how to sell on amazon without inventory
The internet has transformed the way shopping works forever!
As time goes on, online shopping is becoming increasingly popular and that means that there are more ways for people like you and I can find a secondary stream of revenue. One of the largest online marketplaces is Amazon, which got extremely popular due to its quick 2-day prime shipping. In fact, that is one of the main reasons why amazon is so popular.
When Amazon first got popular was solely because you could find better deals than you would when you go to big box stores along with it being so convenient with their shipping options. The years have passed and Amazon is continuing to innovate to give sellers more ways to make money along with giving buyers an even better experience! Now you are able to get many items quicker than their 2-day prime shipping options, which include next and same-day shipping for various items!
Amazon has a learning curve and for a good reason!
When it comes to amazon, many people get intimidated to sell on it compared to selling on marketplaces such as eBay, Depop, or similar marketplaces. This is because Amazon is structured in a way that there is a learning curve. I believe this is done on purpose to weed out the people who are not really serious about selling on the marketplace leading to a decrease in customer experience on the site. Amazon wants to ensure that its sellers are selling the authentic item the customer expected in a reasonable time period.
They have a few measures to ensure their sellers are serious about it selling on their site such as ungating. Ungating is the process of having to get specific approval from amazon to sell on the brand by providing proof how of you got the items. To get ungated from amazon you must be able to show an invoice from a wholesaler or supplier that you bought from them with 10 quantities or more. If you are unable to get an invoice in this fashion then you must have a letter from the company you are selling that you are authorized to sell the brand. This is not a process for every brand but it is for many of the major ones. If you are looking to go big on amazon then at some point you will face the ungating process.
What are the benefits of selling on Amazon without inventory?
Selling on amazon without inventory has a lot of benefits but also comes with some risks. We are going to break down the biggest benefits of doing it!
1. No upfront investment
One of the main things that may stop someone from selling on any marketplace is the amount of capital you need to initially spend. This can be intimidating for various reasons like not being sure if you are able to risk buying inventory at a certain price and being stuck with it.
Having no upfront investment is extremely nice because this eliminates the need to invest in inventory upfront while also keeping cash flow. Not investing capital, will reduce your risk a lot. If you don't have any money invested in your business then what do you have to lose?
2. Limitless options on the products you sell
Having no inventory allows you to sell many different market sectors on Amazon. Many sellers when starting out will focus on one type of product. for example, I started selling shoes and slowly moved away from that as I got comfortable. If I were to do something similar to drop shipping then I would have been able to start selling many different items at once because I would not have to pay for the item until it sold leaving with many more options!
3. Safe and consistent
Amazon is a huge company that is going nowhere any time soon. So if you are able to find good suppliers and a good system then the sky is the limit. If Timmy in his parent's basement can do it then so can you! The problem is not having customers because amazon has over 310 million customers. You just need to find suppliers that you are able to make good margins on and are in demand! This should and will be the hardest part of your journey is finding those suppliers but once you have them and a system down then scaling will be the easiest thing for you to do! HAVING A SYSTEM DOWN IS VITAL TO BEING SUCCESSFUL!
What options do you have to sell on Amazon without inventory?
There are many options for selling on Amazon without inventory but the most popular option is drop shipping and amazon FBA (Fulfilled by Amazon).
What is Dropshipping?
Dropshipping is the process where the seller does not have any of the inventory on hand. When an order comes in then the seller can contact the supplier and purchase it right then and there. Once they purchase it, the drop shipper will send the item to the customer that the seller provides to them. This can work multiple ways but a fully integrated drop shipper can provide an automated system to let them know when an order comes through and to bill you this is not always the case, especially for more "lowkey" suppliers that are off the grid.
The downside of dropshipping is finding one that is reliable and is able to push out the products in a timely manner. The rate at which they are able to ship your orders and the quality of the product the customer receives directly reflects on you. So ensuring you have a supplier that has both your and your customer's best interest is vital to selling on amazon long term.
What is Amazon FBA (Fulfilled by Amazon)
This may not be what you are looking for exactly but we still think its very important for you to at least be in the known that this service is offered to all Amazon sellers. FBA is the process of buying inventory and then shipping it out to Amazon to sell to their customers. If you have ever bought on amazon then it's likely you've seen the section that says fulfilled by amazon and then under that, it says seller and a random name. This means that the seller sent the item to amazon and they handle everything from customer service to shipping the item to their customer. This is also a big plus for Prime customers because this is the only way they will get the option of prime 2-day shipping or faster.
The reason we believe a seller like yourself may not be too interested in this is that you have to purchase the items upfront and ship them to amazon. If you are looking for something with less risk then drop shipping may be the option for you. However, if you have the capital but may not have the room in your home or office then this could be the way for you to process everything out of your house and ship it to Amazon for them to hold and send out as orders come through. One thing to keep in mind with FBA is that if you don't sell the items then amazon will charge you month after month until you have sold the item. In addition to this, if you need the item back because it's not selling or for any other reason then you will have to pay for the item to be shipped back to you!
Is selling on Amazon without inventory right for you?
This is a question only you can answer because no one knows what financial situation you are in nor how much time you have on your hands. If you are looking to get your feet wet while also making a little bit of money on the side then it may be in your best interest to look into the dropshipping option and as you grow move more into the FBA option we also talked about!