How to Sell on Amazon Without Inventory?

Amazon FBA

Amazon FBA – or Fulfillment by Amazon – is a service that Amazon offers its sellers. The FBA program requires a fee and includes storing your products and their subsequent distribution by Amazon. After putting your products in storage and selling one of them, Amazon proceeds to send it directly to the buyer. Amazon FBA includes 

• Reception of your products
• Storing them  
• Shipment of the products once they have been sold
• Returns management
• Customer service

FBA may not be a good idea if your items are low-priced or oversized, but it is the most popular program among Amazon sellers. You can check out OABeans’ article on how to start Amazon FBA business. 

FBA Pros & Cons 

Amazon FBA offers many advantages to people who want to sell on Amazon without inventory, including:

• Effortless shipping and logistics: Amazon does most of the work for you. It provides you with its platform (the number one worldwide), receives your products, and then takes care of sending them to the customers. 
• Returns management: ​​Using FBA, Amazon manages returns and refunds for you. 
• Prime shipping: Your products will go through “Prime” shipping. This is a huge advantage as your customer will receive the item within one business day.
• Unlimited storage space: You’ll have access to unlimited storage space (for a fee). 

While FBA offers many advantages, it has some drawbacks, such as 

• High costs: FBA is a handy service, but it costs money.
• Long-term storage fees: Amazon doesn’t like to hold onto inventory. Therefore, you’ll have to pay more for the remaining products in their warehouses.
• Product Preparation Requirements: You must ensure that your products are correctly prepared before shipping them to Amazon.

How to Start Doing Amazon FBA? 

If you have already decided that this program is good for you, start by following these steps:

1. Sign up for an Amazon seller account on Seller Central and set up your FBA account from “Amazon’s seller account portal.”
2. Decide what products you want to sell.
3. Create your listing on Amazon.
4. Ship your product to Amazon warehouses.
5. Launch your product and reinforce it with advertising.

OABeans Leads Lists Help You Sell on Amazon FBA without Inventory

FBA is practical for business owners since it allows them to make profits without getting involved in the headaches of product labeling, shipping, and customer care. You can use OABeans lists to buy items and send them straight to Amazon warehouses. This way, the whole sales process will happen smoothly without you having to stock and manage the products.

Third-Party Logistics (3PL) 

3PL logistics solutions are a kind of outsourced service. Businesses use this service as a manufacturer contractor for their logistics organization and executing processes such as transport and storage of products, stock management, etc. 

Therefore, the 3PL service providers become intermediaries between the marketing company and its clients. It manages the products and sends them to the buyers on behalf of the seller company.

In this sense, 3PL logistics solutions aim to optimize part of the logistics chain of companies, allowing them to concentrate 100% on business functions without having to worry about logistics.

Pros and Cons of Third-Party Logistics

Using 3PL solutions for selling on Amazon without inventory has a lot of benefits for sellers looking to expand their Amazon business. Among the main advantages are the following:

• Ability to delegate all logistics functions to the end customer
• Ease of selling internationally without costs associated with a traditional expansion
• Flexibility in service contracts and with a pay-only-for-use model
• Much greater visibility of the products in the Amazon marketplace
• Management of returns and refunds.

However, Third-Party Logistics has a few disadvantages, including 

• You might lose some control over your inventory.
• You need to find a reliable company you can trust.
• You may need significant investment to set up your Third-Party Logistics.

Amazon FBM

FBM – or Fulfillment by Merchant – is an Amazon sales model where sellers are responsible for preparing their orders, returns management, and customer service. If you want to sell on Amazon without inventory, you can use this model in combination with 3PL services. You need to find a reliable 3PL company providing storage and shipment services to use Amazon FBM without needing any inventory.

Pros & Cons of FBM 

To better understand the Amazon FBM sales model, we will discuss its main advantages below:

• Controlling the business: FBM sellers take care of the preparation and distribution of the product. With this sales model, you can control and manage your numbers.
• Build your brand: you can interact directly with consumers. This will make you more familiar with their needs.
• More profits: FBM sellers do not have to pay Amazon fees and other expenses to prepare their packages.

On the other hand, FBM has some challenges, like

• You must Respond to all customer messages within 24 hours
• You have to meet delivery times
• You’ll need to comply with shipping standards
• As an FBM seller, you must take care of the product’s return, collection, and shipment

How to Get Started with Amazon FBM? 

Getting started with Amazon FBM is relatively easy. Remember that you must find a reliable 3PL company alongside the FBM model if you want to start an Amazon business without inventory. Follow the steps below to start your Amazon FBM business: 

1. Create an Amazon seller account on Seller Central.
2. List your products and create product pages using related keywords and exciting titles
3. Contact a 3PL company to manage your storage space.
4. Handle customer service and manage returns

What Are the Key Differences Between Amazon FBA & FBM?

The FBA program is excellent for people who want to sell on Amazon without inventory and offers advantages for SEO strategies that help them win the Buy Box. It also makes items eligible for Prime benefits. The FBA program offers tremendous advantages but includes a series of fees. 

On the other hand, the FBM program gives retailers greater control and predictability over inventory and order fulfillment. In this way, sellers with logistics experience can improve the overall margins of their business. They also have more control over the shopper experience and customer service.

Amazon Dropshipping 

Dropshipping is an e-commerce method in which the seller takes orders on behalf of a manufacturer, distributor, or supplier. Then, when a customer buys the product, the seller calls on his supplier to make the sale. Often, drop shippers identify the products on sale as their own, and the end consumer is never informed that the goods come directly from the manufacturer. Here are the basics of dropshipping on Amazon:

1. First, an Amazon customer buys the product you listed on the site.
2. Then, once the transaction is finalized and the money received, you buy the product directly from your supplier and provide them with the customer information.
3. Finally, with the buyer’s information, the supplier sends the product directly to the customer.

Know More: Amazon FBA or Dropshipping

Pros and Cons of Dropshipping

Let’s start with the positives. What are the advantages of setting up a dropshipping business on Amazon? We’ll find out below: 

• Dropshipping is easy to set up: It’s pretty simple and fast to start. All you have to do is create an account on Amazon and make product listings. 
• You can start your business without taking risks: You can sell anywhere worldwide, depending on the selected suppliers. Since you don’t need significant investment to start dropshipping on Amazon, no great risks threaten your business.
• No inventory management is needed: In dropshipping, you don’t need to buy and manage the stock; your supplier takes care of everything. 

As advantageous as dropshipping may seem, there are a few disadvantages to consider:

• Intense competition: With dropshipping, the barriers to entry are low. Competition can therefore be intense. Also, while there is some opportunity to differentiate the products you sell, nothing prevents other Amazon drop shippers from selling identical products. 
• Slow delivery times: Drop shipped Goods on Amazon are shipped from suppliers and manufacturers. Very often, these suppliers are located abroad. This is why shipping times can take up to a few weeks to reach the end customer.
• Lack of quality control: As the items are shipped directly from the manufacturer to the buyer, you have no way of controlling the quality of the product. 

The Last Way: Selling Digital Products on Amazon

From eBooks to songs to t-shirt designs, there are plenty of options for aspiring entrepreneurs to sell on Amazon without inventory. You can sell the following digital products on the Amazon marketplace: 

• eBooks: You can sell e-books through Amazon’s Kindle Direct Publishing (KDP), which offers two ways to do so: digital and “print on demand.”
• Music – For musicians, Amazon offers TuneCore, which is part of AmazonMusic. Through TuneCore, musicians can upload their songs and make them available to Amazon, iTunes, Spotify, Google Play, and more than 150 other stores worldwide.
• Art – If you’re an artist or graphic designer with killer artwork, you can upload your images to Amazon Merch and see your work on a printed t-shirt. 

Pros & Cons of Selling Digital Products on Amazon

In addition to starting an Amazon business without inventory, selling digital products has many advantages, such as: 

• Your products will reach more potential customers. 
• You can take advantage of customers’ existing trust in the marketplace. 
• You’ll have an unlimited source of income. 

There are also some disadvantages to selling digital products on Amazon, including 

• Since this is an excellent source of income, there is a lot of competition, and you’ll need to offer a competitive advantage to be successful. 
• Your ideas may be unique, but others can copy and sell them at a lower price. 

Final Thoughts 

As an Amazon seller who doesn’t have ample storage space or a warehouse to store their items, you must know all the ways to sell on Amazon without inventory. From using the FBA program to selling digital products on the marketplace, Amazon offers a wide range of opportunities for sellers, which we discussed in this article.