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Originally published on January 3, 2023, updated June 21, 2024
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Space is expensive. For small eCommerce businesses, investing in the space required to store products can be one of the biggest challenges in keeping your business profitable. To make sales, you need to have products available when customers want them.
In many cases, buying enough goods to get the wholesale price is important for your profit margins. But the more items you stock up on, the more storage space you have to pay for...unless you choose a business model that lets you sell products without storing the inventory.
In this article, we'll explore how to sell on Amazon without inventory. Keep reading to learn about four great options!
Selling on Amazon without inventory is a great way to minimize costs if you have the right products. Low startup costs and no inventory storage fees mean little financial risk, so it's a great way to test ideas and scale as appropriate. Selling without physical inventory gives you flexibility in the products you offer, allowing you to get new concepts to market fast.
The following methods for selling on Amazon require little involvement with actual physical inventory. Which one is right for your business?
If you want to know how to sell on Amazon without inventory, here's an obvious solution: sell virtual products!
Digital products don’t take up physical space. They only require computer or cloud storage, which is much cheaper than warehouse space.
Merch by Amazon is a print-on-demand program that will print your designs onto physical products. All you have to do is create an awesome design people want to own on a mug, t-shirt, or other item and submit the digital file. Amazon stocks the physical items, adds your designs to them, and fulfills the orders with Prime shipping.
Amazon's Kindle Direct Publishing (KDP) program includes free and simple tools for self-publishing. You have control over everything from book content to audience. To earn more royalty, consider offering your eBook on Kindle Unlimited by enrolling in KDP Select.
You can publish both print and digital formats while retaining ownership of your content. If you choose to offer a print version of your book, Amazon will print the book and ship it to the buyer when you receive a sale. KDP is a great way to sell on Amazon without inventory because there's no need to purchase or store physical items.
Programs such as KDP and Merch by Amazon make it easy to sell books and print-on-demand items on Amazon, but you can also create other types of digital products such as apps, games, or music. You can even record and self-publish audiobooks to sell on Audible! Use your unique talents and perspective to create digital products that resonate with your audience.
While Amazon FBA takes shipping and storage off your plate, you still need to deal with the logistics of getting inventory to Amazon. If you’d prefer a simpler selling model, look into drop shipping. With drop shipping, you partner with a supplier—usually a manufacturer—who supplies the product and ships it directly to the buyer for you.
In this relationship, your role is mainly marketing and customer service. Your job is to establish a brand on the Amazon platform and create attractive product listings that entice customers to buy. Then once a customer makes a purchase, the drop shipper sends it out.
If you go the drop shipping route, you must follow all of Amazon’s drop shipping rules. These include:
For new sellers, drop shipping is one of the fastest and most affordable ways to start selling on Amazon. Just be aware that your reputation depends on the quality of the products and shipping services of the company you partner with.
The Amazon Associates program is one of the world's largest affiliate marketing programs. If you have a strong following on social media, a blog, or other content channels such as YouTube, Amazon Associates might be a great fit.
Here's how it works: monetize your traffic by using link-building tools to direct your audience to your recommended products on Amazon. Earn up to 10% in associate commissions from qualifying purchases and programs.
If you want to sell physical items but don't want to store the inventory, consider the Fulfillment by Amazon (FBA) service. This allows you to outsource storing products and fulfilling orders to Amazon fulfillment centers. Products sold via FBA have fast free shipping through Amazon Prime, which can give you a boost in Amazon's rankings and increase your sales.
Of course, using FBA does mean paying Amazon more in fees. When you factor in storage costs, inbound placement fees, and the labor of organizing and shipping inventory, those fees quickly add up.
Related reading: Amazon FBA Fees: The Ultimate Seller's Guide
Using FBA, you will likely still need to handle inventory as the middleman between the manufacturer you source it from and Amazon. You must ensure your products get to Amazon in packaging that meets FBA guidelines. But you can probably manage that without paying for additional warehouse storage, so this can be a great way to sell on Amazon without inventory.
Another option for selling physical inventory on Amazon without storing it is to use a third-party logistics company (3PL), which essentially provides the same service that Amazon does with FBA. You ship the inventory to the 3PL warehouses, and they handle storage and fulfillment.
Running a successful eCommerce business doesn’t have to involve physically fulfilling orders. Whether you're looking for a side hustle or to diversify your business, selling on Amazon without inventory can be a great option.
Do your research, get to know your audience, and be prepared to pivot quickly as trends change, particularly if you're selling print-on-demand merchandise. Good luck!
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