Selling products Online without inventory: The ultimate guide

While selling products online without inventory was not possible in the past, now you can do that easily!

Running an online business is possible without investing a considerable amount. E-commerce has become a suitable means for those who want to start with a small investment. It also provides you with an opportunity to expand your business.

Reports show that online retail sales amounted to 4.9 Trillion U.S dollars worldwide.

It means more people are moving towards dropshipping through an online store without inventory. The customers receive their products from the vendor without your direct involvement.

Let’s tell you why and how to sell products online without inventory.

Why You Should Start Selling Products Online Without Inventory

Reports present that about 2.14 billion shoppers now buy items online.

Yet, many people shy away from starting their online business. The need to buy products in large quantities being one major reason. It is no more a problem in 2022!

With more technological advances, you can now operate your business globally. You do not have to take the hassle of storing and maintaining inventory. And did you know that dropshipping has added benefits compared to traditional selling?

Keep reading to know why you should start selling products online without inventory.

Lesser Inventory and Storage Costs

Don’t we all want to invest as less as possible when starting a business?

Online store without inventory allows you to run a business without investing huge capital. You do not have to buy the products and stock them. Storage costs also come down to zero too. Not having stock in hand eliminates the risk of loss in case the products do not sell.

Less Use of Resources

Besides the costs involved in inventory and storage, you also save the salaries and bills. When you do not have to take care of a massive stock, it reduces the number of people working to manage and track it.

It also removes the need for a security company or personnel to take care of the products in the warehouse. Not having to keep an inventory reduces other associated costs as well.

Lower Risks

Many new entrepreneurs do not realize that selling online products is not only about buying the product and sending it to the customer. Online businesses that keep an inventory must have a warehouse for storing stock. The warehouse should also have the latest safety systems. Thus, the convenience of not keeping an inventory takes this worry from you. It is the vendor’s responsibility to deliver the product in good shape to the customer.

Multiple Choices

Everyone is skeptical when starting a new business as there is no surety of how successful it will be. Yes. Despite proper research, the market dynamics may change. Thus, the demand for specific niches or products falls. It does not only apply to delivering products from the supplier to the customer. It also applies to digital services.

So, you have more choices when you start an online store without inventory. You may offer a few products or services and alter them in case of no or low response. You might not try different options when you buy an inventory worth thousands of dollars.

Selling Products Online Without Inventory: 4 Methods

Now that you know why you should open an online store without inventory, here are four ways how you can do that.

Dropshipping

Dropshipping is one of the simplest yet most rewarding online businesses. It does not require you to keep an inventory. Many sellers have moved to dropship in the past years to make more revenue.

The dropshipping model relies on connecting to a reliable vendor. You may upload those pictures to your store to receive orders. The orders are then forwarded to the supplier with the customer’s details. The vendor dispatches the order on your behalf. It also allows you to carry out the business without worrying about other inventory costs.

It saves you from keeping an inventory and reduces risks. And is one of the best options about “how to sell products online without inventory?” Companies like Wefullfill also eliminate the risk of keeping the products in your warehouse. You can choose the 60-day free warehouse trial service.

Yet, dropshipping margins are usually low until you build a loyal customer base. The most important part about dropshipping is finding a trustworthy vendor.Three-way communication between the vendor, you, and the customer can be a pain sometimes.

Read more about dropshipping here (insert link).

Using 3PL (Third-party logistics) company

Third-party logistics generally refer to sending your products to your customer using a third-party courier company.

As you do not have to buy items for dropshipping, you will have to buy a few products that the 3PL may store for you. You must buy the products you sell but do not worry about keeping them safe. The third-party logistics company will do it for you.

3PL companies take care of inventory management, fulfillment, and order tracking. They also offer warehousing for your business. This model enables you to open an online store without inventory by offering product sourcing and storage.

Let’s break down the process for you:

• You purchase and send your products to the 3PL altogether
• You inform the 3PL company when an order is placed
• The 3PL ships the product to the customer on your behalf

3PL is better for stores with more orders. 3PL companies usually charge a flat fee for storage and fulfillment. Unlike dropshipping, you also have to buy the products yourself and ship them to the 3PL.

Offer Digital Services

Who said you could only start online store without inventory when selling through 3PL or dropshipping?

Offering digital services is one of the best choices for online selling. Selling online services requires zero inventory – neither you nor a third party!

Digital services have a higher demand today in an advancing world. People want to use services without having to go out and spend more time dealing. Besides saving time, it also enables businesses to reach their potential customers.

Popular digital services include, digital marketing, web design, graphic design, translation, and transcriptions. eBooks, music, photos, videos, and software are also digital services offered online.

It does not involve anything you have to store anywhere besides your computer or laptop. So, you do not have to worry about managing the inventory.

While it reduces the costs to a greater extent, there are a few associated challenges. The number of people offering digital services online has grown in the past. Thus, it is not possible to convert visitors into leads soon.

If you plan to offer digital services, you must take care of your strategy of how to start an online store without inventory. Engaging more clients requires creating marketing plan and improving your skills.

Choose Fulfillment by Amazon

Amazon is the king of online selling, with over 310 million customers globally.

So, what can be a better place to start your online business than amazon?

The ‘Fulfillment by Amazon program facilitates selling products online without inventory. It was launched in 2006 and has become well-known among sellers.

As the name indicates, Amazon fulfills the orders for you. It is like 3PL. Yet, working with amazon comes with added benefits.

The first and most prominent reason is the number of people visiting the website. Moreover, Amazon takes care of everything once you ship your products to them. You do not have to worry about anything and wait for your account to be credited with the profit amount.

Amazon FBA follows almost the same pattern as 3PL with lesser involvement and effort. Putup your products on Amazon and ship the stock to Amazon for warehousing. The customers place an order that Amazon fulfills. They also take care of the support post-delivery.

Like other services, Amazon charges 15% of your revue and a 10 – 15% fulfillment fee per product. Monetization on Amazon requires you to have profit margins above 66%. One major drawback is that Amazon may ban you anytime. FBA pays you once monthly and may also hold funds for any reason.

FAQs

• How to sell products online without inventory? 

You can sell products online without inventory through dropshipping, 3PL, or amazon fulfillment. All three models are different from each other and come with their pros and cons. But, you do not have to worry about inventory management.

• How to start an online store without inventory?

You can start an online store without inventory and sell products or digital services. Dropshipping and FBA allows you to start a business without keeping an inventory. Inventory storage and shipping companies can also help open online store without inventory.

• Is Starting an Online Store Without Inventory Smart? 

Yes. It is the best thing to do when over 2.14 billion buy online. Not keeping an inventory saves costs, reduces risks, and allows you to explore more options. You can utilize services to forget about inventory management issues and receive your profits.

• What Is the Best Way to Sell Products Online Without Inventory? 

Dropshipping is considered one of the best ways to sell products online without inventory. Yet, many people also opt for FBA as they receive their monthly profits with the least involvement.

Conclusion

Selling products online without inventory is becoming a widely adapted concept globally. It is a more convenient and cost-saving method of online selling. You can reach the same number of customers without the risks associated with inventory keeping. It eliminates the need for additional bills, maintaining a warehouse, and keeping extra staff for the inventory. Selling services through an online store without inventory is the future of online selling.

Choose what suits you, and start an online store without inventory today!

shailesh is a Design Founder & Advisor, Berlin School of Creative Leadership Executive MBA participant, Zippie advisor, Wolt co-founder, and Nordic Rose stakeholder.