How to Sell on Amazon Without Inventory

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. In order 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.

That is unless you choose a business model that lets you sell products without storing the inventory yourself.

In this article, we'll explore how to sell on Amazon without inventory. Yes, it can be done!

How to Sell on Amazon Without Inventory: 4 Options

The following methods require little-to-no involvement with actual physical inventory. Which one is right for your business?

Use Amazon's FBA Program

The most obvious option for selling on Amazon without storing your own inventory is using the fulfillment by Amazon (FBA) service. FBA lets you outsource the work of storing and shipping products to Amazon fulfillment centers. Of course, using FBA does mean paying Amazon more in fees. When you factor in the costs of storage space and the labor of organizing and shipping inventory, those fees quickly add up.

However, as an added bonus, products sold through FBA receive Amazon Prime status, which can give you a boost in Amazon's rankings and increase your sales.

Using FBA, you will likely still need to handle inventory as the middleman between the manufacturer you source it from and Amazon. You need to make sure your products get to Amazon in the right kind of packaging to meet FBA guidelines. But you can probably manage that without having to pay for additional warehouse storage.

Drop Shipping on Amazon

While FBA takes shipping and storage off your plate, you still need to deal with the logistics of getting inventory to Amazon to begin with. If you’d prefer not to even do that much, 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 kind of 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 need to be careful to follow all of Amazon’s drop shipping rules. These include:

• Making sure you’re the seller of record for all your products.
• Ensuring all packing slips, invoices, and packaging show you as the seller (not the supplier you work with).
• Performing all customer service for the order yourself. If a customer has a complaint or question, it's your responsibility to resolve it.

For new sellers just getting started on Amazon, drop shipping is one of the fastest and most affordable ways to get started. Just be aware that your reputation is dependent on the quality of the products and shipping services of the company you partner with.

Try a Third-Party Logistics Company

A third-party logistics company (3PL) essentially provides the same service that Amazon does with its FBA program. You ship the inventory to their warehouses, and they handle storage and fulfillment.

For some Amazon sellers, using a 3PL provider may not make the most sense. Because of how ubiquitous Amazon’s warehouses are and how efficiently they’re run, Amazon can usually offer better prices than other companies.

But there can be many situations where a 3PL company could serve your needs best, particularly if you sell your products on multiple platforms. It can be smart to look into how their pricing and terms compare so you know your options.

Sell Digital Products on Amazon

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, so they don’t require any storage. Or, they only require computer or cloud storage, which is a lot cheaper than warehouse space.

For some businesses, this won’t mesh with the business model you have in mind. But if you have a good idea for an eBook or software product, it’s worth considering. Artists also have the option to sign up for Merch by Amazon, a 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 or t-shirt and submit the digital file. Amazon takes care of stocking the physical items and adding your designs to them.

Inventory Isn't Required

Running a successful eCommerce business doesn’t have to involve dealing with the physical products themselves. If your skills fall more on the marketing side of things, you can outsource inventory management and just focus on what you’re good at. Consider which of the options for selling on Amazon without inventory make the most sense for your business and start selling!