Knowing how to sell on Amazon Marketplace without managing physical inventory can be a game-changer for entrepreneurs and small eCommerce businesses. For many sellers, storing goods can be a major obstacle to profitability, requiring substantial investments in space and inventory. You often buy in bulk to secure wholesale prices and healthy profit margins.
But not to worry! In this comprehensive guide, we’ll show you how to sell on Amazon without inventory. We’ll unveil various strategies, methods, and tools that can help you run a successful Amazon business while sidestepping the traditional inventory-related costs and management headaches.
Whether you’re a seasoned online seller looking to streamline operations on Amazon or a newcomer eager to explore the world of eCommerce, this guide will provide you with valuable insights into the art of selling on Amazon without the constraints of physical stock.
Let’s get started;
How to Sell on Amazon Without Inventory?
Here are five potential ways to sell on Amazon without inventory
- Fulfillment by Amazon (FBA)
- Dropshipping
- Third-Party Logistics (3PL)
- Selling Digital Products
- Amazon Online Arbitrage
1- Fulfillment by Amazon (FBA)
Fulfillment by Amazon, commonly known as FBA, is one of the best ways to sell on Amazon without managing inventory. With FBA, you send your items to fulfillment centers, and they take care of storage, packing, and shipping when orders are placed. Here’s how it works:
Source Products: Find profitable products from wholesalers, manufacturers, or other suppliers.
Ship to Amazon: Send your inventory to Amazon’s fulfillment centers. They handle storage and order processing.
Amazon Ships to Customers: When a customer places an order, Amazon picks, packs, and ships the product directly to the customer’s doorstep.
Customer Service: Amazon also handles customer service and returns, making it a hassle-free way to sell on the platform.
FBA allows you to tap into Amazon’s vast customer base, benefit from Prime eligibility, and leverage Amazon’s customer trust.
2- Dropshipping
Dropshipping is another inventory-less business model that’s gained traction in e-commerce. With dropshipping, you partner with suppliers or wholesalers who stock the products. Here’s how it works:
Choose Products: Select products you want to sell on Amazon from your chosen suppliers.
List on Amazon: Create product listings on Amazon, complete with images and descriptions.
Customer Orders: When a customer places an order on Amazon, you forward the order to your supplier, who then ships the product directly to the customer.
Profit Margin: You make a profit by marking up the price you charge on Amazon compared to the price you pay to your supplier.
Dropshipping allows you to offer a wide range of products without the need for upfront inventory costs. However, choosing reliable suppliers and managing customer expectations regarding shipping times is important.
3- Third-Party Logistics (3PL)
Third-party logistics, or 3PL, is a strategy where you partner with a logistics company to handle inventory management on Amazon, warehousing, and order fulfillment on your behalf. Here’s how it works:
Source Products: Similar to FBA and dropshipping, you source products from suppliers.
Ship to 3PL Provider: Instead of sending products to Amazon, you send them to your chosen 3PL provider’s warehouse.
Inventory Management: The 3PL provider manages your inventory, ensuring it’s stored, organized, and ready for shipping.
Order Fulfillment: When orders come in, the 3PL provider picks, packs, and ships the products to customers.
Using a 3PL provider allows you to maintain control over your inventory and branding while outsourcing the logistical aspects of your Amazon business.
4- Selling Digital Products
Selling digital products on Amazon is a unique way to generate income without dealing with physical inventory. Digital products can include e-books, software, online courses, music, and more. Here’s how to sell digital products on Amazon:
Create Digital Products: Develop or source digital products that cater to your target audience.
Set Up Amazon Kindle Direct Publishing (KDP): For e-books and digital content, use Amazon’s KDP platform to publish and sell your products.
List and Promote: Create compelling product listings and promote your digital products through Amazon’s marketing tools.
Earn Royalties: Amazon pays you royalties based on sales, and customers can download your digital products instantly.
Selling digital products on Amazon allows for scalability, minimal overhead costs, and the potential for passive income.
5- Amazon Online Arbitrage
Online arbitrage is a business model where individuals or businesses buy products from one online marketplace or retailer and then resell them on another platform at a higher price to make a profit. Amazon online arbitrage specifically involves buying products from other online retailers and then selling them on Amazon’s marketplace.
Here’s a basic overview of how Amazon online arbitrage works:
Product Sourcing: Arbitrageurs (those engaged in online arbitrage) search for products that are priced lower on one online platform (e.g., Walmart, eBay, or other e-commerce websites) than they are on Amazon. They look for products that have a significant price difference.
Market Research: Before making a purchase, it’s essential to research the Amazon marketplace to ensure that there’s demand for the product and that it’s not oversaturated with sellers. Tools like Amazon Seller Central and third-party software can help with this research.
Purchase and Shipping: Once a profitable product is identified, the arbitrageur buys it from the source platform. They can then choose to have it shipped directly to Amazon’s fulfillment center using Amazon FBA (Fulfillment by Amazon) or handle the shipping themselves if they prefer FBM (Fulfillment by Merchant).
Amazon Listing: The arbitrageur lists the product for sale on Amazon, creating a product listing that includes details like price, condition, and shipping options. They may also use tools to optimize their listings and monitor the competition.
Pricing and Sales: The arbitrageur competes with other sellers on Amazon by adjusting their prices to remain competitive. They aim to sell the product at a higher price than what they paid on the source platform to cover their costs and make a profit.
Order Fulfillment: If the arbitrageur uses Amazon FBA, Amazon takes care of the order fulfillment, including storage, packing, and shipping. If they are using FBM, they must handle these aspects themselves.
Customer Service: The arbitrageur is responsible for customer service, including handling inquiries and returns and addressing any issues arising from the sales.
Profit Analysis: Regularly analyzing the profitability of each product is crucial. It involves considering Amazon’s fees, shipping costs, and additional expenses to ensure the arbitrage business remains profitable.
Note: Amazon has policies and guidelines for sellers, and not all products or practices are allowed. Sellers must adhere to Amazon’s terms of service and policies to avoid suspension or other penalties.
Conclusion
Selling on Amazon without inventory is possible and can be a profitable venture. Research and plan your approach carefully, considering product selection, pricing, and customer service factors. With the right strategy and dedication, you can build a successful online business on Amazon without the burden of managing physical inventory.
How to Sell on Amazon Without Inventory? Frequently Asked Questions
Can I sell on Amazon without a business licence?
No, a registered business is not required to sell on Amazon. Amazon doesn’t ask you to register your business, but it is conceivable that your local government called for you to do so.
How can I sell on Amazon without buying a product?
Using the Fulfillment by Amazon (FBA) program to sell on Amazon without buying products upfront. Source products are sent to Amazon’s warehouses, and Amazon handles storage, shipping, and customer service. You pay fees based on storage and sales but wait to purchase inventory in advance.
Can I sell on Amazon without a brand registry?
Yes, you can sell on Amazon without a brand registry. Brand registry is optional, and many sellers operate successfully without it. However, brand registry offers benefits like greater control over your listings and protection against unauthorized sellers, making it valuable for some businesses.
