Whenever someone thinks of selling on Amazon, they immediately imagine a complex business operation with a large inventory, and renting out warehouses to store that inventory.
However, inventories are not synonymous with Amazon selling, and there are many ways in which sellers can establish a presence on Amazon without holding any inventory at all.
Don’t believe us? Read on, and you’ll find the answer to this question how to sell on Amazon without inventory.
Can You Sell on Amazon Without Stock?
Well, Yes, and No.
Sellers indeed need to hold an inventory to sell on Amazon utilizing the Private Label program, which is probably the most popular Amazon selling method.
Starting a typical private label firm has several hurdles and expenditures, making it a significant time, money, and effort commitment.
But Private Label is not the only way to sell on Amazon, and hence, it is possible to sell on Amazon without holding any inventory.
Related: How To Sell on Amazon in 2024?
What is the Minimum Stock to Sell on Amazon?
There is good news here: Amazon does not have any minimum stock requirements currently in place to sell on its platform. However, it is generally advisable to keep around 10 units in stock for fulfillment under your Amazon account name. This will provide you with a sufficient inventory to work with while ensuring you can manage orders.
How To Sell on Amazon Without Inventory for Beginners
There are four different ways of selling on Amazon with zero inventory. These are dropshipping, Print-on-demand, Kindle Digital Publishing (KDP) and Digital Products. Let us take a detailed look into these methods to see how they work, and what are their unique advantages and disadvantages.
Related: How To Sell On Amazon From Alibaba?
Amazon Dropshipping is a dynamic e-commerce business model in which sellers do not get to keep any physical inventory.
So how exactly does it work? Dropshipping involves a seller collaborating with a manufacturer to develop and distribute a specific product straight to buyers on the seller’s behalf.
In a dropshipping operation, sellers choose items to market on Amazon, find trusted suppliers, and promote them on the site. When a buyer puts an order, the seller purchases the item from the supplier at a lower rate, and the supplier handles the delivery straight to the client. This technique reduces the need for sellers to invest in goods upfront, lowering financial risk and initial capital requirements.
Remember those ‘middlemen’ in most forms of business, who take a big chunk of the profits from the supplier, and are widely hated for that? Well, as a drop shipper, you’ll become that middle-man; getting rewarded for marketing the product and finding an audience for it.
This method has become wildly popular over the last few years, because of its minimal initial investment requirements and potential for passive revenue.
Dropshipping reduces the need for large upfront inventory purchases, which makes it an affordable entry point for companies with little money. Dropshipping enables sellers to reach a worldwide consumer base without the hassles of handling global logistics.
Dropshipping enables merchants to easily add or remove goods from their offerings, allowing for more flexibility and scalability in response to market trends.
However, there are also some caveats to this selling method. Sellers have limited control over the quality of the products as they are reliant on suppliers for manufacturing and fulfillment. Lack of control over the supply chain can lead to issues like stockouts or shipping delays, affecting customer satisfaction.
Owing to the huge popularity of the dropshipping model, there is also fierce competition among the sellers, which results in reduced profit margins.
Another inherent problem with dropshipping is retaining control over the quality of the items being sold. Because you rely on suppliers to fulfill orders, developing a good partnership with reputable suppliers is of paramount importance.
Dropshippers should implement stringent quality control methods and always remain responsive to consumer input, whether positive or negative, as it fosters trust between you and the buyer, who can become a recurring customer if they like the buying experience provided by you.
By actively collaborating with suppliers, you can guarantee that the products fulfill the anticipated standards, increasing customer satisfaction and reducing possible quality concerns.
Print on Demand
Print on Demand (PoD), which is also known as Merch (merchandise) by Amazon, is a popular Amazon service that allows retailers to manufacture and sell custom-designed goods without requiring inventory.
What happens is that some creative person comes up with a, well-creative idea, in the form of a slogan, a design, a catchphrase, or any combination of it all. This idea might appeal to a certain group of people, and when you find those people, you ask Amazon to print those ideas on products such as t-shirts, sweatshirts, and more.
The trick here is to only have Amazon print as many units as you can sell immediately. In that way, Amazon produces the merchandise you ask for, which sells out immediately, without the need to keep an inventory. When you find more orders for your products, you repeat that process, simply.
Graphic designers and digital producers can simply apply for the Merch by Amazon program, which allows them to exhibit their distinctive designs on a range of clothing, shoes, or other products. When a buyer puts an order, Amazon handles the printing, packing, and shipping, which allows ‘sellers’ to earn royalties without having to manage inventory.
Merch by Amazon is a method that enables merchants to launch their businesses without incurring substantial upfront fees. There is no need to invest in inventory, making it a viable choice for people with low amounts of funds.
Merch by Amazon products are offered with the Prime badge, which already gives a competitive advantage to the sellers since buyers frequently select Prime-eligible products for swift and more reliable delivery.
While profit margins per sale may vary, there is potential for passive income, particularly with designs that are popular with clients.
This program is not without its caveats, a major one being Amazon’s gatekeeping measures, which will require sellers to request an invitation. While this measure is meant to ensure quality control, it can definitely limit entry for some sellers.
Merch by Amazon also has a smaller product range than traditional e-commerce, limiting sellers when it comes to customization options. There is also no possibility for cross-platform selling, meaning that sellers are limited to the Amazon marketplace.
Print on Demand allows sellers to experiment with a variety of design options, including text-based slogans and elaborate visuals. Sellers can utilize Amazon’s mock-up generator to see how their designs will look on various products. This tool helps to create visually appealing listings that might attract potential shoppers.
When it comes to royalties, merchants receive a portion of the sale price for each item sold. While actual royalty rates vary according to product kind and listing price, sellers may maximize their revenues by carefully pricing their items. Amazon’s open methodology guarantees that sellers have a clear understanding of their royalty profits for each transaction.
Ultimately, Merch by Amazon offers merchants an easy and low-risk entry point for monetizing their creative ideas. The opportunity to create, sell, and earn royalties without the difficulties of inventory management makes it an intriguing alternative for individuals wishing to develop an Amazon presence without making a large initial commitment.
Kindle Digital Publishing (KDP)
Kindle Digital Publishing (KDP) is a game changer for writers and publishers, enabling them to quickly self-publish and distribute their works on Amazon. This service empowers content creators by providing both digital and print media, appealing to a large global audience.
KDP allows prospective authors to smoothly bring their literary masterpieces to life without the necessity for a professional publishing firm. This democratization of the publishing industry enables writers to reach a large worldwide audience directly through the Amazon Kindle Store.
One of the most notable advantages of KDP is the lack of upfront payments. Authors may publish their work without paying any upfront fees, making it an appealing choice for individuals on a tight budget.
Many budding authors are initially overwhelmed by the prospect of going through the chores of publishing a book, but they shouldn’t be. Publishing through KDP has been made simple by Amazon thanks to all the assistance the KDP interface provides.
After readying their manuscript (don’t worry about the format, as Amazon supports virtually all of them), authors can easily sign up to KDP, and design an attractive cover with the assistance KDP provides through templates and suggestions. Next up, they need to provide important details such as the author name, book title, description, and important keywords.
After that, decide on which pricing strategy and royalties options you’d want for publishing your book. KDP provides several royalty models, allowing writers to optimize their revenue. When you’re all done, hit the ‘Publish Your Kindle eBook’ button, and Amazon will publish your book within 24-48 hours.
KDP, which leverages Amazon’s massive customer base, allows authors to reach readers all over the world. The global distribution network guarantees that books reach a varied readership. Authors also get to maintain ownership of their work, including the freedom to set book prices and modify material at any time. This flexibility allows authors to respond to market developments and consumer input.
What’s more? KDP also provides useful data regarding book performance, which can enable writers to tweak their publishing approach to reach a bigger audience. Authors can use these statistics on sales, reader interaction, and other metrics to make educated decisions.
It isn’t all fun and games, however. Newer authors have to contend with the highly competitive KDP marketplace, thanks to the ease of entry. There are thousands of books in each genre that you have to go up against. So, make sure that you make your work distinguishable from others to stand a chance for literary success on Amazon KDP.
Another inventory-less option to sell on Amazon is digital products. This category includes a wide variety of items, including ebooks and audiobooks, music, digital art, and more.
Unlike traditional physical commodities, digital products have a distinct advantage: they do not require physical inventory, delivery, or storage.
While Kindle books are a popular category of digital products, Amazon provides a wider range of options. One notable example is Amazon Music, which allows musicians to sell and distribute their music directly through the site. This not only gives musicians direct access to their audience, but it also demonstrates Amazon’s adaptability as a digital marketplace.
Aside from conventional music, digital artists may use platforms like Amazon to sell their creations, such as graphic designs, drawings, and digital paintings. The idea is to assess demand and create goods that resonate with the intended demographic.
Digital items have many benefits for sellers looking for a low-risk, high-margin business strategy. One of the key advantages is the ease of rapid access for clients. With no physical shipment, sellers can provide rapid downloads, improving the entire consumer experience.
Furthermore, digital items are very scalable, allowing merchants to copy and distribute them without incurring additional production costs. This scalability is especially useful when using Amazon’s enormous consumer base.
Another advantage is the increased profit margins. Without the costs of manufacture, storage, and shipping, sellers can keep a larger chunk of each transaction as profit. Creators, such as digital artists or authors, get more control over their intellectual property, which opens up opportunities for recurring money through licensing agreements and royalties.
There are of course problems, as well (you never thought there weren’t, didn’t you?). A major issue is the possibility of digital piracy, in which illegal copies of products (often known as ‘bootlegged’) circulate without the seller’s knowledge. Protecting digital content from piracy requires solid communication with Amazon regarding the enforcement of rules regarding piracy, strong security measures, and constant monitoring by the sellers.
The digital market is also not immune from competition. Sellers should prepare for a highly competitive marketplace in which clever marketing and unique features are required to stand out in a crowded field.
The universe of digital products on Amazon goes much beyond e-books. Whether you’re a musician, digital artist, or producer of original digital material, the platform allows you to access a worldwide audience, make passive revenue, and broaden your online presence.
Can I Start Amazon FBA with No Money?
Well, not exactly. Amazon FBA requires sellers to fulfill their products through Amazon, which requires a substantial investment, usually hovering around $2500 and $5000 for new sellers.
And since fulfillment through FBA is not something Amazon does out of its affection for sellers, it requires sellers to pay a lot of fees for this service.
All of that is worth it for sellers who can commit an initial investment though, as Amazon takes care of all fulfillment including storing inventory, packaging, and shipping on behalf of sellers.
There are many options for those looking to enter the world of Amazon selling without having to bother with keeping an inventory. Interested parties are advised to conduct extensive research on their preferred approach, and should take advantage of all available tools and resources.
If you feel lost and overwhelmed, try to explore the success stories of people who have done this before. Get advice from seasoned sellers, and keep up with the newest e-commerce trends. Begin with dipping your toes, learning from your experiences, and progressively increase your efforts to get the desired results.
What is dropshipping and how does it work on Amazon?
Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when you sell a product, you purchase the item from a third party and have it shipped directly to the customer.
Is dropshipping allowed on Amazon?
Yes, dropshipping is allowed on Amazon as long as you follow the platform’s guidelines and policies. Be transparent about your business model and ensure timely and reliable shipping to maintain a positive customer experience.
How do I find dropshipping suppliers for Amazon?
Research and choose reliable suppliers with a good track record. Utilize online directories, and wholesale marketplaces, or connect with manufacturers directly. Ensure they have quality products, reasonable prices, and efficient shipping processes.
What products are suitable for dropshipping on Amazon?
Look for niche products with a high demand and low competition. Consider products that are lightweight, durable, and have a consistent quality. Electronics, accessories, and trendy items often work well.
How do I set competitive prices for dropshipped products?
Factor in product cost, shipping fees, Amazon fees, and your desired profit margin when setting prices. Monitor competitors regularly and adjust your prices accordingly.
How do I handle returns and customer service?
Clearly communicate your return policy and work with suppliers who offer flexible return options. Be responsive to customer inquiries and address any issues promptly to maintain a positive seller rating.
Do I need to register a business to dropship on Amazon?
While it’s possible to start without a registered business, it’s recommended to establish a legal entity for long-term sustainability. Check the legal requirements in your region and consult with a professional if needed.
How can I optimize product listings for better visibility?
Invest time in creating compelling product listings with high-quality images, detailed descriptions, and relevant keywords. Monitor and adjust your listings based on customer feedback and market trends.
What are the challenges of dropshipping on Amazon?
Challenges may include managing inventory levels, dealing with potential supplier issues, and staying compliant with Amazon’s policies. Regularly assess and adapt your strategies to overcome challenges.
How can I scale my dropshipping business on Amazon?
Continuously analyze your performance, expand your product range, and explore new markets. Build a brand presence, leverage advertising, and stay updated on e-commerce trends to keep your business growing.