Selling online on Amazon is a great way for individuals and businesses to reach millions of potential customers.
The internet has revolutionized the way businesses operate, providing entrepreneurs with access to a global market at their fingertips. With a relatively low start-up cost and the ability to reach a large audience through e-commerce platforms, social media and other online marketing channels, it’s never been easier for individuals to start their own online businesses.
The Internet provides a level playing field for small businesses to compete with established corporations, allowing anyone with a good idea and a strong work ethic to succeed in the online arena.
Selling on Amazon Without Products
So what if you want to sell on Amazon and dont have the capital to buy goods in bulk or you are just short of funds? Is there a way to sell on Amazon without products? Yes there is a way to accomplish this. We are going to look at three ways to go about this.
The first method assumes you don’t have the finances to buy the stock, the other two methods assume you have the ability to purchase the stock but don’t want to store them in your own warehouse
- Dropshipping with Amazon
- Amazon Fulfillment by Merchant
- Amazon FBA
Selling on Amazon without holding inventory has several advantages, including:
- Lower start-up costs: Without the need to purchase and store inventory, you can start selling on Amazon with lower upfront costs.
- Flexibility: You can offer a wider range of products without having to worry about storing and managing inventory, giving you the flexibility to test different products and adjust your offerings based on customer demand.
- Reduced risk: Without having to hold inventory, you are not exposed to the risk of having unsold stock or the cost of storing and managing it.
- Improved cash flow: By not having to invest in inventory upfront, you can keep more of your funds available for other business expenses.
- Focused efforts on marketing and sales: By outsourcing the storage and shipping of products to a third-party provider, you can focus your efforts on sourcing products and promoting them to customers, which can help drive sales and grow your business.
Drop Shipping on Amazon
Drop shipping is a retail fulfillment method where a person or store doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third-party supplier, who ships it directly to the customer.
This eliminates the need for you handling the physical product and allows you to sell on Amazon a wide range of products without having to hold and manage inventory. Drop shipping is often used by online retailers and is a popular method for starting an e-commerce business with limited start-up capital.
The main work is marketing the products, processing orders, and handling customer service, while the supplier handles storage, packing, and shipping.
Advantages of Drop Shipping on Amazon
Drop shipping can provide a number of benefits to you, including reduced risk, lower overhead costs, and increased flexibility.
Disadvantages of Drop Shipping on Amazon
While drop shipping through Amazon can be a convenient way to start an e-commerce business, it also has several disadvantages that should be considered, including:
- Increased competition: Amazon is a highly competitive marketplace, and there may be many other sellers offering similar products, which can make it difficult to stand out and attract customers.
- Dependence on the supplier: Drop shipping relies heavily on the supplier’s ability to fulfill orders in a timely and accurate manner. If the supplier experiences problems, it can affect the delivery times and customer satisfaction, which can damage your brand and reputation.
- Limited control over product pricing: The price of products sold through drop shipping is determined by the supplier, which may not align with your pricing strategy. This can make it difficult to offer competitive prices or maintain a desired profit margin.
- Lack of control over product quality: Since the retailer does not physically handle the product, it can be difficult to assess its quality. This can lead to customer complaints and returns, which can damage your brand and reputation.
- Difficulty in providing exceptional customer service: Since the retailer does not handle the physical product, it can be difficult to provide timely and accurate information about the product to the customer, which can lead to customer service issues.
Amazon Fulfilled by Merchant (FBM)
Amazon Fulfilled by Merchant (FBM) is a fulfillment option for sellers on Amazon where the seller is responsible for storing, packing, and shipping the products they sell to customers. With FBM, sellers list their products on Amazon and handle all aspects of the fulfillment process, including customer service, returns, and product tracking.
Unlike Amazon’s Fulfillment by Amazon (FBA) program, FBM requires the seller to handle all aspects of order fulfillment, but it gives the seller more control over the fulfillment process, including shipping and handling costs, packaging, and the ability to offer personalized promotions and discounts.
So what services can sellers use to fulfill customer orders?
3PL – 3rd Party Logistics Fulfillment Through Amazon
Third-party logistics (3PL) companies provide various supply chain and fulfillment services to Amazon sellers to store and ship their products to customers. Some popular 3PL companies that Amazon sellers use include:
- Fulfillment by Amazon (FBA)
- Rakuten Super Logistics (formerly Webgistix)
- RedStag Fulfillment
- FedEx Supply Chain
- DHL eCommerce Solutions
- UPS Supply Chain Solutions
These companies offer a range of services including storage, order picking, packing, and shipping. By outsourcing these tasks to a 3PL, sellers can free up time and resources to focus on other aspects of their business, such as product development and marketing.
3PL companies can also offer cost savings and improved shipping times through their established relationships with carriers and shipping networks.
Advantages of 3PL Companies
There are several advantages of using a third-party logistics (3PL) company for delivering products on behalf of Amazon sellers:
- Cost savings: 3PL companies often have economies of scale, which enables them to offer lower shipping rates and storage fees compared to what an individual seller might pay.
- Improved shipping times: 3PL companies have established relationships with carriers and can often offer faster shipping times compared to what a seller could arrange on their own.
- Increased flexibility: 3PL companies offer a range of services including storage, order picking, packing, and shipping, which allows sellers to choose the services they need and scale their operations as their business grows.
- Reduced workload: By outsourcing fulfillment tasks to a 3PL, sellers can free up time and resources to focus on other aspects of their business, such as product development and marketing.
- Access to technology: 3PL companies often use advanced technology to streamline their operations and provide real-time tracking and reporting to sellers.
- Improved customer experience: 3PL companies are typically experienced in fulfilling orders, and they can provide a higher level of service and a more seamless experience for customers. This can help improve customer satisfaction and increase customer loyalty.
Amazon FBA For Sellers Who Don’t Store Inventory
Amazon FBA (Fulfillment by Amazon) is a service provided by Amazon that allows sellers to store their products in Amazon’s fulfillment centers. Amazon then picks, packs, ships, and provides customer service for these products on behalf of the seller.
This eliminates the need for sellers to handle the storage and shipping of their products, allowing them to focus on growing their business. With FBA, sellers can take advantage of Amazon’s vast network of customers, trusted brand, and shipping expertise, potentially increasing sales and improving customer experience.
This strategy assumes you have the financial muscle to buy the stock but don’t want the hassle of storing it yourself.
Advantages of Amazon FBA:
- Convenience: With Amazon FBA, sellers can store their products in Amazon’s fulfillment centers, which saves them time and effort of packing and shipping orders themselves.
- Reach: Amazon is one of the largest e-commerce platforms in the world, which gives sellers access to a massive audience of potential buyers.
- Reputation: Amazon is known for its excellent customer service, and as a result, products sold through Amazon FBA tend to have higher customer ratings and are more trusted.
- Increased Sales: Products that are fulfilled by Amazon are eligible for Amazon Prime and other shipping benefits, which can increase sales.
Disadvantages of Amazon FBA:
- Fees: Amazon FBA can be expensive, with fees for storage, pick and pack, and shipping.
- Loss of Control: Sellers have to rely on Amazon’s handling and storage of their products, which can result in damage or loss of inventory.
- Competition: With so many sellers using Amazon FBA, the competition can be intense, which makes it difficult to stand out from the crowd.
- Limited Flexibility: Amazon sets the rules for FBA and sellers have to abide by them, which can limit their ability to make changes or offer unique promotions.
Selling products on Amazon without holding inventory is possible. As we have discussed, you can accomplish this through drop shipping, fulfillment by Amazon Merchant and also fulfilling your orders through Amazon FBA program (this assumes you have the products but dont want to store them).