How to Sell on Amazon Without Inventory

How to sell on Amazon without inventory is a question asked by various individuals hoping to make money.

According to a 2023 Jungle Scout report, there are over 2 million active third-party sellers on Amazon globally, highlighting the platform’s vast potential for entrepreneurs.

However, the upfront investment in Amazon inventory can be a significant barrier for some.

Fortunately, there are several methods to sell on Amazon without inventory, allowing businesses to participate in the ecommerce marketplace with minimal startup costs.

4 Methods to Sell on Amazon Without Inventory

The Amazon marketplace provides innovative solutions for businesses to participate without the burden of managing physical stock.

In order to sell stuff on Amazon without inventory you can choose to leverage Amazon’s fulfillment network, manage fulfillment yourself, or use a dropshipping model, there’s a strategy to suit your business goals and resources.

The 4 methods to selling on Amazon without Inventory are:

Fulfillment by Amazon (FBA): Leverage Amazon’s vast warehousing and fulfillment network to store, pick, pack, ship, and provide customer service for your products.
Fulfillment by Merchant (FBM): Maintain control over storage, packaging, and shipping of your products while offering greater flexibility.
Dropshipping: Acts as a middleman, connecting Amazon buyers with a third-party supplier who holds the inventory and ships directly to the customer.
Wholesale: Source products in bulk from a wholesaler at a discounted price, then store and fulfill orders yourself (similar to FBM, but you own the inventory).

What is Amazon FBA and How Does it Work?

Amazon FBA allows you to make use of Amazon’s vast warehousing and fulfillment network.

You send your products to Amazon fulfillment centers, and they handle storage, picking, packing, shipping, and customer service for a fee.

The FBA process involves several key steps:

Sending Inventory to Amazon Warehouses

You’ll create a shipment plan in Seller Central, specifying the products you want to send and the fulfillment centers you want them delivered to.

Amazon will provide instructions on packaging and labeling your products to ensure proper identification and handling within their warehouses.

You’ll then ship your inventory to the designated fulfillment centers, following Amazon’s specific guidelines for packaging, labeling, and box contents.

Order Fulfillment by Amazon

Once your products arrive at an Amazon fulfillment center, Amazon will store them securely.

When a customer places an order for one of your FBA products, Amazon’s fulfillment system will automatically pick and pack the item from the nearest fulfillment center for efficient delivery.

Amazon will handle the shipping process, including selecting the most appropriate shipping method based on your customer’s location and chosen service level.

Customer Service Handles by Amazon

Amazon’s customer service team will handle most customer inquiries and issues related to FBA inventory orders, including order tracking, product returns, and exchanges.

You can set preferences within Seller Central to manage specific customer service aspects, such as returns or replacement authorization requirements.

What is Amazon FBM and How Does it Work?

With Amazon fulfillment by merchant, you maintain control over storage, packaging, and shopping of your products. This method offers greater flexibility but requires more involvement on your part.

You’ll be responsible for storing your products in a safe and secure location. This could be your garage, a rented storage unit, or a dedicated warehouse space, depending on the volume of Amazon products you manage.

Once you receive an order on Amazon, you’ll need to package the product securely using appropriate shipping materials.

Amazon provides packaging guidelines to ensure your products arrive undamaged to the customer.

You’ll then select a shipping method through a carrier of your choice, such as Forceget, USPS, FedEx, or UPS, and ship the order directly to the customer.

What is Amazon Dropshipping and How Does it Work?

In the dropshipping model, you essentially act as a storefront curating products for Amazon customers. You leverage a dropshipping supplier who holds the inventory, handles packaging and shipping, and fulfills customer orders on your behalf.

Research and identify profitable products to sell on Amazon. Carefully consider factors like competition, profit margins, and customer demand. List these products on your Amazon sellers account with compelling descriptions, high-quality images, and competitive pricing.

When a customer places an order for one of your drop shipped products, you’ll receive the notification through your Seller Central account.

You’ll then forward the order details and customer information to your dropshipping supplier. The supplier will locate, pack, and ship the product directly to the customer under your brand name.

The difference between your selling price on Amazon and the cost you pay the supplier represents your profit margin.

Selling on Amazon without Inventory: Pros and Cons

There are a couple of Pros and Cons when it comes to how to sell items on Amazon without inventory:

Pros

No upfront investment in inventory allows you to test product ideas and market viability with minimal financial risk. Easily scale your business by adding new products without worrying about managing additional inventory.

Maintain greater control over product selection and pricing strategies compared to FBA.

Cons

Dropshipping suppliers often have higher wholesale costs compared to bulk purchasing, potentially leading to lower profit margins.

You rely on the supplier for timely product shipment and quality control, potentially impacting customer satisfaction.

Some dropshipping suppliers may not offer branding services, making it difficult to establish a strong brand identity.

Best Practices to Sell on Amazon without Inventory

Regardless of the method you choose on how to sell products on Amazon without inventory, here are some best practices to ensure success:

Product Research: Identify profitable products with high demand and low competition.
Reliable Suppliers: Partner with reputable dropshipping suppliers who offer competitive pricing, high-quality products, and reliable shipping.
Optimize Product Listings: Create compelling product descriptions with high-quality images and competitive pricing to attract customers.
Customer Service: Respond promptly to customer inquiries, address issues efficiently, and strive for positive customer reviews.
Track Performance: Monitor key metrics like sales, returns, and customer feedback to identify areas for improvement.

FAQ About How to Sell Products on Amazon Without Inventory

There are frequently asked questions on how to sell products on Amazon without inventory:

How to Start Amazon FBA with No Money

Unfortunately, there’s no way to completely avoid costs when using Amazon FBA. You’ll need funds to cover product acquisition, fulfillment fees by Amazon, and other potential expenses like advertising or packaging materials.

How to Start Selling on Amazon without Inventory

All the methods mentioned above (FBA, FBM, and dropshipping) allow you to sell on Amazon without inventory.

Choose the method that best suits your business model, budget, and level of control desired.

How to Make Money on Amazon without Inventory

When it comes to how to make money on Amazon without inventory, focus on the following steps:

Choose a profitable product to sell.
Source the product from a reliable supplier at a competitive price.
List the product on Amazon with an attractive price point that allows for profit after Amazon fees and supplier costs.
Market and promote your product listings to generate sales.
Be sure of efficient fulfillment through FBA, FBM, or dropshipping to deliver products to customers.

What is the Minimum Inventory to Sell on Amazon?

There’s no technical minimum inventory requirements on how to become an Amazon seller without inventory.

Depending on the fulfillment method you choose, you may need to consider:

FBA: While you don’t need to store inventory yourself, you’ll still need to purchase products upfront and send them to Amazon fulfillment centers.
FBM: You’ll need to store the inventory yourself before fulfilling customer orders.
Dropshipping: No upfront inventory purchase is required, but you’ll pay the supplier for each product ordered.

How to Sell on Amazon without Buying Product

As mentioned earlier, the dropshipping model answers the question of how to sell on Amazon without buying product upfront.

Identify profitable products with high demand and low competition on Amazon. Consider factors like market trends, pricing and potential profit margins.

Research and partner with reputable dropshipping suppliers who offer competitive pricing, high-quality products, and reliable shipping services. Look for suppliers with experience fulfilling orders for Amazon sellers.

Create product listings on your Amazon Seller Central account. This includes writing clear and informative product descriptions, using high-quality images, and setting competitive pricing that factors in your supplier costs and desired profit margin.

When a customer places an order for one of your dropshipping products, you’ll receive a notification through Seller Central. Forward the order details and customer information to your dropshipping supplier. The supplier will locate, pack, and ship the product directly to the customer, often under your brand name.

Maintain excellent customer service by responding promptly to inquiries, addressing issues efficiently, and striving for positive customer reviews.

How to Dropship on Amazon without Money

Dropshipping suppliers typically have higher wholesale costs compared to bulk purchasing, potentially to lower profit margins. Carefully calculate your costs (supplier costs, Amazon fees, marketing expenses) to ensure profitability.

Your business success depends on the reliability and performance of your dropshipping supplier. Choose partners with a proven track record of quality products, timely shipping, and excellent customer service.

Some dropshipping suppliers may not offer branding services. This can make it difficult to establish a strong brand identity to your Amazon business. Explore alternative branding options or consider transitioning to a different fulfillment method like FBA as your business grows.

How to Start a Business on Amazon without Money

How to start a business on Amazon without money is not entirely doable.

As mentioned earlier, dropshipping allows you to start with minimal upfront costs for inventory. However, factor in supplier costs, Amazon fees, and potential marketing expenses.

This involves sourcing discounted products from retail stores or online marketplaces and then reselling them on Amazon for a profit. This approach requires upfront capital to purchase inventory, but the profit margins can be higher compared to dropshipping. However, ensure you comply with Amazon’s policies.

Focus on a niche market with limited competition. Start with a small number of products and reinvest profits back into the business to expand your offerings and marketing efforts over time.