right for your business.
Dropshipping
The first model you should know on how to sell on Amazon without inventory is surely dropshipping. This is a business model in which the seller does not keep an inventory of their products. Instead, when an order is received, the seller forwards it to a third-party supplier or manufacturer who then delivers the items directly to the customer. The seller plays the role of a middleman between the end-user and the supplier, handling the business’s marketing, sales, and customer service aspects.
The Amazon dropshipping process typically involves the following steps:
- The seller sets up an online store and lists products for sale.
- When a customer places an order and pays, the seller receives the order details.
- The seller then forwards the order and customer information to the supplier or manufacturer.
- The supplier or manufacturer packages and ships the product directly to the customer.
- The seller keeps the difference between the price they charge the customer and the price they pay the supplier as their profit.
Dropshipping offers several benefits but still has some drawbacks for Amazon sellers, such as:
Pros | Cons |
Low startup costs: Since there is no need to purchase inventory upfront, you can start a dropshipping business with minimal investment. | Limited control over the supply chain: You are relying on your supplier to ship the product to your customer on time and in good condition. |
No inventory management: This eliminates the costs and complications associated with warehousing and inventory management. | High competition: Dropshipping is a common business model, so the competition is fierce. Therefore, you will need to work hard to stand out from the crowd and attract customers. |
Wide product selection: You can source products from multiple suppliers and expand their product catalog easily. |
Amazon FBA
The next model you should consider for how to sell on Amazon without inventory process is Amazon FBA (Fulfillment by Amazon). Amazon provides this service to help sellers with storage, packaging, and shipping assistance. With Amazon FBA, you can send their products to Amazon’s fulfillment centers, where the items are stored until they are sold.
So, how does Amazon FBA work? The process of using Amazon FBA involves the following steps:
- Sellers ship their items to Amazon’s fulfillment centers, where they’re stored.
- When an order is placed, Amazon’s staff handles picking, packing, and shipping on the seller’s behalf.
- Amazon offers customer service and manages returns for FBA-fulfilled orders.
When leveraging Amazon FBA to address how to sell stuff on Amazon without inventory, you can enjoy several benefits. Nevertheless, like any other model, Amazon FBA also has certain disadvantages. You can see in the table:
Pros | Cons |
Fulfillment infrastructure: Amazon has a robust fulfillment network that allows you to use its advanced logistics and shipping capabilities. | High costs: Amazon FBA charges various fees, including storage fees, fulfillment costs, and referral fees. |
Prime eligibility: Products fulfilled by Amazon FBA are eligible for Amazon Prime's fast and free shipping, which can attract more customers. | Long-term storage fees: Amazon charges extra for items that have been stored in its warehouses for more than 60 days. This can be a problem for sellers with slow-moving inventory. |
Global reach: Amazon FBA enables sellers to reach customers worldwide by utilizing Amazon's international fulfillment centers. | Not suitable for small businesses or slow-selling products: This is because of inventory fees that may be high |
To know more about Amazon FBA and its related fees, read these articles: Amazon FBA vs FBM and Amazon seller fees.
Third-Party logistics company
A Third-Party Logistics (3PL) company is a service provider that offers storage, order fulfillment, and shipping services to businesses. When selling on Amazon without inventory, the seller does not hold physical stock of their products. Instead, they rely on a 3PL company to store the products and fulfill customer orders. Here’s how it typically works:
- The seller teams up with a 3PL company to handle their products.
- The 3PL company stores and manages the inventory for the seller.
- When a customer orders on Amazon, the 3PL company fulfills the order.
- The 3PL company handles packing and shipping directly to the customer.
- The seller focuses on sales, marketing, and customer service, while the 3PL takes care of logistics and order fulfillment.
In the context of how to sell on Amazon without inventory, using 3PL services gives a lot of benefits. However, this model still comes with several drawbacks, as you see in the table:
Pros | Cons |
Convenience: 3PLs handle the entire fulfillment process. This frees up your time to focus on other aspects of your business, such as marketing and sales. | Cost: 3PLs charge fees for their services, which can add up to a significant expense. |
Expertise: 3PLs have the expertise and experience to fulfill orders quickly and efficiently. They also have access to a network of warehouses and shipping carriers. | Reliance on a third party: When you use a 3PL, you are relying on another company to fulfill your orders. If the 3PL makes a mistake, it can destroy your reputation and lead to lost sales. |
Expertise: 3PLs have the expertise and experience to fulfill orders quickly and efficiently. They also have access to a network of warehouses and shipping carriers. | Lack of control: Getting to know how to make money on Amazon without inventory due to 3PLs, you may have less control over the fulfillment process. |
Flexibility: 3PLs offer a variety of services to meet your specific needs. For example, some 3PLs offer kitting and assembly services, while others offer custom packaging and labeling. | Complexity: Managing a 3PL relationship can be complex, especially if you are working with multiple 3PLs. |
Sell digital items
Digital products are items that exist in digital form, such as ebooks, audiobooks, music, digital art, software, online courses, templates, or printable items. Of course, digital items do not always need physical storage or shipping. That’s why this model has become a popular strategy for those who are struggling to find a way to answer the question, “How do I sell on Amazon without inventory” or how to make money on Amazon without writing.
Here are the key steps involved in how to sell on Amazon without inventory through digital products:
- Register as an Amazon seller: You need to have an Amazon seller account to gain access to the Seller Central dashboard.
- Choose the appropriate platform: You need to choose the right Amazon platform for your digital product; for instance, use Kindle Direct Publishing (KDP) for ebooks, Amazon Music for digital music, or Merch by Amazon for digital art. You can also make money on Amazon without writing using alternative approaches like outsourcing content creation or using public domain works.
- Create your digital product: You need to follow Amazon’s guidelines for formatting, content, and metadata to create your digital product.
- Upload your digital product: You have to upload your digital product to the appropriate platform within Amazon and set your pricing.
There are several considerable benefits if you choose digital products as a way to become an Amazon seller without inventory. However, how to sell on Amazon without inventory through digital items still has a few drawbacks. Refer to the table below to gain a clear understanding of this model’s strengths and weaknesses:
Pros | Cons |
Trust and credibility: Amazon is a trusted brand and the best selling platform worldwide. Thus, customers are more likely to buy digital products from Amazon than from an unknown website. | Competition: The digital products market is very competitive, so it can be hard to stand out from the crowd. |
High-profit margins: Digital items have meager costs of goods sold so that you can generate high-profit margins on your sales. | Piracy: Digital items are easy to pirate so others can steal your best-selling products. As a result, you may reduce profits. |
Repeated sales: Digital products can be sold repeatedly without inventory, allowing creators to generate passive income and maximize product value | Refunds: Amazon is known for its generous refund policy, meaning customers can quickly return digital products for a full refund. |
Sell print-on-demand products
The final model of how to sell products on Amazon without inventory relates to print-on-demand (POD) items. POD refers to offering customized products that are produced and shipped only when an order is received. You earn a profit from the difference between the product’s cost and the price you set on Amazon. Here’s how it typically works:
- Choose a print-on-demand provider that integrates with Amazon’s platform. Popular providers include Printful, Amazon merch on demand, and Printify.
- Use a design tool or hire a graphic designer to make unique and appealing designs.
- Connect your print-on-demand provider with your Amazon seller account.
- When a customer places an order, the print-on-demand provider receives the order details, produces the customized items, and ships it directly to the customer on your behalf.
Like any other model, selling print-on-demand products on Amazon without inventory offers both advantages and disadvantages, including:
Pros | Cons |
Wide product selection: Print-on-demand has a wide range of customizable products. So, it gives you the flexibility to offer diverse options to customers. | Quality control: Controlling print-on-demand product quality is challenging when working with multiple suppliers, as physical inspection is necessary before shipment |
Easy order fulfillment: Once you've set up your print-on-demand business on Amazon, fulfilling orders is as simple as a few clicks. | Shipping delays: Print-on-demand products can take longer to ship than other types of products, mainly if your supplier is located in another country. |
Reduced time to market: With print-on-demand, you can quickly bring new designs and products to market. There's no need to wait for inventory to be manufactured and shipped. |
Tips for How to Sell on Amazon Without Inventory
Now, we will explore four key tips on how to sell on Amazon without inventory:
Select your suppliers carefully
One of the most critical aspects of how to sell on Amazon without buying products is choosing reliable suppliers. Your suppliers are essentially your business partners, and their performance can directly impact your reputation and success. Here are some tips on selecting your suppliers:
- Research: It would be better to look for suppliers with a solid track record of fulfilling orders promptly and accurately. You should consider reputable suppliers like SaleHoo, Worldwide Brands, or AliExpress.
- Quality control: You should read product reviews and consider ordering samples to assess the quality for yourself.
- Shipping times: It is essential to check the shipping times your suppliers offer. Amazon customers often expect fast shipping. Therefore, it’s vital to work with suppliers who can deliver products within a reasonable time frame, preferably within a few days.
- Pricing and terms: You need to compare pricing and terms different suppliers offer. Also, pay attention to return policies and warranty terms.
Stay compliant with Amazon’s policies
As top marketplace for selling products, Amazon has strict policies and guidelines for all sellers, including those practicing how to sell on Amazon without inventory. It would be best if you stayed compliant to avoid penalties or account suspension.
Here are some key aspects of Amazon’s policies to keep in mind:
- Listing accuracy: You need to ensure your product listings are accurate and up-to-date. Displaying incorrect product information, such as price or availability, can result in negative feedback and harm your seller’s reputation.
- Shipping and returns: You must stay on top of shipping times and returns. Late shipments or high returns can negatively affect your seller metrics. Be transparent about shipping times and return policies in your product listings.
- Intellectual property: Please avoid selling counterfeit or trademarked products, which can lead to legal trouble and account suspension.
Offer excellent customer service
Delivering exceptional customer service is pivotal in achieving success while selling on Amazon. Satisfied customers are inclined to leave favorable reviews and turn into loyal and returning customers. Here are some tips to offer exceptional customer service:
- Timely responses: Respond to customer inquiries promptly, ideally within 24 hours. Quick and helpful responses can turn potential issues into positive experiences.
- Clear communication: Be clear and transparent with customers about product information, shipping times, and return policies. Avoid misunderstandings by providing accurate details.
- Order tracking: Provide order tracking information so customers can follow the progress of their orders. This can reduce anxiety and increase confidence in your service.
- Problem resolution: Address customer issues and concerns professionally and promptly. Whether it’s a late shipment or a damaged product, find a solution that leaves the customer satisfied.
- Feedback and reviews: Encourage customers to give feedback and reviews, especially if they are satisfied with their purchase. Positive reviews can significantly boost your visibility and sales.
Optimize your product listings
Optimizing your product listings is essential for attracting and converting potential customers. Here’s how to do it effectively:
- Keywords: Research and use relevant keywords in your item titles and descriptions. This helps your products appear in Amazon’s search results when customers are looking for items you sell.
- High-quality images: Use high-resolution images that showcase the product from different angles. Clear, professional images can instill confidence in potential buyers.
- Compelling descriptions: Write compelling and informative product descriptions. Highlight the features and benefits of the product, and use persuasive language to encourage buyers.
- Competitive pricing: Keep an eye on your competitors’ prices and adjust yours accordingly. Competitive pricing can attract more customers.
- Fulfillment method: Clearly mention that your products are being dropshipped. Amazon allows dropshipping, but it’s essential to be transparent about it. Customers appreciate honesty.
- A/B Testing: Experiment with different product listings to see what works best. You can test variations of titles, descriptions, and images through Amazon Manage Your Experiments, Splitly,… to optimize your listings for conversion.
How to Sell on Amazon without Inventory: FAQs
- How to sell on Amazon without selling products?
One way to sell on Amazon without selling physical products is by becoming an affiliate marketer. As an affiliate, you can promote products listed on Amazon and earn a commission for every sale made through your referral link. By creating engaging content, such as product reviews or tutorials, and driving traffic to Amazon through your affiliate links, you can generate income without the need to handle inventory or shipping.
- How to sell on Amazon without being a business?
To sell on Amazon without being a business, you can consider the following options:
- Become an individual seller: Amazon allows individuals to sell products on their platform without the need for a business registration. You can create an individual seller account and list your products for sale.
- Sell as an affiliate: By sharing your unique affiliate links, you can earn a commission for every sale made through your referral.
- Create and distribute merch: Amazon Merch on Demand allows you to design custom apparel and accessories that are printed on-demand. When a customer purchases your design, Amazon handles the printing and shipping, allowing you to earn royalties without the need for inventory 2.
- Sell B2B: If you want to sell to other businesses, Amazon Business is designed to help you reach B2B customers of all sizes.
- Where can I buy products to sell on Amazon?
To buy products to sell on Amazon, you can consider the following options:
- Wholesale suppliers: Contact manufacturers, distributors, or wholesalers directly to purchase products in bulk at wholesale prices. Websites like Alibaba, Thomasnet, and Wholesale Central can help you find suppliers.
- Retail arbitrage: Purchase products from retail stores or online marketplaces at a discounted price and resell them on Amazon at a higher price.
- Private label: Source products from manufacturers and customize them with your own branding. Websites like Alibaba, Global Sources, and Made-in-China can help you connect with manufacturers.
- Dropshipping: Partner with a dropshipping supplier who will handle inventory storage and shipping. When a customer places an order, the supplier ships the product directly to the customer. Platforms like Oberlo and AliExpress offer dropshipping options.
Can you Sell on Amazon without Inventory? Absolutely Yes!
In conclusion, selling on Amazon without inventory can be a viable and profitable business model with the right strategies in place. By carefully selecting reliable suppliers, staying compliant with Amazon’s policies, offering excellent customer service, and optimizing your product listings, you can set yourself up for success in the competitive Amazon marketplace. So, take the plunge and start your journey as an Amazon seller today!
In addition, if you are looking for a tool to help you solve the inventory problem when doing eCommerce business, LitCommerce is the answer for you. To know more about this great tool, contact us now!
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