If you are someone who has a time and space problem, but wants to sell on Amazon? If yes, then keep reading. Here we will discuss how to sell on Amazon without inventory using various methods, their benefits and disadvantages and some effective tips to increase the sales of your products.
Amazon, the giant of the ecommerce industry, has come up with many innovative ideas that allow people to sell online and one of them is the Amazon FBA program. It is a model that lets individuals sell products on Amazon with low investment and without any physical inventory.
There are also some other options like dropshipping that can be used to sell on Amazon without holding any physical inventory, perfect for the people not wanting to hassle with stockpiles. Sounds fascinating, right?
If you are also someone who has a time and space problem, but wants to sell on Amazon, keep reading. Here we will discuss how to sell on Amazon without inventory using various methods, their benefits and disadvantages and some effective tips to increase the sales of your products.
How To Sell On Amazon Without Inventory?
Currently, there are three main methods that you can use to sell products on Amazon, which include the following:
- Amazon FBA
- Amazon FBD and third-party logistics company
Here’s what they are and how do they exactly works:
1. Dropshipping On Amazon
Drop shipping is one of the best and unique ways to sell products on Amazon without holding an inventory, especially for new sellers.
Dropshipping basically means that you partner with a product supplier, market their products, and when you receive an order, you transfer all the details to the supplier and then they deliver the order to the customer. There are profit margins that you will get on every sold product.
“But, how does dropshipping exactly work?” you may ask. Well, the process is quite simple.
- Firstly, on Amazon, you will have to create a listing of the products that are in the stocks of your supplier. Make sure to do this part properly as it is exactly what will attract the customers.
- Now, if someone purchases the product, Amazon will notify you. Forward all the details, like product information, customer’s address, etc., to your supplier.
- As soon as your supplier receives the details, the shipping part will begin. They will pack and ship the product to the customer directly.
That’s it. You have successfully sold the product without holding any inventory. But there’s more you need to take care of. If any customer has any complaints or wants to return the product, you are the one who will be in charge. You will have to contact the supplier and arrange the return and refund of the sold products.
Apart from that, ensure that the product’s packaging, slips, and invoices should display you as the official seller of the product. The supplier must not be promoting his brand on packaging of products.
2. Amazon FBA
How to sell on Amazon without Inventory? Try Amazon FBA.
Amazon FBA (Fulfillment by Amazon Services) is another option that you can use to sell products without holding an inventory. By availing this method, you outsource the packaging, storing, and shipping part of the business to the Amazon FBA.
Unlike dropshipping, in the FBA program, you will still have to take care of the inventory part – getting the stock from the manufacturer and sourcing it to Amazon. However, you do not have to worry about storing, packaging, shipping, and even returning and refunding the sold product, as Amazon FBA will take care of it.
You simply have to set up your Amazon FBA account, list the products on Amazon, pack the inventory according to the FBA guidelines, and hand it over to Amazon.
When a customer orders a product, the Amazon fulfillment center will begin packaging it and ship it directly to the customer. Along with that, FBA will also take care of the customer service returns of the sold products. They will charge an upfront fee for providing all of these services.
3. Amazon FBM And Third Party Logistics (3PL)
FBM and third-party logistics (3PL) are two different methods that you can use to sell your products. Both processes have their own pros and cons, and you are free to choose any of them. Just ensure that they have the ability to meet all your desired requirements.
FBM is a method of selling in which a seller is completely responsible for all aspects of the business. They are obliged to store the inventory safely, pack them properly, and ship the product directly to the customers. FBA allows you to take over the fulfillment of your orders, but it takes more time in comparison to other methods.
While utilizing FBA, you must first store the products at your place and list them on Amazon. As soon as you receive an order, process it and finish the packaging part and ship the product with the help of a reputable carrier.
That’s it. You have successfully fulfilled the order!
But, it’s not the end. You must ensure to provide your customers with adequate customer service. If you receive any complaint, inquiry, return, or exchange policy, address them promptly.
B. Third Party Logistic (3PL)
Third-party logistics (3PL) is the best option for sellers who want to avoid storing, packaging, and shipping their products. 3PL means that you come in alliance with a third-party company that will take care of the order fulfillment process on your behalf.
In 3PL, a third-party company handles the storage of your inventory, order processing, shipping, and even customer service.
Since most of the activities are being taken care of by third-party companies, you can focus on crucial parts of business like getting more customers through effective marketing.
But please keep in mind that when you choose this method to sell on Amazon, you barely have any control over the order-fulfilling process.
Therefore, it is a must for you to select a reliable and trustworthy third-party company to make your business a success. Otherwise, it may lead to dissatisfaction among the customers, negative reviews, and returns, ultimately causing you losses.
What Are The Benefits Of Selling On Amazon Without Inventory?
Here are some of the best benefits you get by selling on Amazon without inventory: ‘
- Low Risk – When you are selling without inventory, a very low risk is involved. In methods like dropshipping, you only buy the physical products once they are already sold, you are free from worrying about products’ stocks not getting sold according to your plans.
- Saves You Money – As you are selling without inventory, you do not have to spend money on things like packaging materials, renting a warehouse, dealing with shipping providers, etc., which ultimately benefits you with cost savings.
- Flexibility – Flexibility is one of the best benefits of selling on Amazon without inventory. There’s no physical inventory. Thus, you can easily experiment with your products. Add or remove products without worrying about unsold ones. This will allow you to find what product works best, which will ultimately help in increasing the probability of the success of your business.
Tips To Remember To Sell Better On Amazon Without Inventory
Now you know how to sell on Amazon without inventory. Let’s discuss a few tips that you can use to increase the chances of your success as an Amazon seller.
1. Go Through Amazon’s Policies
Before you start selling on Amazon, become well-versed with its policies so you do not face problems in the future. Amazon’s policies cover a lot of things, for instance, the information that you are providing regarding your product must be correct.
Otherwise, you may get temporarily or permanently suspended from selling on Amazon.
There are also some products that Amazon doesn’t allow selling, for example, certain electronic items, some hazardous products, and even some branded products. So, always make sure to read Amazon’s policies to operate your business seamlessly.
2. Select The Right Product
The product you choose will have a direct impact on your business’s success. It is advised to spend enough time researching before you list a product on Amazon.
There are many methods that you can use to find a profitable product. For example, find out what’s trending, go through Amazon’s best seller list, consider the weight and size of your product, find out the products with high margins, and analyze your competitors.
3. Do Not Upset Your Customers
The customer is the King! If you want your business to thrive, you can’t ignore the importance of your customers. Even though your business has no inventory, you still have to provide optimal customer service to maintain a profitable business. Always make sure to address your customer’s problems right away and provide them with optimal solutions.
4. Choose The Right Supplier
Sellers with no inventory are completely reliant on a third party for the quality and delivery of the product. Therefore, it is crucial to do proper research before you partner with a supplier.
Firstly, assess your needs and then evaluate whether a particular supplier can fulfill the requirements. While researching a supplier, you can take into account factors like product quality, shipping speed, return policy, and, more importantly, their reputation in the market.
5. Optimize Your Listing Properly
The way you list your product plays a crucial role in its success rate. It doesn’t matter how great your product is, but if it is not listed correctly, chances are less that customers will buy it as it’s not appealing to them.
Thus, always use high-quality images, relevant keywords, captivating product descriptions, and a brief and informative title. All these things will help your product rank and increase the number of sales.
6. Track Your Performance
Tracking can’t be ignored if you want to scale your business. It allows you to find out what is working, what is not working, and where you need to make improvements to increase your sales. You can use Amazon’s Seller Center to get the overall performance of your listed products and make effective decisions.
So, that was your complete guide on how to sell on Amazon without Inventory. This type of business model has given opportunities to many small and big business owners who do not have time or space to hold and manage an inventory. Methods like dropshipping makes it easy to sell online, even allowing people to start a business with low investment and focus on core aspects of the business like marketing.
You can choose any of the three methods mentioned above to sell your desired products. Just ensure to do proper research and know all the ins and outs before you begin selling. It will help you avoid problems and run your business smoothly.
Ansh Sharma is a content writer who possesses the skill of describing different topics in a simple and creative manner. He has a vast interest in crypto and finances, but is also well-versed with many other niches like pets, health, technology, gaming, etc. Apart from writing, he loves to read non-fiction books to continually learn and grow.