How to Sell on Amazon Without Inventory in 2024

Currently, Amazon is the largest e-commerce platform. On this platform, you can not only buy anything; you can earn a profit by selling your items without keeping any stock.

This platform provides opportunities for those who want to start an e-commerce business on Amazon but are not encouraged to do so due to a lack of inventory, storage space, or shipping.

Also, many people are not aware of this. But the question arises: How do people sell products on Amazon without inventory?

In this article, we will discuss the methods of doing the e-commerce business on Amazon without owning any stock.

Ways to how to sell on Amazon without inventory:

Many third-party sellers are successfully setting up Amazon stores by following a well-known seller blueprint.

This process has proven successful for years, enabling numerous entrepreneurs to turn a profit.

However, inventory management presents a hurdle for some, while others face budgetary constraints in purchasing and maintaining stock.

Recognizing these bottlenecks, Amazon introduced a game-changer: allowing third-party sellers to open stores and sell products without the need for inventory!

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If you want to do the same, you can go with Amazon.

There are four main ways to sell on Amazon without inventory.

• Fulfilment by Amazon (FBA)
• Amazon FBM and Third-Party Logistics (3PL)
• Dropshipping
• Digital products

Now we will discuss these four methods, how they work, and their advantages and disadvantages briefly below.

Fulfilment by Amazon (FBA)

Tired of packing every order, storing inventory in your garage, labeling products (according to Amazon’s requirements), and managing shipments yourself?

Enter FBA: your one-stop shop for fulfilling orders with ease.

With FBA, you send your products to Amazon’s warehouses. When someone buys something from you, Amazon picks it, packs it, and sends it to the customer.

You save time and money because you don’t have to do any of that yourself.

As a major benefit, you can now free up your time to focus on building an attractive store and boosting your profits.

Think of FBA as Amazon being your storage and shipping assistant. They keep your products safe and send them to your customers quickly.

Selling on Amazon without inventory may not be free, but it comes with a major perk: Amazon takes care of all the tasks you don’t enjoy or can’t handle.

In exchange, Amazon takes FBA fulfilment fees based on your product dimension and weight.

In this program, Amazon acts as your logistics partner. Amazon usually takes the burden off the seller and gives them flexibility in their business.

With the help of this service, you can take advantage of Amazon’s updated fulfilment network, and it also offers the freedom to grow your business without any headaches.

Amazon also assists FBA (Fulfilment by Amazon) sellers by providing several benefits, like shipping, global recognition of the Amazon brand, rapid action, etc.

Around 86% of third-party sellers use FBA. Not all sellers find FBA suitable, especially for low-margin products or bulky items due to storage fees.

Some sellers use a mix of FBA and Fulfillment by Merchant (FBM) based on their needs.

How does FBA work on Amazon?

There are some steps to follow to start FBA on Amazon:

Set up FBA

The very first step to creating an Amazon selling account is to set up FBA.

Create product listings

By specifying FBA inventory, you inform Amazon that you want them to handle the fulfilment of your orders through their FBA service.

Prepare products

Pack securely for FBA following Amazon guidelines.

Ship products to Amazon

Take your FBA products to Amazon: plan, label, send. Details here.

When Amazon gets your products at their fulfilment center, Amazon takes responsibility for your products in terms of shipping, returns, and customer service.

Despite the additional FBA seller fees, countless Amazon store owners still prefer to sell through FBA for the following advantages:

Another option instead of FBA is FBM (Fulfillment by Merchant), where you list your products but handle everything yourself, like packaging, shipping, and even customer support.

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Big and heavy things? Skip FBA! For anything else, FBA is usually better than doing it yourself. But in this case, FBM might be more beneficial.

Now, the question is, how do FBM sellers store inventory?

Amazon FBM and Third-Party Logistics (3PL)

In today’s world, when you start an e-commerce business, you must be capable of delivering whatever the customer needs, and it should be on time.

Fulfilling the needs of the customer means ensuring their satisfaction. It also helps to grow your business.

However, as your business grows and expands, you may face problems like difficulty managing storage space, stock, the fulfillment process, and shipping.

And it’s become an extra headache. If you are concerned about storage space or cannot manage stock and shipping, then third-party logistics or FBM could be very helpful.

FBM sellers look to third-party fulfillment when:

• Amazon has a special room size for your things in their big houses. You can’t fill it all at once, just a bit at a time.
• Christmas is coming! Soon, Amazon won’t let anyone store new things in their big houses. But you expect to sell lots then and need more space! What to do?

If get a cheaper 3PL service provider than Amazon FBA only then you should go with a 3PL service provider.

Imagine a giant maze of delivery roads all over the world! That’s what Amazon has. They’ve been sending things for a long time and know exactly how to do it fast.

The benign part is, that if Amazon messes up with your shipping Amazon will recognize it’s their fault and reimburse you the amount whereas if the fault lies with a 3PL service provider, Amazon may not be so accommodating.

How does a 3PL work?

3PL companies offer several services to e-commerce businesses.

First, you have to pay a fee to 3PL, and then they will handle inventory and distribution.

An example of how the 3PL service operates is:

You can send inventory both from your warehouse and directly from the manufacturer to the 3PL. Then 3PL receives and keeps each SKU (stock-keeping unit) in its warehouse.

When a customer places an order, you can submit the order to 3PL, or they will receive it automatically via software.

Then a worker at the 3PL picks up the ordered products and places them in the shipment’s boxes with a receipt.

Finally, 3PL forwards the shipment items to a local shipping service provider.

Amazon FBA vs. FBM: What’s the Best Inventoryless?

The choice between Amazon FBA and FBM (for sellers with inventory who prefer not to store it themselves) comes down to whether you want Amazon or another storage and handling service to take care of sending out your products.

It’s better to pay the fees for Amazon FBA than a third-party service because you get better shipping and can also advertise products, make new offers, and handle inventory, all from one place.

Dropshipping

If you want to sell on Amazon but don’t have money to invest in inventory or storage space, then dropshipping is the right method to apply.

It is the most affordable way for sellers who want to start their own small-scale business because it is a low-cost initiative.

But first, you have to know what dropshipping is and how it works.

It is a sales channel that can give huge returns to sellers. It is a business sample where sellers list their items on Amazon without owning any inventory.

Usually, in Amazon dropshipping, your role is that of a middleman between the customer and the supplier.

You aim to deliver the products to the customer without physically handling them.

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To get success in dropshipping, you must find the right items to sell, mostly those that have high demand and high profit in the market, and build good relationships with suppliers.

Before starting dropshipping on Amazon, it is important to carefully calculate the associated costs and gain a clear understanding of how they will affect your profit margins.

Through research and planning, you have the chance of profitable business on Amazon with dropshipping.

How do I dropship on Amazon?

First, in dropshipping, sellers deal with trustworthy suppliers who will deliver the products on time and supply high-quality products.

They also need to be updated on the supplier’s inventory to avoid products running out of stock.

The drop-shipping process works like this:

A seller receives an order on Amazon, and that order will be forwarded to a supplier, who will then distribute the items directly to the customer.

With this type of business sample, there is no need to bother with stocks and shipping. Because the supplier will do this on behalf of yours.

Digital products

An effective way and answer to how to sell on Amazon without inventory and earn money is by selling digital products on Amazon.

Because Amazon itself is a virtual marketplace, there is no doubt that digital products are listed in the Amazon catalog.

Nowadays, it’s become more popular.

Selling your digital products is a preferred business model because it provides idle income and avoids inventory obstacles.

There is no requirement for storage space because digital products don’t take up physical space.

Digital products only require computers to store the products, it’s also cheaper than warehouse space.

Here are some examples of digital products that can be sold on Amazon:

eBooks

You can sell downloadable audiobooks through Amazon’s Kindle Direct Publishing (KDP) program.

Selling eBooks on Amazon has the potential to generate more profit than physical products. But it all depends on your skills.

Digital Art

Skilled artists can also upload their art and sell it on the Amazon KDP program, and you don’t have to hold any stock.

Amazon’s digital services mainly focus on cloud computing, artificial intelligence (AI), digital streaming, and e-commerce.

Amazon also helps to sell digital content on its digital services account.

Amazon offers entrepreneurs the opportunity to earn on the platform from service fees and subscriptions on account.

Here are some of the services Amazon currently offers:

Amazon Prime Video, Amazon Drive, Amazon Music Unlimited, etc.

How do I sell digital products on Amazon?

Sellers have to create their digital services account to sell their digital services or digital products, which is a very easy process.

To ensure that your digital products find success on this platform, you need to follow a three-step process.

Step 1. Research and analysis:

When you have a digital product that you want to sell, it is important to do research first and find out how other people are selling similar products.

Step 2. Create and modify products:

With the help of your research, you have an idea of what the customer needs. You can create and modify your products based on your customer’s needs.

Step 3. Uploading products to Amazon:

First, you need to create a seller account when your products are ready to sell on Amazon.

Then you can choose an individual plan or a professional plan. Then you need to design a mockup of your products.

Finally, upload your products to Amazon and start promoting them on your social media to get recognized by customers.

Advantages of selling digital products on Amazon

1. Expenditures for startups and investments are low. You don’t need to invest in stock, warehouses, or logistics.
2. Anyone can use it. There is no need to sell physical products here, so you can start this quickly as it is a sale of digital products.
3. Due to its infinitely scalable products, it offers high margins of profit.

Disadvantages of selling digital products on Amazon

1. It may have an extreme rivalry.
2. When you first join this market, you do not get proper awareness.
3. High third-party commission fees.

Conclusion

Knowing how to sell on Amazon without inventory may help you decide which method is best for your future e-commerce business.

Once you understand the concept, there are unlimited opportunities to develop your business.

If you are confused about choosing the methods, then there is an easy way to determine the right method.

First of all, you can compare each method’s price, then look at your capabilities based on finances, and then you can find out your best way for e-commerce business.

If you have any questions related to how to sell on Amazon without inventory, feel free to comment down your thoughts.