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4 Ways to Sell on Amazon Without Holding Inventory

Selling without inventory is a business model that eliminates the need for storing any products or managing logistics. This approach provides sellers with greater flexibility, allowing them to focus on marketing and developing efficient sales strategies. This model is particularly beneficial for beginners, and can be achieved through various methods, each with its own unique characteristics.

In this article, we'll explore four methods for how to sell on Amazon without inventory.

How to Sell on Amazon without Inventory

With methods like dropshipping, Amazon FBA, print-on-demand merchandise, and offering digital products, you can sell items without needing to store or manage them physically. In order to become an Amazon seller of any kind, you start by creating a seller account and listing your products, which can include intangible items like intellectual property, or products that are stored and handled by others. These business models offer varying levels of scalability and potential profitability, which we’ll explore in the sections below.

Method 1: Fulfillment by Amazon (FBA)

One of the most effective ways to generate income on Amazon is through Amazon FBA (Fulfillment by Amazon). With the FBA program, you can buy and sell products without the hassle of handling storage, order fulfillment, or logistics, as Amazon manages all of these tasks on your behalf.
Here’s how the process works:

  1. Find a product you want to sell.
  2. Locate a supplier and place an order.
  3. Your supplier ships the products to Amazon FBA centers.
  4. When an order is placed by a customer, Amazon prepares and ships it to them directly.
  5. You earn profits without handling any products physically.

In addition to eliminating the hassles of logistics and inventory management, Amazon FBA also offers numerous benefits, including:
  • Increased visibility: FBA products often generate higher sales due to the platform's algorithms.
  • Higher margins: Sellers can focus on trending products with high profit margins. On average, Amazon FBA sellers earn between $3,000-$5,000/month.
  • Scalability: With Amazon handling your logistics and customer support, you can devote more time and energy to scaling your business.
While Amazon FBA presents promising opportunities for substantial profits without the need for inventory management, consider the following factors:
  • Fees: Amazon charges fees for storage, order fulfillment, and other services.
  • Initial investment: You need to ensure that you have an adequate budget to purchase products or negotiate consignment deals with suppliers.
  • Shipping costs: You are responsible for shipping products to Amazon’s FBA centers.
Starting an Amazon FBA business typically involves higher upfront costs compared to other methods. To ensure success, it's important to focus on identifying profitable products. This allows you to trust that your expenses will be recouped and you can avoid unnecessary storage fees for unsold inventory.

Identifying Top Products to Sell with Amazon FBA

High-demand products often generate significant income, due to their high sales volume and reduced advertising costs, since they already have an established audience. To help you identify these types of products, it's essential to evaluate factors such as sales volume, profit margins, seasonality, and more.

However, this analysis can be challenging since the necessary data isn't always readily available to the general public. Fortunately, U.S.-based sellers can benefit from Sellerhook, a service that specializes in detailed product research using the latest and most accurate data. This allows you to easily find the most lucrative product ideas for your FBA business.

To use this service, just follow these steps:
1. Go to the Sellerhook website and choose how many hot products you want to find (one or five).
2. Submit payment. You can pay all at once or in four convenient, interest-free installments.
3. Provide information about your desired category, business model, and other preferences. Sellerhook offers a personalized approach to identifying high-margin products that are tailored to your specific business needs and the criteria you indicate.
4. Get your product research report. Within 10 business days, you will be emailed a curated list of top product ideas.

This service enables you to obtain ideal product ideas effortlessly and save your time. By getting accurate and detailed research conducted by specialists, you increase your chances of profitability and success on Amazon significantly.
See what your research report would look like.

Method 2: Print on Demand (PoD)

Through Amazon’s ‘Merch on Demand’ option, you can sell products on Amazon without buying any inventory. This method is ideal for creative individuals, and doesn't require any specific type of training or a license. Your artwork will appear on a variety of products like hoodies, phone cases, and other items making them unique.

Here's how it works:
1. Start your Amazon Merch on Demand account. Enter your personal and/or business information (bank account, tax ID, etc.). Amazon will review your application within a few business days.
2. Select a product type. Choose from a variety of Amazon products (shirts, bags, etc.) on which your design can be printed.
3. Upload your design. Submit your artwork on Amazon, suggest a selling price, and decide if any text needs to be translated into other languages.
4. Amazon reviews and creates the product page. Once you’re approved, Amazon will create a product page for your design.
5. Earn commissions. When someone buys your product, Amazon will print and deliver it to the customer, and you will earn a royalty.
This method is an ideal way to earn passive income, and offers several benefits:
  • No upfront fees: You can start out with no money required.
  • Wide opportunities: Upload an unlimited number of designs and choose from various types of products on which to print.
  • No hassle: Once you upload a design, Amazon will handle the rest.
However, keep in mind that your profits might be modest with this model, since you only earn a royalty from each sale. To maximize your earnings, it’s important to conduct market analysis to help you identify what kinds of products and designs have the highest demand, and make your marketing efforts stand out from the competition.

Method 3: Dropshipping

Dropshipping is a business model where you import products from a supplier to your Amazon store using a supplier app or integration. When a customer makes a purchase in your store, you pay the supplier for both the product and shipping. The supplier then packs and ships the order directly to the customer, who is usually unaware that you are not the product owner.

This model offers several benefits:
  • Great scalability: You can add or remove products from your store easily, making it simple to expand your product offerings.
  • Lower costs: There’s no need to place large wholesale orders, which reduces your upfront investment.
  • No logistics hassle: You pay for shipping, but the process is managed by your supplier.
However, suppliers often require a subscription to access their product import features, typically starting around $30/month. It’s also crucial to secure a reliable supplier who offers fast and dependable delivery and adheres to Amazon's dropshipping guidelines, such as not using branded packaging.

On average, new dropshippers can earn at least $1,000/month, making this method appealing to those looking to start their own business with a smaller investment. Just keep in mind that you'll have less control over the process since most tasks are handled by the supplier.

Method 4: Digital Products

Another cost-effective and convenient way to make money on Amazon without the need for physical inventory is by selling digital products. You can offer all kinds of digital stuff such as ebooks, apps, images, music, and more.

Here are different ways to source these kinds of products:
  • Create your own: Publish your own ebook through Kindle, create videos, develop apps, and more. This method is cost-free, but also requires self-promotion to generate sales, especially if you're not yet known.
  • Reselling: Sell digital products from other companies. This might entail lower advertising costs if the brand is already known. Keep in mind, you also need to obtain the proper licenses or reselling agreements to sell these products legally.
  • Collaboration: Partner with content creators, who create the digital product (like an app), while you handle promotion and marketing. Ensure that you establish an official contract with the creator that outlines shares, responsibilities, and breach conditions.
  • Public Domain: Sell digital products like old books, music, or images that no longer have copyright protections. Be cautious, as some of these may still be covered by museum property or heritage rights. Verify each product carefully to avoid legal issues.
While digital products are convenient to sell repeatedly without inventory, they might yield lower profits than physical products, due to lower pricing. You'll also need to invest in advertising to help you stand out in the market.

While selling intangible items can generate some income, selling physical products without handling them directly can be more profitable. When choosing your method, it's important to consider which option best suits your preferences, budget, and skills.

FAQs

Can I sell on Amazon without owning a product?

Yes. Methods like offering print-on-demand and digital products allow you to sell on Amazon without owning any inventory. Dropshipping and Amazon FBA may require investments in inventory, but they still don't involve physically handling the products yourself.

How can I sell on Amazon without inventory for free?

Offering your own digital products or participating in a print-on-demand (PoD) program doesn't require any upfront expenses, so you can start your business without buying products or paying logistics fees. However, you will still need to pay Amazon the cost of setting up a seller account, which is either $0.99/sale or $40/month.
How can individuals earn money on Amazon without selling tangible products?

PoD and selling digital products allow you to make money on Amazon without products in stock, since they are inherently intangible. These methods provide flexibility, ensuring profits without touching a product.
Is having stock necessary to sell on Amazon?

No. You can sell on Amazon without having inventory. If you dropship or use Amazon FBA, things are stored and managed by your supplier and Amazon, respectively. For print-on-demand (PoD) or digital products, there is no physical inventory, since these are intangible intellectual properties.

Conclusion

Making money on Amazon successfully without holding any inventory depends on several factors, especially which business model you choose. For instance, with FBA and dropshipping, choosing the right products can increase your sales significantly. Use Sellerhook for efficient research and to receive precise suggestions for high-demand items, enhancing your flexibility and maximizing your opportunities to achieve profits.
See what your research report would look like.
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