You don’t need tens of thousands of dollars to purchase initial inventory for Amazon FBA and FBM before getting a pie of the $143.3 billion in net sales revenue the e-commerce giant pulled in Q1 2024 alone.
Selling on Amazon without inventory means focusing on finding the best product for your target market and pivoting quickly to other profitable products if necessary — without spending much money to start.
This article explores how to sell on Amazon without inventory via four unique methods.
Key Takeaways
- Selling without holding inventory has several benefits, such as minimal business capital and Amazon fee requirements.
- Dropshipping and digital products provide the best ways to sell without any stock on Amazon.
- You must adhere to Amazon policies when selling without inventory to avoid account bans.
1 Dropshipping on Amazon
Best For: Entrepreneurs with limited capital, students, 9-5 workers, stay-at-home parents, etc.
Earning Potential: 10-30% margins (before Amazon fees).
Core Requirements: Amazon selling account, product research tools.
Average Startup Cost: $200 (without ads).
In dropshipping, the seller is a middleman between the manufacturer and the customer.
The process starts with the seller (you) researching a supplier and product and creating a product listing to market your choice. Once a customer places an order, you forward the order and the customer’s details to the supplier, who ships directly to the customer.
In this chain, you’ll profit from the difference between what the customer paid and what you pay the manufacturers/suppliers. Hence, finding manufacturers/suppliers with low product prices is essential to add a healthy profit margin.
That’s where tools like AMZScout’s dropshipping extension come in. The tool scans products you want to drop ship (if on Amazon) to see whether they’re in a gated category or if it’s a private label offering, and it shows you potential profits.
For instance, I used the extension to research a USB cable on Amazon, which sells for $9.99 a pop and has an estimated monthly sales of 300.
Using the same tool, I looked for the product on Alibaba, which only cost $0.02 – $0.04!
Just imagine how much profit you’ll get from that!
The best part is that you can get this tool for a one-time price and never bother about monthly payments! Fortunately, you can use the main AMZScout plan to find the best keywords to boost your listing and even create a winning listing from scratch.
- Requires minimal business capital
- No inventory or Fulfillment by Amazon fees
- You only pay for a product after a customer has placed an order, keeping the difference as your profit
- You can quickly drop a product idea if it isn’t selling
- Can be a stepping stone to a successful private-label business
- Stiff competition because of low entry barrier
- Shipping time can be high, depending on the supplier’s location
- Suppliers can make or break your business since product batches can be different
- Shipping costs can be higher than average since you aren’t ordering large batches at a time
How to Get Started: Step-By-Step Guide
Here’s how to start Amazon dropshipping step-by-step:
- Create an Amazon seller account. You can follow our in-depth starter guide to help you.
- Research products to sell. You can use advanced seller tools such as AMZScout’s dropshipping extension or try Nepeto.
- Partner with a reputable supplier who’s familiar with dropshipping on Amazon.
- Create carefully-optimized product listings. You can use AMZScout’s Listing Builder for streamlined results.
- List the products you’re dropshipping at a healthy profit margin. Ensure you’ve accounted for delivery fees, Amazon selling fees, and other related fees.
- Forward customer details to suppliers after every order. Alternatively, tools like Spocket integrate with Amazon and automate the fulfillment process.
- Pay the supplier (for the product + related fees, like delivery costs).
- Pocket the difference!
2 Print on Demand
Best For: Creatives, influencers, designers, 9-5 workers.
Earning Potential: Up to 35% royalties (Amazon POD).
Core requirements: Design skills and a computer.
Average startup cost: From $100 (ad spend).
Print-on-demand (POD) involves manufacturing a product after a customer orders.
The seller (you) creates a design and generates mockups for product listings.
Each time a customer pays, a POD company manufactures and ships the product.
Print-on-demand affords several benefits, including total control over the product design and the supplier’s handling of order fulfillment. It’s also easy to start, and you can add your branding to the prints.
Some sellers start by signing up with popular POD companies like Printify and Printful.
Better still, you can sign up for Merch by Amazon – Amazon’s print-on-demand company.
If you use Amazon Merch on Demand, Amazon prints your designed merchandise, ships it to the customer, and pays you royalties on every sale. Even better, you don’t have to pay Amazon seller account fees, and your products can be shipped via Prime.
However, integrating with other POD companies means using the Amazon FBA or FBM fulfillment method, signing up for an Amazon account, and paying associated fees.
That said, making money via Print on Demand is a numbers game. Hence, it’s best to publish many beautiful designs to increase your chances of making a decent income from the most successful ones.
Use PrettyMerch to research trending and interesting Amazon merch design ideas and to analyze your sales.
- Complete control over product designs and placements
- Zero business capital is required
- Amazon Merch products are available via Prime
- Easy to drop low-performing designs for new ones
- Only design and market your merch
- Might require ad spending to gain traction
- POD companies can make or break the business
- Stiff competition, which makes it difficult to stand out
- Net profit may be low
How to Get Started: Step-By-Step Guide
Creating a POD business on Amazon is very easy. For this example, I’ll show you how to sign up for Merch by Amazon to avoid paying subscription fees to third-party providers:
- Sign up for Amazon Merch on Demand.
- Sign into your Amazon account or create a new one.
- During sign-up, complete business details, including type, business name, and address.
- Next, fill in your bank details. If your country isn’t supported, create a free Payoneer account and input your Payoneer United States bank details here.
- Click “Complete Tax Information” to fill in tax details.
- After filling in all the required info, click “Save and Preview.”
- Add your signature and current date, then click “Submit Form.”
- Click “Exit Interview” to continue.
- Scroll to the bottom of the page and click “Save and Continue.”
- Select “Novelty T-Shirt Business” while filling in “Industry Type.”
- Submit your application and wait for the Amazon team to review it. Sellers hear back anywhere from within 24 hours to up to three weeks.
- Once Merch by Amazon accepts your application, start creating and uploading your designs.
3 Digital Products
Best For: Creatives, artists, writers, and app developers.
Earning Potential: Up to 70% profit per ebook sale; $4 – $7 per 1,000 music streams.
Core Requirements: Seller account, a computer, and a digital product.
Average Startup Costs: $0
Digital products that you can sell on Amazon include ebooks, digital art, software, music, and videos. Given the nature of these products, there isn’t any need for inventory or shipping.
You simply create a digital product and put it up for sale, making it instantly available to customers.
Even though you pay a commission to Amazon each time someone buys your digital product, you’ll still enjoy advantages such as no long delivery times and zero searches for reliable suppliers.
If you are selling ebooks or audiobooks via Amazon KDP, we have this interesting KDP sales and research guide to help you hit the ground running. Furthermore, you can explore Amazon Prime to market your videos and Amazon Music to push your music.
- No need for business capital
- Potentially high-profit margins
- Zero physical inventory or shipping fees
- Products are instantly available to customers
- Stiff competition since the barrier of entry is low
How to Get Started: Step-By-Step Guide
Want to learn how to sell digital products on Amazon? It’s simple:
- Sign up for the Amazon digital platform you wish to sell on.
- Upload your digital file.
- Please complete all necessary product details, such as the artist, writer, genre, title, description, and cover images.
- Submit to Amazon for upload.
- Market your product once your submission is approved.
4 Amazon Influencer Program
Best For: Content creators, influencers, bloggers.
Earning Potential: 1 to 20% commission per sale.
Core Requirements: Amazon Associates account, an audience.
Average Startup Costs: $0
The Amazon Influencer Program, like Amazon Associates, involves promoting other people’s products and getting commissions for every sale that Amazon attributes to you.
So, you can do away with product research, inventory management, shipping, or customer support.
However, there’s a (great) twist:
Unlike the basic Amazon Associates, you don’t have to worry about constantly sending new traffic to the e-commerce platform. Instead, the content on your storefront (videos, images, etc.) makes money whenever a buyer views them before purchasing.
This is called Onsite Earnings, and here’s an excellent short video guide to learn more:
You can get your earnings after your attributed commissions reach a certain threshold.
This threshold is $10 for affiliates who prefer to get paid by card but $100 for affiliates who want cheque payments.
- Super easy to get started
- You only focus on marketing products
- You get paid automatically for attributed sales
- You can easily promote certain products over others or change your mind
- Higher passive income opportunity with Amazon Onsite Earnings
- Stiff competition in high-commission categories
- Net profit is low
- You need an engaged audience to succeed
- There are strict content policies to adhere to
How to Get Started: Step-By-Step Guide
- Sign up for the Amazon Influencer Program.
- Pick a niche. It’s not mandatory, but I recommend this to establish yourself as an expert in that field.
- Select relevant products to promote. Promoting mid- to higher-priced products in your niche is the best way to earn a decent income from your efforts.
- Add the products you want to recommend to your storefront.
- Create content around those products.
- Promote your content via SEO, social media, or other tactics.
- Extra: Create videos around products found on Amazon and add them to your storefront for a shot at Onsite Earnings.
Ensure you’re always aligned with Amazon’s content and promotion policies when you join its Influencer program.
Benefits and Drawbacks of Selling on Amazon Without an Inventory
Even though it’s super easy to sell on Amazon without any stock, there are still a few cons.
Let’s discuss the benefits and drawbacks of selling without physical inventory on Amazon so you’re better prepared.
Benefits
Many sellers prefer to sell on Amazon without inventory for the following reasons:
- It’s easy to start: You’re not spending much money initially and can quickly recover from product idea mistakes.
- There’s minimal risk involved: For instance, if you dropship a product that doesn’t sell well, you can easily switch to another product and not lose tons of inventory.
- You need very little business capital: While private label requires thousands of dollars to start (initial stock, shipping, storing in warehouses, etc.), selling with zero inventory involves only paying for an account (not all cases) and maybe test samples.
- You pay minimal seller fees: If you choose to dropship, you’ll only pay Amazon’s Individual or Professional account fees. The product’s price covers everything else you need to pay the supplier.
- Stepping stone to private label: Once you start selling without the need to manage inventory, you can learn specific aspects of Amazon before going private label. For instance, you can use drop shipping to learn the ins and outs of product research.
Drawbacks
Still, selling on Amazon without inventory presents its disadvantages:
- You’ll face a lot of competition: After all, these businesses are relatively easy to start.
- You have limited control over the product’s quality: That’s because you’re paying the supplier for an already-made product (dropshipping) or promoting products you’ve not handled yourself in some other cases.
- Profit margins are slim: Stiff competition drives prices down as many sellers compete to win the Buy Box.
Common Pitfalls to Avoid When Selling With Zero Inventory on Amazon
Many sellers hear how easy it is to sell on Amazon without an inventory and rush in without proper groundwork. Take extra steps to avoid new sellers’ common mistakes and easily stand out.
Not Adhering to Amazon Policies
Amazon has policies for dropshipping, product promotion, selling merch, and selling virtual products.
Slow down to review the guidelines for your chosen Amazon business model to ensure that your account isn’t taken down in the middle of business.
For instance, Amazon Associates and Influencers must be forthcoming about their status (and that they’ll earn commissions from conversions) to their audience, among other things.
Not Ordering Test Samples
Since the best way to test a product’s quality is to use it yourself, order test samples from a few suppliers before deciding which one to partner. This is best when you’re drop shipping, but you can do the same if you choose the Amazon Influencer program.
That way, you can confidently promote the product without fear of sending poor items to your customers or audience.
Not Customizing Product Packages
This advice is more applicable to sellers interested in dropshipping and POD.
If you place your logo on products and customize the packaging, customers will associate those products with you. So, they’ll try to buy from you again or recommend your products to others if it’s good.
Not Tracking Supplier Inventory Levels
Since you’re not holding any product inventory, carefully track the supplier’s inventory levels so you know when to mark a product as out of stock. If not, you will end up listing unavailable products and canceling orders, adversely affecting your seller metrics and chances of winning the Buy Box.
Frequently Asked Questions (FAQs)
How Do I Sell Other Companies’ Products on Amazon?
You can sell other companies’ products on Amazon via dropshipping, arbitrage, affiliate marketing, or the Amazon Influencer program. Of these, dropshipping and Amazon Associates/Influencer Program also allow you to sell products without any inventory.
Do You Need Amazon Seller Tools to Sell Without Inventory?
You don’t need Amazon seller tools to sell products without inventory.
However, seller tools such as Spocket and Pretty Merch make selling on Amazon without FBA inventory much more effortless and increase your chances of success.
Sell Without Inventory on Amazon Today
It’s not difficult to start selling on Amazon without inventory. You just need to set up the proper accounts and connect with suitable suppliers or find/create the right products, and you’re good to go.
Remember that the right Amazon seller tools will significantly increase your brand’s chances of success. So, sign up for Jungle Scout (discounts here) or Spocket (check discounts) to find the best dropshipping suppliers, use Pretty Merch (check savings) to research trending and bestselling merch designs, or grab Helium 10 (discounts here) for Amazon KDP success.
