Ready to start your ecommerce business without investing a fortune?
You're in luck!
Selling on Amazon without inventory is the perfect way to get your business off the ground.
In this article, we'll guide you through three simple strategies that you can use to launch an Amazon store with little or no money upfront – so let's dive in!
Amazon FBA vs. FBM
When it comes to selling on Amazon, you can use Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM).
With Amazon FBA, you send your inventory directly to an Amazon warehouse, and then they take care of all the order processing and shipping for your orders.
This can be beneficial if you want to utilize Amazon's extensive delivery network, but it often comes with higher per-item costs.
Also, since you must have a stock of products to use FBA, it's not the option you'll use when selling on Amazon without inventory.
With FBM, you handle all orders and arrange your own delivery service.
In other words, it's perfect for selling on Amazon without inventory!
3 Strategies to sell on Amazon without inventory
You can use various strategies to sell on Amazon without keeping products in stock.
But considering there is no one-fits-all solution, we will discuss the most popular methods and guide you on what fits you best!
Here are three business models for selling products on Amazon without inventory:
- Print on demand
- Digital products
Let's check them out one by one, starting with dropshipping!
If there is one business model that fits best with selling products without inventory, it's dropshipping.
Amazon dropshipping is a business model where you list your products on Amazon and sell them without keeping them in stock. Your supplier is responsible for shipping the products to your customers on time. Your job is to create an excellent product listing on Amazon.
If this sounds confusing, don't worry, it's actually quite simple!
Here's how the dropshipping model works on Amazon:
- You create an Amazon seller account.
- You find a dropshipping supplier that meets Amazon's dropshipping policy (more on this later).
- You create Amazon listings for your product(s).
- Once you get an order, you place that same order with your supplier.
- Your supplier ships the product(s) directly to your customer.
And for visual learners, here's an infographic that explains it:
One of the key benefits of dropshipping is that you can start selling a wide range of products without investing in inventory.
It allows you to test many product ideas without any upfront costs!
And let's not forget about the flexibility dropshipping offers.
Want to expand your product offerings without worrying about storage space? No problem.
Want to test out new products without committing to a huge inventory purchase? Easy peasy.
Dropshipping makes it all possible.
Here is an overview of the pros and cons of dropshipping:
|Low startup costs.||The dropshipping mindset.|
|Quickly test products without an inventory.||High competition.|
|Your supplier handles shipping and logistics.||Less control over shipping and product quality.|
|Creating a new Amazon seller account doesn't take long.||Profit margins can be slim.|
|It's possible to start earning profits in the short term.||Refunds can be complicated.|
|Difficult to build a brand identity.|
|It's challenging to find a supplier that meets Amazon's dropship policy|
Yes, dropshipping, in general, has more cons than pros. However, there are always methods to deal with those cons and make them less apparent! (You can find more about these methods here.)
And regarding the dropshipping suppliers, some manufacture the products, while others are a middleman between the factory and you (so they provide the ‘dropshipping service').
Either way, there's one thing all dropshipping suppliers have in common; they can store, pack, and ship your products directly to your customer's door.
However, dropshipping on Amazon isn't as simple as dropshipping on your own online store.
You see, while it is technically possible to do dropshipping on Amazon, you will have to comply with Amazon's dropship policy.
And this policy makes Amazon one of the most challenging platforms to use for dropshipping:
As you can see, dropshipping on Amazon is generally acceptable, but you will have to find a supplier that:
- Identifies your dropshipping store as the seller of the product (on all packaging slips, invoices, external packaging, etc.).
- Removes any information on the product associated with them.
- Accepts responsibility for accepting and processing customer returns for you.
- Complies with all other applicable Amazon policies.
Amazon also says that dropshipping by purchasing products from another online retailer (such as AliExpress) and having that retailer ship directly to your customers is not allowed.
If you're determined to do dropshipping on Amazon, you would have to find a private label dropshipping supplier that can identify your business as the seller of the product and accept customer returns for you.
Another option is to find a private dropshipping agent (which we will discuss shortly).
And if you don't want to deal with Amazon's dropship policy, there are two other routes to take:
- Start dropshipping by creating an online store (on an ecommerce platform like Shopify).
- Sell on Amazon using the Amazon FBA (Fulfillment by Amazon) model.
If you want to start dropshipping, we recommend using an ecommerce platform like Shopify. That way, you will have your own store and won't have to comply with any dropship policies from third-party marketplaces!
Dropshipping with private agents
A private dropshipping agent is a middleman between you and your dropshipping supplier.
They will source, store, pack, and ship your dropshipping products. Furthermore, they ensure you get the best price, quality, and delivery times for your product.
For example, a dropshipping agent can
- Do quality checks for your product.
- Ensure you get identified as the seller on the packages (for Amazon's policy).
- Support you with branding, private labeling, and white labeling.
- Select the best shipping methods for your target country.
- Provide help in case of shipping delays or broken products.
- Accept returns for you.
- Update you on the latest product and shipping trends.
Sounds pretty good, right?
Here's an infographic of six reasons to use a private dropshipping agent:
2. Print on demand
Have you always dreamed of selling products that you've designed yourself?
If so, you can do it with print on demand (POD).
And the great part is, you don't need to keep an inventory for it!
Print on demand is a business model where you design graphics printed on products like T-shirts, hoodies, or mugs. Once you receive an order on your POD store, you forward it to your POD supplier, who prints your graphics on the product and ships it directly to the customer.
Here is an infographic on how it works:
As you can see, print on demand is one of the closest alternatives to dropshipping!
Products sold in POD stores are often apparel such as shirts and hoodies. But you can also sell products like mugs, towels, art prints, phone cases, and even notebooks or mousepads!
|A POD store is as easy and low-risk to set up as a dropshipping store.||POD businesses generally struggle with tight profit margins.|
|Ability to (partly) design products yourself.||It can be more challenging to deal with returns as the product is custom-made. (More info here)|
|You will never have to deal with any leftover inventory.||Your store is only as good as your designs.|
|Often, you don't have complete control over the product's look.|
When comparing print on demand to dropshipping, we see the following:
The main difference between dropshipping and print on demand is that with dropshipping, your supplier doesn't make any changes to the product, and the shipping time can be faster. In contrast, with print on demand, your supplier creates the product according to your custom design, and the shipping time can be longer.
Here's an infographic that summarizes all differences:
If you're creative, print on demand may sound like a great opportunity.
But remember that if you want to do print on demand on Amazon, you'll have to deal with the same restrictions you get with dropshipping.
So, be sure to read Amazon's dropship policy and find a print on demand supplier that complies with it.
Luckily, that isn't as challenging as finding an Amazon dropshipping supplier, as Amazon offers its own print on demand supplier service!
It's called Amazon Merch on Demand, and it allows you to upload your artwork, after which Amazon will handle production, shipping, and customer service – all with no upfront costs:
If you would like to learn more about the print on demand business model, take a look at the following articles:
- Is Print on Demand Still Profitable Today in 2023?
- How to Start a Print on Demand Business in 2023 (8 Steps)
3. Digital products
This one may be very obvious to you, or it may be a total surprise!
When most people think of selling products through Amazon, they typically envision a physical product like a phone case or clothing item.
However, an increasingly popular type of online product is digital content.
When selling digital content, your products are stored in the cloud and can be copied without additional costs. In other words, you can sell digital products on Amazon without an inventory!
Digital products can be downloaded or accessed online, such as ebooks, software, or online courses.
For example, here are the top-selling e-books on Amazon, which are all digital products:
And there are many more kinds of digital products! Just think about things like templates, stock photos, or music.
The best thing about selling digital products is that there are no production or shipping costs – once you create the product, you can sell it infinite times.
Here are the pros and cons of selling digital products:
|It doesn't cost you anything extra to sell an additional digital product (once it's developed).||Someone can easily copy and sell your digital products without your permission.|
|You are in complete control of the pricing.||Digital products may require ongoing support and maintenance.|
|Digital products can instantly be sold and delivered to anyone with an internet connection.||Marketing digital products can be more difficult.|
How do you start selling on Amazon without inventory?
Do you want to start selling on Amazon without inventory but have no idea where to begin?
If so, here are the nine steps you can take to get started:
- Come up with your product idea
- Choose one of the three business models: dropshipping, POD, or digital products
- Create an Amazon seller account
- Find a supplier
- Define your ideal target audience
- Create your Amazon product listing
- Wait for organic sales to come in, or set up your Amazon product ads
FAQs about selling on Amazon
If you have more questions about selling on Amazon without inventory, check out the FAQ section below:
How to make money on Amazon without selling physical products?
To make money on Amazon without selling physical products, you can sell digital products like ebooks, music, or digital art.
Can I sell on Amazon without products?
Yes, it is possible to sell on Amazon without products. You can sell on Amazon using dropshipping or print on demand (with Amazon Merch on Demand).
Can you do dropshipping without inventory?
Dropshipping is always without inventory, as selling products without having them in stock is part of the definition of the dropshipping business model.
Is it better to have inventory or dropship?
Having inventory gives you control over the product and allows for quicker shipping times, but it also requires investment and storage space. Dropshipping allows for lower upfront investment and less storage space, but shipping times may be longer.
The best option depends on your business goals, budget, and available resources!
More places to sell online without inventory
Not sure yet about using Amazon to sell products online? Or are you curious about what else is out there?
We've got you covered! Check out the lists below to find more places to sell online without holding any inventory:
- Sell on BigCommerce Without Inventory
- Sell on Shopee Without Inventory
- Sell on Shopify Without Inventory
Plus, don't forget to check out our main how to sell products online without inventory guide here!
Before we go to the final verdict, we've created a quick summary of this article for you, so you can easily remember it:
- You can use dropshipping, print on demand, or sell digital products to sell on Amazon without inventory.
- Dropshipping is a business model where you don't keep the products you sell in stock; when you receive an order, you purchase the same product(s) from a supplier who then ships directly to the customer.
- Print on demand (POD) allows you to design graphics printed onto items like T-shirts or mugs that are also shipped directly from the supplier to the customer.
- Digital products are stored online and can be copied infinitely with no additional cost – examples include ebooks, software, or online courses.
Now that you know how to sell on Amazon without inventory, it's time to start!
These three strategies should help you start selling without your own inventory.
You can dropship products, create print on demand products, or sell digital products.
Once you find the best suppliers for your product, you're ready to start creating your Amazon listings and start receiving your first sales!
Are you ready to get started selling on Amazon without inventory?
Want to learn more about Amazon?
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