Selling on Amazon has become a lucrative way for entrepreneurs to tap into the booming e-commerce world, but the idea of managing inventory can feel overwhelming. What if you could skip the hassle of stocking products, managing warehouse space, and dealing with shipping logistics altogether? With Amazon's innovative fulfillment options and dropshipping strategies, you can successfully build a profitable Amazon business without ever holding physical inventory. In this guide, we’ll show you how to leverage these methods to sell on Amazon efficiently and stress-free. Ready to dive in? Let’s get started!
What are the best no-inventory selling options on Amazon?
Amazon offers several options that allow you to run a business without ever handling your own inventory. Here are five such no-inventory methods that can help you launch and scale your Amazon business smoothly -
Dropshipping
Dropshipping is one of the most popular no-inventory online business models on Amazon. Dropshippers fulfill about 34% of Amazon sales. With Amazon dropshipping, you partner with suppliers who fulfill customer orders on your behalf. You list some highly profitable products on Amazon, and once a customer makes a purchase, the supplier ships the product directly to the buyer. This model minimizes your involvement in product handling and storage space, allowing you to focus on marketing and customer service. The key to success in dropshipping is finding reliable suppliers with competitive pricing to ensure customer satisfaction and healthy profit margins.
Merch by Amazon (Print on demand)
Merch by Amazon offers a fantastic opportunity to sell custom-designed products, like t-shirts or hoodies, without managing inventory. With this print-on-demand model, you simply upload your designs to the platform. When potential customers order a product, Amazon handles the printing, packaging, and shipping. This is an ideal option and a great way to make money for designers, artists, and entrepreneurs who want to capitalize on their creativity without the hassle of production. Since Merch by Amazon takes care of all logistics, you can focus on creating appealing designs that resonate with your target audience, instead of spending time on inventory management.
Kindle Direct Publishing (KDP)
Kindle Direct Publishing (KDP) is a great no-inventory option for writers and content creators. With Amazon KDP, you can publish eBooks, paperbacks, and audiobooks directly on Amazon. According to WordsRate, Amazon releases over 1.4 million self-published books through KDP annually. Amazon prints and ships physical copies on demand, meaning you don’t have to worry about storing or managing book inventory. Whether you’re a seasoned author or someone with niche expertise, KDP allows you to reach a massive audience without the traditional overhead of publishing. Plus, you retain control over pricing and royalties, making it a highly scalable business model.
Digital products
Selling digital products, such as online courses, software, or downloadable guides, is another inventory-free business model on Amazon. Since digital products are delivered electronically unlike physical goods, you don’t need to worry about shipping or physical storage. Amazon’s platform provides a seamless way to list and distribute these products to a global customer base. Offering digital products not only eliminates inventory concerns but also creates a passive income stream, as customers can continuously purchase and download your products without ongoing effort from you.
Amazon affiliate marketing
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Amazon’s affiliate marketing , also known as Amazon Associates Program, allows you to earn commissions by promoting Amazon products without handling inventory. You create content such as blogs, videos, or social media posts, embedding affiliate links to Amazon listings. When someone clicks on your link and makes a purchase, you earn a percentage of the sale. This is a low-risk, high-reward option for content creators who want to monetize their platforms by recommending Amazon products. The best part? You don’t need to worry about shipping, returns, or customer service—Amazon takes care of everything. Interestingly, Amazon made $1.28 billion in revenue through affiliate programs in Q1 2023
What are the pros and cons of each method?
Here are the positives and negatives of each method that can help you make an informed decision -
Pros and cons of dropshipping
|
Pros |
Cons |
|
1. No need to handle inventory or shipping; suppliers manage this. |
1. Lower profit margins due to supplier and platform fees. |
|
2. Low upfront investment, making it accessible for beginners. |
2. High competition, making it difficult to stand out. |
|
3. Wide variety of products available for sale from multiple suppliers. |
3. Less control over shipping times and product quality, which can impact customer satisfaction. |
|
4. Easily scalable as you don't need to worry about warehousing or logistics. |
4. Managing customer service and returns can be challenging if the supplier is uncooperative. |
|
5. Flexibility to test different products and niches quickly. |
5. Reliance on third-party suppliers can lead to inventory stock issues or delays. |
Pros and cons of merch by Amazon
|
Pros |
Cons |
|
1. No upfront costs for inventory, as Amazon prints products only when ordered. |
1. Limited to Amazon's base products, restricting customization options beyond designs. |
|
2. Amazon handles printing, packaging, and shipping, simplifying logistics. |
2. High competition in popular niches, making it difficult to stand out without strong marketing. |
|
3. Global reach, allowing you to sell your designs worldwide. |
3. Lower profit margins due to Amazon's fees and commissions. |
|
4. Offers a passive income stream once designs are uploaded and listed. |
4. You have limited control over pricing, as Amazon sets base costs. |
|
5. Creative outlet for designers, enabling them to monetize their work without production concerns. |
5. Merch by Amazon has an application process, and not everyone is approved right away. |
Pros and cons of Kindle Direct Publishing
|
Pros |
Cons |
|
1. No need to manage inventory, as Amazon prints books on customer demand. |
1. Requires time and effort to write, format, and publish a book. |
|
2. Passive income potential, as books continue to generate sales without ongoing effort. |
2. High competition, especially in popular genres, making it harder to gain visibility. |
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3. Global distribution on Amazon's platform, reaching millions of readers. |
3. Royalties may vary based on book price, region, and platform fees. |
|
4. Control over pricing and royalties, allowing you to adjust based on market demand. |
4. Marketing and promoting your book are essential for success, requiring additional effort. |
|
5. Option to publish in various formats (eBook, paperback, and audiobook). |
5. Negative reviews can affect sales, and correcting issues in published books takes time. |
Pros and cons of selling digital products
|
Pros |
Cons |
|
1. No physical inventory, shipping, or storage costs, making it a high-margin business. |
1. Requires upfront effort to create digital products, like courses or guides. |
|
2. Can create passive income, as customers can purchase digital products indefinitely. |
2. The initial creation process (videos, guides, software) can be time-consuming. |
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3. Scalability, as digital products can be sold to an unlimited number of people. |
3. Need for ongoing updates or improvements based on customer feedback. |
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4. Instant delivery to customers with no shipping delays. |
4. Requires a strong marketing strategy to drive traffic and visibility for digital products. |
|
5. Potential to sell various types of digital goods (eBooks, software, courses, etc.). |
5. Difficult to protect intellectual property, as digital products are more prone to piracy or misuse. |
Pros and cons of Amazon affiliate marketing
|
Pros |
Cons |
|
1. No need to handle products, inventory, or shipping. |
1. Low commission rates, especially for lower-priced items. |
|
2. Easy to get started with minimal upfront investment. |
2. Requires significant traffic to your website or platform to earn substantial income. |
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3. Can promote a wide variety of products across various niches. |
3. Dependent on people purchasing through your links, which may not always result in conversions. |
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4. Passive income potential, as links can generate sales over time. |
4. Earnings can be inconsistent, especially during periods of low traffic. |
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5. No responsibility for customer service, returns, or refunds, as Amazon handles it all. |
5. Amazon can change commission rates or terms at any time, affecting earnings. |
What factors matter most when selling without inventory?
Here are the key aspects you need to take care of when picking any method that helps you sell without inventory -
Setting up your Amazon seller account
The first step to selling on Amazon without inventory is to ensure your account is set up correctly. Choose between an individual or professional seller account based on your sales expectations. For those looking to scale, a professional account is recommended, as it allows for unlimited product listings and access to advanced tools like advertising options and bulk listing uploads. You’ll also want to ensure your account complies with Amazon’s policies, especially when dealing with third-party suppliers (like in dropshipping) to avoid any potential account suspensions.
Key considerations for account setup:
- Ensure your account is in good standing and meets all of Amazon’s policies.
- Optimize your seller profile and store layout to build customer trust.
- Choose a professional seller account if you plan to sell large volumes.
Creating your product
Even though you may not physically hold inventory, the quality and appeal of your product listing are critical. Whether you’re working with a print-on-demand service like Merch by Amazon or selling digital products, your product creation process must be thoughtful. Focus on high-quality visuals, detailed product descriptions, and persuasive copy to showcase the value of your products. For those creating digital or print-on-demand products, ensure the content or design resonates with your target audience and meets their needs.
Key elements for product creation:
- High-quality images and mockups to represent your product.
- Clear, keyword-optimized product titles and descriptions.
- Strong emphasis on unique selling points (USPs) to stand out.
Identifying a profitable niche
Choosing a profitable niche is one of the most crucial factors when selling without inventory. You need to find a niche that has demand but isn’t overly saturated with competition. Conduct thorough product research and market research using tools like Jungle Scout, Helium 10, or Amazon’s Best Seller lists to identify product trends and gaps in the market. Ensure the niche aligns with your long-term business goals and that you’re targeting an audience willing to spend on the products you plan to offer.
Key considerations for niche selection:
- Look for low-competition niches with high demand.
- Analyze market trends and customer reviews to spot unmet needs.
- Choose a niche that allows room for growth and expansion.
Implementing effective launch strategies
Successfully launching your no-inventory Amazon store requires strategic planning. Start by optimizing your product listing for Amazon SEO, using relevant keywords to increase visibility in search results. Run targeted Amazon PPC (Pay-Per-Click) campaigns to drive traffic to your product, especially during the initial launch phase. Additionally, gathering early reviews through Amazon’s Early Reviewer Program or offering promotional discounts can help establish credibility and encourage more sales.
Key elements of an effective launch:
- Use Amazon PPC ads to gain visibility and drive traffic.
- Optimize product listings for Amazon’s search algorithm (A9).
- Offer limited-time discounts or bundles to attract early customers.
- Collect reviews as soon as possible to build social proof.
Finding reliable suppliers
If you’re using a dropshipping or print-on-demand model, finding reliable suppliers is essential. You’ll need to ensure that your suppliers offer high-quality products, deliver on time, and can scale with you as your business grows. Read reviews, test products yourself, and maintain constant communication with your suppliers to avoid potential issues with shipping delays or product quality. A good relationship with your supplier ensures smooth order fulfillment process and happier customers.
Key considerations when choosing suppliers:
- Research supplier reviews and ratings to ensure reliability.
- Test products yourself to verify quality and shipping times.
- Negotiate terms to ensure the best margins and service levels.
- Maintain open communication to resolve issues quickly.
What is the ROI of each method?
Here are the approximate returns you might experience when you adopt different methods discussed in this post -
ROI of Amazon dropshipping
Earnings Estimate: Profit margin in dropshipping typically ranges from 10% to 30%, depending on the product and supplier.
Example Calculation:
- Selling price of product: $100
- Supplier cost: $70
- Profit margin: $30 (30%)
- Monthly sales: 50 units
Monthly Profit: 50 units×$30 profit per unit=$1,50050 units×$30 profit per unit=$1,500
Annual Profit: $1,500 monthly×12=$18,000$1,500 monthly×12=$18,000
Potential Earnings Range:
- Monthly: $500 to $3,000, depending on sales volume and margin
- Annual: $6,000 to $36,000
ROI of merch by Amazon (Print on Demand)
Earnings Estimate: For print-on-demand, profits depend on the price set for each item and the royalty Amazon pays. On average, sellers earn about $2 to $7 per sale.
Example Calculation:
- Selling price of a t-shirt: $19.99
- Amazon royalty: $5 per sale
- Monthly sales: 100 units
Monthly Profit: 100 units×$5 profit per unit=$500100 units×$5 profit per unit=$500
Annual Profit: $500 monthly×12=$6,000$500 monthly×12=$6,000
Potential Earnings Range:
- Monthly: $100 to $2,000, depending on the product, sales volume, and niche
- Annual: $1,200 to $24,000
ROI of Kindle Direct Publishing (KDP)
Earnings Estimate: Amazon offers 35% or 70% royalties, depending on your book's pricing. Most KDP authors price their books between $2.99 and $9.99.
Example Calculation:
- eBook price: $4.99
- Royalty rate: 70%
- Royalty per sale: $3.50
- Monthly sales: 200 units
Monthly Profit: 200 units×$3.50=$700200 units×$3.50=$700
Annual Profit: $700×12=$8,400$700×12=$8,400
Potential Earnings Range:
- Monthly: $100 to $2,500 (depending on the niche, marketing efforts, and popularity)
- Annual: $1,200 to $30,000
ROI of selling digital products
Earnings Estimate: Digital products have high-profit margins (usually 70% to 90%) since there are no physical costs associated with production or shipping.
Example Calculation:
- Price of a digital course: $49
- Profit margin: 80%
- Profit per sale: $39.20
- Monthly sales: 50 units
Monthly Profit: 50 units×$39.20=$1,96050 units×$39.20=$1,960
Annual Profit: $1,960×12=$23,520$1,960×12=$23,520
Potential Earnings Range:
- Monthly: $500 to $10,000 (depending on product quality, niche, and marketing)
- Annual: $6,000 to $120,000+
ROI of Amazon affiliate marketing
Earnings Estimate: Amazon affiliate commission rates range between 1% and 10%, depending on the product category. Let’s assume a 4% average commission rate.
Example Calculation:
- Average order value: $100
- Commission rate: 4%
- Earnings per sale: $4
- Monthly sales through affiliate links: 300 orders
Monthly Profit: 300 orders×$4=$1,200300 orders×$4=$1,200
Annual Profit: $1,200×12=$14,400$1,200×12=$14,400
Potential Earnings Range:
- Monthly: $100 to $3,000, depending on traffic and conversion rates
- Annual: $1,200 to $36,000+
Summary of potential earnings
|
Method |
Monthly Potential |
Annual Potential |
|
Dropshipping |
$500 – $3,000 |
$6,000 – $36,000 |
|
Merch by Amazon (Print on Demand) |
$100 – $2,000 |
$1,200 – $24,000 |
|
Kindle Direct Publishing (KDP) |
$100 – $2,500 |
$1,200 – $30,000 |
|
Digital Products |
$500 – $10,000 |
$6,000 – $120,000+ |
|
Amazon Affiliate Marketing |
$100 – $3,000 |
$1,200 – $36,000 |
How do you manage your no-inventory business?
Here are some tips to manage different aspects of your Amazon business without holding any upfront inventory -
Order management
Effective order management is crucial when selling without inventory, especially if you’re using dropshipping or print-on-demand services. You don’t control fulfillment directly, so ensuring that orders are processed accurately and on time requires constant communication with your suppliers.
Best practices for order management include:
- Automation: Utilize order management software or Amazon’s built-in tools to automatically route orders to your suppliers.
- Tracking Information: Always provide customers with tracking information to keep them informed about their orders.
- Monitoring Fulfillment: Regularly follow up with suppliers to ensure they are meeting shipping times and delivering products as expected.
Handling returns and refunds
Returns and refunds are an inevitable part of e-commerce, even when you don’t hold inventory. You need to develop a clear and customer-friendly returns policy. For dropshipping and print-on-demand, this often means coordinating returns directly with your suppliers.
Key tips for handling returns and refunds:
- Clear Return Policies: Set up an easy-to-understand return and refund policy on your Amazon store that aligns with Amazon’s own policies.
- Supplier Communication: Ensure your suppliers are prepared to handle returns and process refunds or replacements quickly.
- Customer Service: Always respond promptly to return requests and handle issues in a professional and empathetic manner to avoid negative reviews.
Supplier relationship management
Since you’re not physically managing inventory, maintaining strong relationships with your suppliers is critical. Whether you're dropshipping or using a print-on-demand service, your suppliers directly impact the quality of the customer experience.
Best practices for managing supplier relationships:
- Regular Communication: Keep the lines of communication open with your suppliers to resolve issues quickly and avoid delays in order fulfillment.
- Quality Checks: Periodically order samples of your products to ensure that the quality remains high and consistent.
- Negotiate Terms: As your business grows, negotiate better terms, such as lower prices or faster shipping, to improve your margins and customer experience.
Demand forecasting
Even though you don’t hold physical inventory, forecasting demand is still important. By anticipating busy periods, you can ensure that your suppliers are prepared to fulfill orders quickly and efficiently. Failing to do so can result in missed opportunities and unsatisfied customers.
Tips for inventory forecasting:
- Analyze Sales Data: Use Amazon’s reporting and analytics tools to track your sales patterns and adjust accordingly during peak seasons.
- Communicate with Suppliers: Let your suppliers know when you anticipate higher sales so they can stock up on products and avoid delays.
- Marketing Alignment: Align your marketing strategies with your supply chain to ensure smooth operations during product launches or promotions.
Customer service and communication
Since you are not managing physical products, excellent customer service and communication become even more important. Unlike traditional selling, a no-inventory model might lead to potential delays or other fulfillment issues that you have no control over, but can significantly impact customer satisfaction.
Best practices for handling customer service process:
- Prompt Responses: Make sure to address customer inquiries and complaints promptly, especially if there are shipping delays or product issues.
- Clear Communication: Keep customers informed at every step of the purchasing process, especially when there are issues outside your control.
- Encourage Reviews: Positive reviews can mitigate negative feedback caused by factors like slow shipping, so incentivize satisfied customers to leave reviews.
How can BeBOLD Digital help you?
At beBOLD Digital, we specialize in helping brands elevate their presence on Amazon through tailored marketing strategies. As a full-service Amazon agency, we understand the nuances of the platform and leverage our expertise to drive visibility and sales for our clients. From optimizing product listings to managing advertising campaigns, we are dedicated to maximizing performance and ensuring our clients achieve their business goals.
Our approach combines data-driven insights with creative solutions, allowing us to craft strategies that resonate with target audiences and lead to sustainable growth in the Amazon marketplace. We also empower brands to sell without inventory, utilizing innovative fulfillment methods to streamline their operations and enhance profitability.
Book a call to learn more about us.
Conclusion
Selling on Amazon without inventory opens up a world of opportunity, allowing you to tap into Amazon's vast marketplace without the overhead of managing stock. Whether you choose dropshipping, print-on-demand, or affiliate marketing, the key is selecting the right method for your skills and goals. By focusing on building strong supplier relationships, implementing effective strategies, and providing great customer service, you can grow a thriving, low-risk business. Now that you know the options, it’s time to start your journey toward selling successfully on Amazon without ever holding a single product!
Frequently Asked Questions
What is the best method for beginners?
For beginners, Amazon Affiliate Marketing and Merch by Amazon are ideal due to their simplicity and low upfront costs. Affiliate marketing involves promoting products, while Merch allows you to sell custom designs. Both are easy to set up and require minimal management.
Can I use multiple selling methods simultaneously?
Yes, you can use multiple methods, such as combining Amazon Affiliate Marketing with Kindle Direct Publishing or Merch by Amazon. Diversifying income streams can boost profits and reduce risk. Just ensure you can manage all your ventures effectively.
How do I handle customer service when I don't have inventory?
Even without inventory, customer service is essential. You’ll need to manage communication, returns, and refunds by coordinating with your suppliers or Amazon’s systems. Prompt, professional responses are key to maintaining customer satisfaction.
Are there any hidden costs associated with these methods?
Yes, while upfront costs are minimal, hidden expenses can include transaction fees, marketing costs, or platform commissions. For example, Dropshipping may involve fees for suppliers, and Merch by Amazon deducts printing and fulfillment costs from sales.
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