Worried about storage, inventory and production? Not a problem! There is now a whole range of different ways to sell on Amazon without inventory depending upon your needs and wants.
In fact, Amazon has made it easier than ever before. The global eCommerce supergiant ensures a bunch of “opt-in” services. Effectively you can receive bespoke marketplace services to use to your advantage.
So whether you’re dropshipping, whitelabelling, or going for retail arbitrage, there’s the right option for you.
Before you Sell on Amazon
We’ll talk about the different ways to move products via Amazon in a moment, but first of all you need an Amazon Seller account.
Once you’ve signed up, you’ll see that there are two options:
- Individual Plan
- This plan has no monthly price, but instead you pay $0.99 on every item.
- Professional Plan
- You pay $39.99 every month for the right to sell on Amazon.
- Individual Plan
No matter which one you choose, you will also encounter Amazon Seller problems such as fees. They range from “renting” Amazon’s online platform and referral fees on every sale, but more about that later!
Can You Sell on Amazon Without Inventory?
It may seem incredible, but yes you can!
You can manage this in a variety of ways, but the most well known ways involve using Amazon FBA, or Fulfillment By Amazon. This program was designed by the minds behind the greatest supply chain the eCommerce world has ever known and it can enormously aid Sellers.
The Difference Between FBA and FBM
To cover every difference would need its own article on FBA vs FBM, but we’ll give you the keynotes here.
Under FBM you cannot sell on Amazon without inventory. This is because you are responsible for:
- Package and preparation of each order
- Arrangement of individual shipping
- Maintenance of healthy inventory
- Customer support
In other words you’ll need to maintain an inventory at all times if you’re looking to fulfil orders and run a successful eCommerce business. However, with FBA you are responsible for:
- Shipping your products to an Amazon Storage Facility
Everything else is taken care of. Packaging, order fulfilment, customer support, final-destination delivery – EVERYTHING. Obviously you’ll need to pay Amazon FBA fees to compensate for their services, but it does offer incredible advantages.
“But even with FBA I still need to produce inventory?”
You couldn’t be more wrong!
Different Ways to Sell on Amazon Without Inventory
When it comes to being an Amazon Seller, you can sell on Amazon without inventory via 4 primary methods. Two of which are only possible via the FBA program, one that can be achieved via the FBM program and one that is up to you depending upon whether selling on Amazon is a full-time job, or simply supplemental income.
This is best done via FBA, but can similarly be done with FBM depending upon your rate of product appropriation.
Retail arbitrage involves searching out liquidation and clearance sales (or simply a heavily discounted sale) to purchase products and resell them on Amazon for a profit.
This method can be time-consuming and, if you’re not careful about it, rather unfruitful. However if you plan your approach, your products and your retailers it can scale up the more you learn about it. With tools such as Product Finder you can pinpoint items that have an incredible ROI and you don’t have to buy in bulk – unless of course it seems like a good opportunity!
If you buy wholesale from a manufacturer you have the opportunity to receive large amounts of inventory at a heavily discounted price.
Thankfully, the Amazon FBA program lets you ship these wholesale orders directly to an FBA fulfillment center. You don’t even need to see the products in real life to sell on Amazon in this way. You simply pinpoint the items that have low-competition but high-demand, and earn your money off the profits that come from selling those wholesale orders.
It’s important to properly qualify Amazon FBA fees in this method because if your products don’t fly off the shelves of the Amazon warehouse, they could cost you quite a bit. It is also recommended to invest in Amazon inventory management tools such as Seller Central Connect that monitors your products, can auto-reprice according to your specifications and synchronise cross-channel inventory.
Other Online Marketplaces
This method combines retail arbitrage with wholesale reselling. Essentially you browse other online marketplaces with exceptionally cheap rates and purchase wholesale from there.
Online marketplaces such as AliExpress, ThomasNet, IndiaMart and eWorldTrade are popular locations for Amazon Sellers looking to employ this method. However, using this method is not recommended due to the prolific amount of knock-offs, counterfeits and shoddily manufactured products available.
Dropshipping allows you to sell on Amazon despite not owning or producing the products AND has extraordinarily low overhead cost.
Essentially you fulfil customer orders by purchasing the products from another supplier and organising shipment directly to the customer. You have no manufacturing costs, no inventory storage costs, no facilities and you can launch this business across multiple channels.
The downside is that you have little-to-no control over timelines and delivery. The orders that you fulfil are completely dependent on the manufacturer and their schedule. Due to the competitive nature of dropshipping, you may also find yourself as one among many.
How to Sell on Amazon and Make a Profit
If only it was that easy. There is no magical secret when you sell on Amazon, just good advice and a lot of hard work.
But what you can have is an advantage over other Amazon Sellers.
The eCommerce industry is rife with fierce competition, so you need an edge over your compset. Our advice:
Invest in automation and profitability tools.
It isn’t enough to go with your gut. To sell on Amazon requires a canny mind and prodigious planning. If you’re not using a product profitability tool to discover the selling rates, Amazon buy box price, and the Amazon fees included within the product – then how can you expect to turn a profit?
The next step is to invest in automation. There are Amazon Seller tools available that can instantly complete product listings, automatically reprice, offer advanced order management on a single comprehensive platform and much more.
If your business is to sell on Amazon, then our tools are the best advantage that you can offer yourself. Talk to one an eCommerce specialist today and learn more about our variety of services. Brush up on your knowledge with our eCommerce guides to make sure that you are fully prepared to maximise your business and scale up!