How to Sell on Amazon Without Inventory?

Selling on Amazon opens doors to big opportunities, but it all starts with understanding the basics. Creating an Amazon seller account, listing your products, and managing orders are essential steps. You can dropship on amazon with minimum investment. However, there’s an exciting twist: you can sell on Amazon without needing to Inventory.

How to Sell on Amazon Without Inventory

This guide will show you how, whether it’s through dropshipping or Fulfillment by Amazon (FBA). It’s a treasure trove of insights for those starting on Amazon, covering everything from picking products to working with suppliers and effective marketing. Think of it as your map to succeed in Amazon sales without the hassle of inventory.

Why should you care? Well, Amazon has a whopping 200 million active customers around the globe, giving you an immense potential audience. And here’s the kicker: you can tap into this massive market without worrying about storing or handling goods. It’s called dropshipping, a booming industry set to hit $476.0 billion by 2026. Plus, FBA sellers, who let Amazon manage inventory and shipping, make up more than half of Amazon’s sales.

Intrigued? This guide has your back, guiding you through selling on Amazon without inventory, equipping you with the knowledge and tools to dive into this vast market and potentially boost your earnings big time.

Amazon’s Fulfillment Options

Before start selling on amazon, you should know what amazon offers to sellers to facilitate them. Let finds out!

Amazon offers three fulfillment options for third-party sellers: Each fulfillment option has its own advantages and disadvantages.

The best fulfillment option for you will depend on your business needs and goals. If you are looking for a convenient and hassle-free fulfillment solution, then FBA is a good option. If you want more control over the fulfillment process, then SFP or MFN may be a better option.

Fulfillment OptionAdvantagesDisadvantages
FBAConvenient and hassle-free, Amazon handles all aspects of fulfillment, Prime shipping available, global fulfillment networkFees associated with storage and fulfillment, less control over the fulfillment process
SFPPrime shipping available, more control over the fulfillment processMust meet certain performance requirements, responsible for all costs associated with fulfillment
MFNComplete control over the fulfillment process, no fees to Amazon for fulfillmentResponsible for all costs associated with fulfillment, including storage, shipping, and customer service, cannot offer Prime shipping on products

Fulfillment by Amazon (FBA)

infographic image showing working of Fulfillment by Amazon (FBA)

FBA is a service where Amazon stores and ships your products for you. When a customer places an order, Amazon will pick, pack, and ship the product to the customer. You will also have access to Amazon’s customer service and returns processing.

Advantages:

  • Amazon handles all aspects of fulfillment, including storage, picking, packing, shipping, and customer service.
  • You can offer Prime shipping on your products.
  • You have access to Amazon’s global fulfillment network.

Disadvantages:

  • There are fees associated with FBA, such as storage fees and fulfillment fees.
  • You have less control over the fulfillment process.

Seller Fulfilled Prime (SFP)

infographic image showing working of Merchant Fulfilled Network (MFN)

SFP is a program that allows sellers to offer Prime shipping on their own products. To be eligible for SFP, sellers must meet certain performance requirements, such as a high order fulfillment rate and a low return rate.

Advantages:

  • You can offer Prime shipping on your products.
  • You have more control over the fulfillment process.

Disadvantages:

  • You must meet certain performance requirements to be eligible for SFP.
  • You are responsible for all costs associated with fulfillment, including shipping and customer service.

Merchant Fulfilled Network (MFN)

infographic image showing Merchant Fulfilled Network (MFN)

 MFN is the default fulfillment option for third-party sellers. When you sell through MFN, you are responsible for storing and shipping your own products.

Advantages:

  • You have complete control over the fulfillment process.
  • You do not have to pay any fees to Amazon for fulfillment.

Disadvantages:

  • You are responsible for all costs associated with fulfillment, including storage, shipping, and customer service.
  • You cannot offer Prime shipping on your products.

First Step to Start: Choosing Amazon’s Fulfillment Options

To choose the right Amazon fulfillment option for your business, you need to consider the following factors:

  • Storage Costs: It’s essential to factor in the cost of storing your products in Amazon’s fulfillment centers. FBA charges storage fees based on the amount of space your inventory occupies. If you have products that move slowly or have long-term storage needs, this cost can significantly impact your profitability. It’s worth considering how storage costs may affect your choice of fulfillment method.
  • Product size and weight: FBA has restrictions on the size and weight of products that can be stored and shipped. If you sell large or heavy products, then MFN may be a better option.
  • Order volume: If you have a high order volume, then FBA may be a better option, as Amazon can handle large order volumes more efficiently than you can on your own.
  • Profit margin: Consider the impact of fulfillment fees on your profit margin. If you have a low profit margin, then MFN may be a better option, as you can save money on fulfillment fees.
  • Customer expectations: If you want to offer Prime shipping on your products, then FBA is the only option. Prime customers expect fast and reliable shipping, so if you cannot offer it, you may lose sales.
  • Control: If you want more control over the fulfillment process, then SFP or MFN may be a better option. With FBA, Amazon handles all aspects of fulfillment, so you have less control over the process.

Selling on Amazon With Out Inventory – Discussing Two Methods

There are two main ways to sell on Amazon without inventory:

  1. Dropshipping (Selling on Amazon Without Money)
  2. Amazon Fulfillment by Amazon (FBA)

Dropshipping

inforgraphic image showing Dropshipping

Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product using the dropshipping model, it purchases the item from a third party—usually a wholesaler or manufacturer—and has it shipped directly to the customer. As a result, the seller doesn’t have to handle the product directly.

To sell on Amazon using dropshipping, you will need to:

  • Create an Amazon seller account.
  • Find a reliable dropshipping supplier.
  • List your products on Amazon.
  • Process orders and forward them to your supplier.
  • Provide customer service.

How it works?

The dropshipping process is relatively simple:

  1. A customer places an order on the seller’s website.
  2. The seller forwards the order to their supplier.
  3. The supplier ships the product directly to the customer.
  4. The customer receives the product and the seller makes a profit.

Benefits of Dropshipping

There are several benefits to dropshipping, including:

  • Low startup costs: You don’t need to invest in inventory upfront, which can save you a lot of money when you’re just starting out.
  • Easy to start: Dropshipping is a relatively easy business to start, as you don’t need to worry about managing inventory or shipping.
  • Scalable: Dropshipping is a scalable business model, meaning you can easily add new products to your store and expand your reach without having to invest in more inventory.
  • Flexible: Dropshipping is a flexible business model, as you can work from anywhere in the world with an internet connection.

Drawbacks of Dropshipping

There are also some drawbacks to dropshipping, including:

  • Low profit margins: Dropshipping businesses typically have lower profit margins than traditional retail businesses, as you have to pay your supplier for the product and then sell it for a higher price.
  • Less control over the process: You have less control over the dropshipping process, as you are relying on your supplier to ship the product to your customer on time and in good condition.
  • More competition: Dropshipping is a popular business model, so there is a lot of competition.\

Amazon Fulfillment by Amazon (FBA)

Amazon FBA is a program that allows Amazon sellers to store their inventory in Amazon’s fulfillment centers. When a customer places an order, Amazon picks, packs, and ships the order to the customer. Amazon also handles customer service for FBA orders.

To sell on Amazon using FBA, you will need to:

  1. Create an Amazon seller account.
  2. Enroll in the FBA program.
  3. Ship your inventory to Amazon’s fulfillment centers.
  4. List your products on Amazon.
  5. Monitor your inventory and sales.

How Amazon FBA works?

  1. You create an Amazon seller account and enroll in the FBA program.
  2. You ship your inventory to Amazon’s fulfillment centers. Amazon will provide you with the shipping addresses for its fulfillment centers.
  3. Once your inventory arrives at Amazon’s fulfillment centers, it will be stored there until a customer places an order.
  4. When a customer places an order, Amazon will pick, pack, and ship the order to the customer.
  5. Amazon will also handle customer service for the order. This includes answering customer questions, resolving any issues, and processing returns.

Benefits of Amazon FBA

There are many benefits to using Amazon FBA, including:

  • Convenience: Amazon takes care of all the picking, packing, shipping, and customer service for you. This can free up your time so you can focus on other aspects of your business, such as marketing and product development.
  • Reach: Amazon has a huge customer base, and FBA sellers can take advantage of this by having their products listed on Amazon.com.
  • Credibility: Selling your products through Amazon FBA gives your business a sense of credibility. Amazon customers trust Amazon, so they are more likely to buy from FBA sellers.
  • Prime eligibility: FBA sellers automatically qualify for Amazon Prime, which gives their products a higher chance of being seen and purchased by Prime members.

Costs of Amazon FBA

There are two main types of fees associated with Amazon FBA:

  • Fulfillment fees: These fees are charged per unit sold and include picking and packing your orders, shipping and handling, customer service, and product returns.
  • Inventory storage fees: These fees are charged monthly and are based on the volume of inventory being held in an Amazon fulfillment center.

Conclusion

Selling on Amazon without the need to store products is a great opportunity in the online business world. This article has explored two main ways to do it: Dropshipping, a fast-growing industry predicted to reach a massive $476.0 billion by 2026, and Amazon Fulfillment by Amazon (FBA), which accounts for more than half of Amazon’s sales.

Amazon has over 200 million active customers worldwide, which means huge potential. And on average, an Amazon seller makes over $25,000 a year.

Whether you prefer the flexibility of dropshipping or the convenience of FBA, this guide equips you with the knowledge to succeed on Amazon. With the right strategies, smart product choices, and a commitment to excellent service, you can tap into this massive opportunity. The future of online business is here, and it’s ready for you to explore.

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