How To Sell On Amazon Without Inventory - PIRS Capital, LLC

Positives of Selling on Amazon Without Inventory

If you want to try something new and grow in the e-commerce space, this method of selling on Amazon can reap big rewards. While no plan is foolproof, here are just some of the positive aspects of selling on Amazon without any in-house inventory:

• Cheaper warehouse space: You don’t have to pay for your own warehouse space as you’ll have a third party store it for you, whether that be with Amazon FBA or through dropshipping. While this comes at a cost, this option is often more affordable than finding your own warehouse to store your products.
• Tweak your expertise: Selling without inventory gives you a chance to micro focus on the marketing and branding side of your business. Why not take this opportunity to grow as an entrepreneur?
• New horizons: There’s always a gap in the market, and always a product waiting to be sold. This new way of selling on Amazon allows you to reach new customers by targeting untapped markets while searching for new products to sell.
• No big upfront investment: A major positive is that you don’t need major funds to start this e-commerce business. You’ll have to pay sign up fees and monthly fees to Amazon, but unlike a lot of other business endeavors, it doesn’t require a big monetary investment right up front. This is especially true with dropshipping.
• More free time: Another benefit of this type of work is that it often allows for a more flexible work schedule, so you can design your days how you like.

Dropshipping and Amazon FBA: All Sellers Need To Know

No products? No problem! As an e-commerce entrepreneur, you can sign up to use Amazon FBA or dropshipping and you’ll be on your way to new adventures in business. Wondering what selling option is the best for you? Let’s break down the basics of dropshipping as well as using Amazon FBA to sell products without inventory.

What Is Dropshipping and How Does It Work?

Dropshipping has been a trend in e-commerce for a number of years now. Many sellers love the freedom it allows to handle products per item sold, rather than having to manage a large inventory somewhere. With dropshipping, the inventory is only released when you make a sale, so there’s no stock just waiting in limbo.

What Are the Pros and Cons of Dropshipping?

One benefit of selling with dropshipping is that it comes with lower management costs because you won’t be handling the shipping or storage. However, selling products on Amazon using dropshipping does come with some drawbacks.

For starters, it is the seller’s responsibility to manage all returns, unlike with Amazon FBA. This means accepting as well as processing returns requested from customers. According to Amazon’s seller guidance for 2022, it is possible to have your supplier act as a third party and deal with all customer returns.

And because most of the physical aspects of the transaction works through third parties like the manufacturer, which means that you won’t have much interaction with your customers. This can present a problem when it comes to inspecting product quality, inventory management and the fulfillment timeline.

Marketing Your Business When Selling Without Inventory

On that note, many entrepreneurs do find it beneficial to connect with their customers, because it gives them some insight on what is and isn’t working about their business. They can find out things like customer demand, any improvements that need to be made and other specifics that are essential for business owners. If you’re an e-commerce entrepreneur and you are selling products without inventory, then use your online marketing campaigns to connect with your customer base.

Amazon currently allows professional merchants to sell in the Marketplace and manage their inventory using dropshipping under certain terms. It’s important to read all of Amazon’s dropshipping policy terms before signing up so you don’t miss any steps and risk getting suspended from the platform or face any potential fines for breaking any of them. You can read Amazon’s updated dropshipping policy here.