How to Sell on Amazon WITHOUT Inventory
If you’re like most people, you probably think that to sell on Amazon; you need to have a lot of inventory on hand. But what if there were some ways to sell on Amazon without inventory? And what if this method actually allowed you to make a profit? Believe it or not, there is a way to do this – and we are going to tell you how in this blog post! 💡🎯
Table of Contents
- How to Sell Your Products on Amazon Without Inventory
- What Is Amazon FBA and How Does It Work?
- Benefits of Amazon FBA
- Disadvantages of Amazon FBA
- What is Amazon Dropshipping and How Does It Work?
- Benefits of Dropshipping on Amazon
- Disadvantages of Dropshipping on Amazon
- What is 3PL Logistics and How Does It Work?
- Benefits of Working with a 3PL Company
- Disadvantages of 3PL Logistics
- Selling Digital Products on Amazon
- Which One is the Best Option for Selling On Amazon Without Inventory?
How to Sell Your Products on Amazon Without Inventory
It’s impossible to imagine a brick-and-mortar business running without inventory, but the magic of the internet and digitalization has given eCommerce another advantage. In short, eCommerce sellers can buy and sell on Amazon if they adapt to one of the business models below:
- Amazon FBA
- Third-Party Logistics
- Selling Digital Product
In the following, we’ll explain each option in detail with pros and cons to draw a complete picture for you.
What Is Amazon FBA and How Does It Work?
FBA is a fulfillment method in which Amazon sells and ships products on behalf of third-party sellers. Amazon takes care of storage, shipping, returned orders and customer service for these sellers. In return, the sellers pay Amazon a commission on each sale. Amazon FBA is a great opportunity for you to sell to a vast customer base without owning inventory and logistic infrastructure.
Sellers just need to send their items to Amazon’s fulfillment centers, and Amazon will take care of the rest. Amazon FBA can be a great way to start or grow an eCommerce business with little upfront investment. It’s important to note that FBA is not suitable for every type of product. Sellers must be sure that their products are compatible with Amazon’s fulfillment program before signing up.
Benefits of Amazon FBA
1. You Can Reach More Customers
When you use Amazon FBA, your products are eligible for Prime shipping, which means they will be delivered to customers in two days or less. This is a huge benefit as customers are more likely to purchase products they know will arrive quickly. Additionally, your products will also be eligible for Amazon’s Prime Now service, which delivers items within one hour. This gives you a major advantage over sellers who are not using FBA.
2. You Don’t Have to Worry about the Fulfillment
By enrolling in the FBA program, Amazon will take care of all of that for you. That saves so much time and effort to focus on other aspects of your business.
3. Your Products Will Be More Visible on Amazon
When you use Amazon FBA, your products will be given preferential treatment on the Amazon website. They will be featured more prominently in search results and on product pages. This increased visibility will lead to more sales and help you grow your business.
4. You’ll Get Access to Valuable Data
When you use Amazon FBA, you’ll have access to valuable data about your customers and their buying habits. That data helps you make better decisions about what products to sell and how to market them. Additionally, you’ll be able to track your inventory levels and see how quickly your products are selling. This information is invaluable for growing your business.
5. You Can Focus On Other Aspects of Your Business
When you use Amazon FBA, you can focus on other aspects of your business because you won’t have to worry about storage, shipping, or customer service. This allows you to grow your business in other ways and makes it easier to scale
6. You’ll Have Access to Amazon’s Customer Service
If there are any problems with your products, you can take advantage of Amazon’s world-class customer service team. They will be able to help you resolve any problems quickly and efficiently.
Disadvantages of Amazon FBA
1. You Have to Pay Fees
The first disadvantage of using Amazon FBA is that you have to pay fees. These fees can include the cost of shipping your products to Amazon and storage and fulfillment fees. While these fees can be pretty high, they are often offset by the increased sales you will see using Amazon FBA.
2. You Have Less Control over Your Business
Another disadvantage of using Amazon FBA is that you have less control over your business. This is because you rely on Amazon to store, fulfill, and ship your products. While Amazon is typically very reliable, there have been instances where products have been lost or damaged in their fulfillment centers. That can be a pressing problem if you are selling high-value items.
3. You May Need to Adjust Your Pricing
Finally, one more disadvantage of using Amazon FBA is that you may need to adjust your pricing. This is because Amazon takes a percentage of each sale that is made through its platform. So make sure that your prices are high enough to cover Amazon’s fees while still being competitive with other sellers.
What is Amazon Dropshipping and How Does It Work?
Dropshipping is a process whereby a seller lists products for sale on Amazon without actually having the items in stock. When an order is placed, the seller then contacts the supplier, who ships the product directly to the customer’s door.
Dropshipping is an attractive option to start selling on Amazon without inventory and upfront investment. Furthermore, it’s relatively easy to set up a dropshipping business; all you need is a computer and an internet connection. But there are several downsides to dropshipping that potential sellers should be aware of:
- Margins can be razor-thin, making it difficult to earn a profit.
- Your supplier might run out of stock or otherwise be unable to fulfill orders.
- Dealing with returns can be complicated and time-consuming.
Despite these challenges, Amazon dropshipping remains a popular option for many e-commerce businesses.
Benefits of Dropshipping on Amazon
1. You Can Start With Little to No Money
One of the biggest benefits of Amazon dropshipping is that you can start with little to no money. Unlike a traditional brick-and-mortar business, you don’t need to invest in inventory or rent space for a store.
2. You Don’t Have to Handle Shipping or Returns
Another big benefit of Amazon dropshipping is that you don’t have to handle shipping or returns. When somebody orders from your store, your supplier will ship it directly to them. And if a customer needs to return a product, they can simply send it back to them – you don’t have to worry about it. That saves you time and hassle to focus on other aspects of your business.
3. You Can Sell Products From Multiple Categories
Another benefit of Amazon dropshipping is that you can sell products from multiple categories. Unlike a traditional brick-and-mortar business, typically limited to selling products from one category, Amazon offers millions of products across dozens of categories. That gives you so much flexibility in choosing the products you want to sell in your store.
4. You Can Automate Almost Everything!
Finally, one of the biggest benefits of Amazon dropshipping is that you can automate many aspects of your business. Numerous software programs and services available can help you automate various tasks related to running your store, such as listing products, processing orders, and sending shipping notifications. This automation can save you time and help you run your business more efficiently.
Disadvantages of Dropshipping on Amazon
1. You Have Less Control Over Your Business
You must play by Amazon’s rules when you dropship on Amazon. This means that you can’t sell certain products, offer certain promotions, or use certain marketing strategies. This can be frustrating for entrepreneurs who want to have complete control over their businesses.
2. You’re at the Mercy of Amazon’s Algorithm
Another downside of Amazon dropshipping is that you’re at the mercy of Amazon’s algorithm. This algorithm determines which products are displayed when customers search for certain keywords. Shipping time is one of the major factors and dropshippers can’t compete with Amazon prime’s 2-day and same-day delivery; thus, your dropshipping listing might be buried on page number 2 or 3.
3. You Have to Compete with Other Sellers
When you dropship on Amazon, you have to compete with other sellers who are selling the same or similar products. This can be difficult, as you need to differentiate your product in some way. Otherwise, customers will just choose the cheapest option with the fastest delivery.
4. Shipping Times Can Be Long
Another downside of Amazon dropshipping is that shipping times can be quite long. This is because suppliers ship products from their warehouses, which are located all over the world. So if you receive an order that should be shipped from a warehouse in China, it could take weeks for the product to arrive.
5. You Might Have to Deal with Returns
Finally, another downside of Amazon dropshipping is that you might have to deal with returns. This is because customers can sometimes change their minds about a purchase, or they may receive a defective product. If this happens, then you will have to deal with the return yourself, as Amazon will not do it for you.
What is 3PL Logistics and How Does It Work?
3PL logistics providers can take on many of the tasks associated with running an eCommerce business, including storage, packaging, and shipping. This can be a great way for Amazon sellers who don’t own an inventory to outsource the fulfillment process and focus on other aspects of their business. 3PL providers have the infrastructure to store and ship products and can often provide discounts on shipping costs.
In addition, 3PL providers can offer value-added services such as product packaging and returns processing. By outsourcing fulfillment to a 3PL provider, Amazon sellers can free up time and resources to grow their business.
Benefits of Working with a 3PL Company
1. Increased Efficiency
Working with a 3PL company can help increase your supply chain’s efficiency. 3PL companies have the staff and resources necessary to manage your inventory, ship your products, and track your shipments. This can free up your time so that you can focus on other aspects of your business.
2. Reduced Costs
Another advantage of working with a 3PL company is that it can help to reduce your costs. 3PL companies often have volume discounts with shipping carriers, which they can pass on to their clients. Additionally, 3PL companies can help you to optimize your shipping routes so that you are not spending more than necessary on shipping.
3. Improved Customer Service
Working with a 3PL company can also help to improve your customer service. 3PL companies can provide order tracking information to your customers to always know where their order is. Additionally, many 3PL companies offer customer support in case there are any problems with an order.
4. Access to Technology
When you work with a 3PL company, you will also have access to their technology. This includes their warehouse management system (WMS), which can help you to keep track of your inventory and orders. Additionally, many 3PL companies use transportation management systems (TMS), which can help you to plan and track your shipping routes.
Another advantage of working with 3PL logistics is that it provides you with flexibility. For example, if you experience an increase in sales, a 3PL company can quickly scale up its operations to meet your needs. Additionally, if you need to downsize your operation, a 3PL company can easily adjust its services accordingly.
Disadvantages of 3PL Logistics
When you work with a 3PL company, you lose control over your supply chain. This is because you are relying on another company to manage and oversee your logistics operations. While most 3PL companies are reliable and trustworthy, there may be times when things don’t go as planned. That might be frustrating, especially if you are not used to working with someone else to manage your supply chain.
Selling Digital Products on Amazon
In today’s digital age, it’s easier than ever to sell products online without having to carry any inventory. Amazon is one of the largest eCommerce platforms in the world, and they allow third-party sellers to list and sell their products on their sites. So, if you have a digital product that you want to sell, you can list it on Amazon and start making sales without having to worry about stocking inventory or fulfilling orders.
Note: Although selling non-tangible products such as games, software, and audiobooks is allowed, you can’t buy and sell NFT on Amazon.
Which One is the Best Option for Selling On Amazon Without Inventory?
Among all the options mentioned above, Amazon FBA is the best option for selling without inventory in general. Amazon is in charge to pick, pack, and ship your products for you. They will also provide customer service and handle returns. This means that you can sell on Amazon without having to worry about any of the logistics. But the limited storage and ever-increasing fees might get you into trouble with FBA. In that case, outsourcing to a cost-effective and professional 3PL company is the best option!
You now have more options than ever when it comes to selling on Amazon without owning an inventory. You can set up your business to work with Amazon FBA, Dropshipping, Third-Party Logistics, or Selling Digital Products. No matter which option you choose, Eva can help you level up your business.
With more than 20 years of expertise and knowledge in the eCommerce industry, Eva will guide you through every step of the process so that you can succeed in this competitive market. Don’t wait any longer; contact Eva today to get started on building a thriving eCommerce business!