How to Sell on Amazon Without Inventory
Amazon is no longer exclusively available to those who have partnered with the company or sent their products directly to Amazon warehouses. In fact, learning how to sell on Amazon without inventory is one of the most popular trends for those interested in shifting to eCommerce sales with little to no experience in online sales.
Knowing how to sell on Amazon without inventory can streamline the production of products and launch processes so you can begin generating revenue as quickly as possible. Using this beginner’s guide to selling on Amazon, discover how you can generate a passive or full-time income without storing your own products.
Fulfillment by Amazon (FBA)
One of the most popular methods to sell products on Amazon is Fulfillment by Amazon, also known as FBA. FBA allows users the ability to sell products by shipping them directly to Amazon warehouses. Once the products successfully arrive, Amazon takes care of the rest, from warehouse storage and organization to shipping logistics and delivery confirmations.
Pros and Cons of FBA
Using FBA has many advantages as well as drawbacks. Some of the most notable benefits of using Fulfillment by Amazon include:
- The ability to send products directly to Amazon, eliminating the need for warehouse space
- Boosting the visibility of your products by using Amazon’s prestige
- 24/7 customer support directly from Amazon
- Access to one of the largest global fulfillment networks
- An all-inclusive fulfillment and shipping solution that allows you more time to focus on other aspects of your business
- Flexible solutions that enable you to work at your own pace, even if you are new to eCommerce selling in any capacity
While there are many perks to using FBA, there are some drawbacks, including:
- Referral and commission fees for selling individual items
- Lack of notifications when inventory is low requires you to manually keep track of items in stock
- Storage fees can add up, depending on the products you are storing vs. your selling rate and profit margin
- Lack of control in terms of pricing and fees, as these are typically dependent on relevant markets
How to Get Started With FBA
Getting started with FBA is simple and does not require extensive training or preparation. To begin, you will need to complete the following steps:
- Create your Amazon seller’s account. From here, you can learn more about selling on Amazon and the various fees or monthly costs you may be required to pay depending on the type of platform you intend to use.
- Set up your FBA account from Amazon’s seller account portal.
- Create the listings for your product(s) and specify the type of FBA inventory you intend to send directly to an Amazon warehouse.
- Prep your products by following Amazon’s packing guidelines. Compare Amazon FBA shipping rates and options. You can also review the current Amazon routing and shipping requirements list to verify the steps you need to take based on your products and current location.
Dropship on Amazon
Dropshipping is another popular method of selling products online without managing inventory, and it has been around for years, even before Amazon was created.
Dropshipping on Amazon involves marketing and selling products that you do not store or maintain yourself. By selling items via a dropshipping method, you are typically only responsible for promoting and selling the products. Your preferred dropshipping provider will help fulfill the order and maintain the inventory they are responsible for at all times.
Pros and Cons of Dropshipping
Using dropshipping has a few benefits that make it an appealing business model, including:
- Low to no-cost startup: Using a dropshipping solution to sell is one of the lowest-costing eCommerce solutions available to begin selling products for a profit.
- Test products faster: Test the viability of products via this method is much faster than creating your own products and purchasing too much in inventory.
- Gain valuable insight: Learn more about the online audience you have and the demographics you are trying to reach by selling a variety of dropshipping products while collecting data and analytics in real-time.
Some drawbacks of using dropshipping on Amazon might include:
- Lack of flexibility: You will not have much flexibility over how you design your products, as you are limited to another manufacturer’s products.
- Hit or miss: There is no guarantee that a dropshipping website’s products will succeed or please customers.
- Competitive: The dropshipping industry is full of competition.
Getting started with dropshipping requires the ability to select the right niche, research current competitors, and locate a dropshipping provider that you can trust and rely on.
Third-Party Logistics (3PL)
If you cannot find an Amazon no-product platform that is suitable for you or if you are seeking alternative options, consider using a third-party logistics (3PL) company.
A 3PL is a service or provider that offers eCommerce professionals assistance with managing inventory. Rather than using Amazon or a dropshipping service for inventory storage, a 3PL solution provides a third-party, all-inclusive warehouse storage and shipping solution.
Here’s what a 3PL service includes:
- Inventory management and warehouse storage
- Collection, receiving, and inspecting
- Pick & Pack services
- LTL, FTL shipping solutions
- Reverse logistics
Benefits of 3PL:
- Increased management freedom
- Save time to focus on other areas of business
Cons of using 3PL solutions:
- Lack of control over physical inventory
- Less flexibility over product distribution
- Inability to monitor quality at all times
- May have expensive startup costs
To get started with a 3PL solution, you must first research the audience you intend to reach and reputable third-party logistics companies in your area. Consider the volume of business you anticipate generating and the type of features and shipping services offered before choosing your preferred 3PL solution.
Sell Digital Products on Amazon
Another way to make money on Amazon without inventory is by selling your very own digital products.
What are Digital Products?
Digital products can include everything from downloadable audiobooks to digital versions of your books and print-on-demand products, such as selling t-shirts on Amazon or art prints.
Pros of Selling Digital Products
- Low to no startup costs or investments
- Accessible to anyone, even those with little to no eCommerce experience
- Ability to set your price and profit margins
Cons of Selling Digital Products
- Highly competitive and overly saturated in some markets
- Difficult to garner visibility and reach when first entering the market
- No guarantee of sales or success
- High commission fees
Selling digital products on Amazon is possible as a traditional seller if you intend to sell uploaded books, audiobooks, or documents. However, if you want to sell print-on-demand or POD products such as t-shirts or coffee mugs, you will need to register with a third-party POD service. You can then sync your POD service with your Amazon account to promote your print-on-demand products.
Knowing how to sell on Amazon without inventory or with a built-in Amazon platform can help you decide which path is right for your next venture. From using an FBA service to using a dropshipping solution, there are endless opportunities to build a six-figure Amazon business without inventory once you are familiar with the system.
To ensure your endeavor takes off, use Helium 10 to optimize your listings and identify the trendiest products to sell. Helium 10’s product suite can help you to strategize and execute a marketing plan that works for any Amazon presence you create.
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