In the past, you could become an Amazon seller only if you partnered with the company and shipped your products directly to its warehouses. That’s no longer the case, and you can sell products through this famous and reputable eCommerce provider, both physical and digital, without having stocks at Amazon fulfillment centers.
Now you’re probably wondering how to sell on Amazon without inventory and what the most affordable or worthwhile option is. Read on to learn everything you need about the offered options and the pros and cons of each.
Ways To Sell on Amazon Without Inventory
There are four common ways for prospective Amazon sellers to start selling their products through the Amazon store, and these are:
- Fulfillment by Amazon (FBA)
- Third-party Logistics (3PL)
- Amazon Dropshipping
- Digital Products
These options cater to different types of sellers, so let’s review them in more detail.
Fulfillment by Amazon (FBA)
FBA is the best way to sell on Amazon without inventory for many sellers. If you are considering becoming an FBA seller, all you need to do to start your online business is prepare a product and ship it to the nearest Amazon fulfillment center. Amazon picks up from there, as it takes care of storing, packaging, and shipping your products to their buyers.
Owing to these benefits, many people become FBA sellers. Furthermore, you benefit from the following if you choose this selling method:
- 24/7 customer support
- Improved visibility of your product
- Possibility to work at your own pace
- Access to Amazon Prime customers
- Optionally, you can use retail arbitrage to find products at discounts that meet customer demand
However, to make money on Amazon without inventory in this manner, you must accept the following drawbacks:
- Prices are dictated by the market, and you may have little say in this
- Lack of notifications in case of stock decrease in the FBA inventory
- Potentially high FBA fulfillment storage fees in the Amazon warehouse, depending on the product size and weight
Although many sellers find FBA fees high, they still stick to this option because of the following features:
- They don’t have to provide customer support to shoppers as Amazon takes care of it.
- Access to Amazon’s large storage centers where their inventory is safe. Each time an order comes in, Amazon ships the product on their behalf.
- Sellers benefit from free two-day shipping for Amazon Prime customers. As such, their product is exposed to 200 million Amazon Prime members, which leads to more sales.
So, if you’re unsure how to sell on Amazon without inventory and keep eCommerce sales simple, this is the way to go.
Third-Party Logistics (3PL)
If you find that Amazon charges overly high fees for its warehouse space, there are several types of 3PL providers that could help you maximize profits. So, if there aren’t any Amazon no-product platforms that work for your goods, you can also use third-party logistics.
This option allows you to sell products online via Amazon and eliminates the need for your own warehouse space. However, note that this eCommerce selling option is worthwhile only if you can find a third-party provider that’s more affordable than Amazon, which may be challenging.
To benefit from the potentially lower costs of third-party logistics, search for a 3PL provider that offers packing, shipping, and customer support services from their third-party fulfillment center.
Before deciding to sell on Amazon without inventory through third-party providers, you should take the following pros and cons into consideration:
|Reverse logistics Inventory management More time for you to focus on other aspects of online sales
|You don’t control the physical inventory Startup expenses could be on the higher side You can’t control quality in every stage of the process Limited flexibility regarding the distribution of your product
Another thing to keep in mind before choosing a third-party provider over the FBA program is that you might encounter potential issues with shipping.
If you sell on Amazon without inventory and they cause damage to your goods, for example, they’ll take the blame and compensate you. On the other hand, if a third-party provider causes such damage, getting reimbursed may prove challenging.
Dropshipping by Amazon is another popular option for retail sellers who don’t want to purchase inventory. It involves creating an Amazon storefront, also known as a product listing and a product detail page. Every time a buyer orders an item, you buy it from the manufacturer, who then sends it to the customer.
If you choose the dropshipping method to sell on Amazon without storing a product, you only need to promote and sell the items. Your dropshipper will be responsible for filling the order and keeping track of the inventory.
If you choose Amazon dropship, you can take advantage of the following benefits:
- Affordable services that will help you kickstart your eCommerce business.
- Receiving data and analytics in real time, which allows you to learn more about your online audience and the demographics you wish to target.
- Checking out market demand by using existing products before creating your own, based on the performance of others’ goods.
Even though these pros sound great, it’s advisable to learn about the downsides before choosing dropshipping to sell on Amazon without holding inventory.
There are also some cons that pertain to dropshipping:
- Finding a reliable dropshipping provider tends to be tricky as the dropshipping industry is highly competitive.
- Since the manufacturer designs the products, you won’t have much influence over product quality and appearance.
- There is no guarantee that a dropshipping website’s products will succeed or meet customers’ needs and expectations.
Amazon Dropshipping Rules and Regulations
Selling on Amazon without inventory in this manner is subject to the company’s dropshipping policy. Some principal rules you’ll have to follow by choosing this option are:
- Your chosen supplier agrees to let you be their only dropshipping representative on all invoices, external packaging, and packing slips.
- You’ll have to delete any mention or sign of a third-party dropshipper from your products before shipping.
- If any info or contact details belong to another seller on your product, you must remove them.
- You’re not allowed to buy other online retailers’ products and have them delivered to your customers.
- You’ll have to deal with customer returns for your products by yourself.
Digital and Print-on-Demand Products
Knowing how to sell on Amazon without inventory will also come in handy if you wish to sell intellectual property online, as these processes are quite similar. Besides selling digital products, such as music, ebooks, and digital art, you can sell t-shirts and other print-on-demand (POD) products this way.
To sell digital products like ebooks and audiobooks on Amazon, all you need to do is upload them. But if print-on-demand products are your trade, you must search for a third-party POD service to register. After that, you can synchronize the service with your Amazon seller account and promote the product among your customer base.
Benefits of Selling on Amazon Without Stocking a Product
Aside from individual strengths relating to the chosen method, let’s take a look at some general pros of selling products without inventory on Amazon:
- Amazon protects sellers against fraud.
- Traders avoid substantial upfront investments, which reduces the risk and allows them to direct cash flow elsewhere.
- Amazon’s transport system is reliable, fast, and safe, so customers get their goods reasonably quickly.
- Sellers get access to a substantial customer base through Amazon business. It’s also a great idea to rely on the Amazon keyword research tool to improve your product’s chances of being found.
- People selling on Amazon can focus on improving their goods, advertisements, and customer service responses since they don’t need to deal with logistics issues.
You can start, grow, and improve your eCommerce business by learning how to sell on Amazon without inventory. There is an array of options depending on the type of goods you offer, and you can always switch methods if one doesn’t suit your business style. The best thing is that Amazon is among top-rated wholesale websites and a synonym for online shopping.
Now that you know how to sell products on Amazon without inventory, choose your preferred method and begin selling. But first, read the Amazon policy carefully to avoid potential penalties down the line.