Dropshipping on Amazon Archives

How To Sell On Amazon Without Inventory

Starting an Amazon business can be highly lucrative, but one of the downsides to selling on Amazon is needing space to store the products you sell.

As your business expands, so do the requirements for space. The need to streamline the process of getting products shipped to customers.

In this post, I will explain how to sell on Amazon without inventory and the different ways to run an Amazon store that require little-to-no involvement with actual physical inventory.

Amazon FBA

FBA stands for Fulfilment By Amazon.

FBA is the process of selling and shipping products through the Amazon platform. It is the most popular way of running an Amazon business with 96% of sellers choosing the FBA business model.

How does FBA work?

The seller sends all inventory directly to the Amazon Fulfillment centers, and then Amazon handles all aspects of selling, storage, and shipment for you.

This allows sellers to focus on the more important aspect of the business, like sourcing more products to sell and launching them to increase their profits.

The Pros Of Selling With Amazon FBA

There are many benefits of running an Amazon FBA Business, here are some of them:

You’re able to sell private-label products online without having to hold any inventory yourself.
Amazon will keep your products in their Amazon fulfillment centers and send them out to the customer as soon as they order.
Over 200 Million customers are searching for products on Amazon per month. The FBA business model allows you to take a slice of the very large pie that already exists.
Amazon FBA requires very little time commitment after the initial setup, making it perfect for those just getting started with online businesses.
You can access powerful analytics tools to track the performance of your products.

The Cons Of Selling With Amazon FBA

Selling with Amazon FBA is a great way to generate passive income, but it doesn’t come without its problems:

FBA is a competitive business model, but there are many great FBA courses that can guide you to get an advantage over the competition
Starting an FBA business can require a high financial investment in wholesale quantities of inventory.
You are not in control of the customer service experience for your products (although the FBA experience tends to be world-class)
You may find it difficult to differentiate yourself from other sellers on Amazon.

Dropshipping

Dropshipping is a business model where the seller doesn’t actually hold any inventory, but instead uses a third-party supplier to ship products directly to the customer.

Dropshipping is the best way to sell on Amazon without inventory. Not only do you not need to store inventory – you don’t even need to own any!

How Does Dropshipping Work?

You simply act as the middleman between your customers and the supplier who stocks the product.

Once a customer places an order on your Amazon store, you then forward the order to your supplier who will then send the product directly to the customer.

The Pros Of Dropshipping

• No need to purchase or store any inventory.

• Can offer a wide variety of products without investing in additional storage space or staff.

• You don’t need to worry about shipping or packaging orders.

• You can focus more on marketing and growing your sales rather than managing the day-to-day operations.

• Overhead costs are much lower as there is no need for additional storage space.

The Cons Of Dropshipping

• Less control over the quality of the products being shipped as you are relying on a third-party supplier.

• Highly competitive business model, so you may have lower profit margins in order to compete.

• The customer service experience is out of your hands and any issues relating to delivery or product quality must be handled by the supplier.

• There may be delays in getting orders processed

Use Third-Party Logistics Companies

Third-Party Logistics (3PL) companies are businesses that provide outsourced services such as warehousing, inventory management, and order fulfillment.

Essentially, A third-party logistics company would offer the same service as Amazon FBA.

3PLs help sellers save time, money, and resources by managing the shipping process for them and are a great way to sell on Amazon without inventory.

For some sellers, using a 3PL may not make the most sense. Amazon FBA could offer the same service, but more efficiently run and cost-effective for sellers.

Not to mention that a 3PL wouldn’t be able to offer the same next-day delivery service as FBA would to Prime members.

The best time to consider working with a 3PL is when you are a new seller. Especially a new seller who wants to increase their storage capacity during sales events, like Black Friday or Prime Day.

Sellers can add the FBM (Fulfill By Merchant) option to the product listing, and be able to offer higher qualities of products to allow for an increase in sales during the sales event.

The Pros Of Using 3PLs

Much like Amazon FBA, working with a Third-party Logistics company is a great way to run a passive Amazon business. Here are some of the benefits of working with a 3PL:

• No need to manage or store any inventory.

• Access competitive rates without having to pay for additional staff or storage space.

• Increased flexibility in terms of pricing. You won’t be paying for shipping costs upfront or storing your own products.

• You can focus on marketing and growing your business, rather than managing the day-to-day operations.

• You have access to powerful analytics tools to track performance and inventory levels.

• Scale quickly without having to invest in additional staff or storage space.

The Cons Of Using 3PLs

The downside to working with third-party inventory solutions is that Amazon already provides a world-class solution. This is very difficult to compete with.

Here are some of the other cons to working with a 3PL:

• You may not have as much control over customer service as you would if you were handling all of the processes yourself.

• Certain 3PL companies may require minimum orders, which could limit your ability to manage costs effectively.

• There is a risk that something may go wrong with the order fulfillment process and it’s out of your hands if it does.

Sell Digital Products

Selling digital products is the ultimate answer to “how to sell on Amazon without inventory”. Technically, your product doesn’t ‘physically” exist!

Digital products are any type of product that is available in digital forms, such as ebooks, video lessons, software programs, music downloads, etc.

Selling digital products is an attractive option for those who want to know how to sell on Amazon without inventory. It eliminates the need to purchase or store any physical inventory.

The Pros Of Selling Digital Products

• You don’t need to worry about shipping or packaging orders.

• You have access to a global market since you can easily deliver your product digitally in any corner of the world.

• No need to manage returns or defective products. You are simply delivering information rather than a physical product.

• You don’t need to worry about buying or storing any inventory, which reduces overhead costs.

• You can easily scale up your product offering without having to invest in additional storage space or staff.

The Cons Of Selling Digital Products

• Margins may be tight since customers are used to paying significantly less for digital products than physical ones.

• You will have to deal with digital theft, as it is easy for customers to copy and distribute your work without permission.

• There is a risk that the customer may not be satisfied with the product, which could lead to negative reviews or refunds.

• It can take time and resources to create high-quality digital products,

How To Get Started Selling On Amazon

Whether you decided to sell on Amazon leveraging the FBA model, or sell digital products, the process is similar in regards to set up.

If you’re a complete newbie and need some guidance on:

how to start an Amazon store,
how to source products,
how to launch your brand,
and how to scale your business,

Viral Launch has an incredible FREE course that will show you how to do all of these tasks and more:

In Summary

Hopefully, this post has shown you 4 ways how to sell on Amazon without inventory.

Selling on Amazon without inventory can be a great way to start or expand your business.

There are several options available, such as dropshipping, using third-party logistics companies, and selling digital products.

Each of these methods has its own pros and cons. It’s important to carefully consider which one is right for you before taking the plunge.

No matter what option you choose, with the right strategy in place, you can find success selling on Amazon without investing in any inventory.

How to Dropship on Amazon in 2023

If you’re looking to start a successful eCommerce business in 2023, then you’ll want to consider learning how to dropship on Amazon.

Drop shipping can be a very lucrative business model, and with low start-up costs and very few overheads, you can see why entrepreneurs are seeing big returns for small input.

In this article, we’ll teach you everything you need to know about how to dropship on Amazon, including what drop shipping is, how it works, and how you can scale your business to great heights by leveraging the right tools.

What Is Amazon Dropshipping?

Drop shipping is a business model where you don’t have to keep any inventory. You simply act as the middleman between your customers and the supplier who stocks the product.

Whenever you receive an order from a customer, you place the same order with your supplier, and they will ship it directly to your customer.

Here Is How To Dropship On Amazon:

You (the entrepreneur) source a product to sell
You then find a supplier for the product
You list the product on Amazon
The Amazon customer purchases your product on Amazon
You then purchase from the supplier and get them to send it directly to the customer’s address.

It’s all about positioning yourself as the middle person so you’ll never have to invest in large quantities of stock, pay storage fees, or ship container loads of inventory to Amazon fulfillment centers.

The Different Types Of Dropshipping:

When it comes to dropshipping on Amazon, there are a few different types you’ll need to be aware of:

Private label Amazon dropshipping – this is when you source a product from a supplier (usually in China), then customize and brand it with your own logo. You can then list the product on Amazon as your own branded product.

Retail arbitrage Amazon dropshipping – this is where you source products from retail stores, then list them at a markup on Amazon. When an order comes in, you purchase the product from the store and have it shipped directly to your customer.

Wholesale Amazon dropshipping – this involves finding wholesalers who offer large discounts on products. You’ll then list them on Amazon and take orders from customers. When you get an order, you purchase the product from the wholesaler in bulk and they ship directly to your customer.

Print-on-demand Amazon dropshipping – print-on-demand services allow you to list your own designs or artwork on products such as t-shirts, mugs, or phone cases. You don’t need to buy any inventory upfront and only pay for the product when an order comes in.

Is Amazon DropShipping Profitable?

Yes, Amazon drop shipping is still a viable business model that can generate significant profits.

The great thing about dropshipping on Amazon is that there are no upfront costs and the overhead expenses are minimal: all you need to get started is to source a product and list it on the platform.

How Does Amazon Dropshipping Compare To Other Amazon Business Models?

Dropshipping on Amazon is just one of many different ways to start an online store. Each model has its own advantages and disadvantages.

For example, with dropshipping, you have low start-up costs as you don’t need to purchase any inventory upfront. However, the margins are usually small and it can be hard to scale a business quickly due to the limited selection of products available.

Other popular ways to sell products on Amazon are Amazon FBA Private Label, Wholesale, Online Arbitrage, Bookselling, and Handmade.

What Are The Pros and Cons Of Amazon Dropshipping?

The pros of Amazon dropshipping include:

Low start-up costs – you don’t need to purchase any inventory upfront, making it a great choice for entrepreneurs who are just getting started.
You can offer a wide selection of products – you can source products from anywhere in the world, giving you access to a much wider selection than you’d be able to find in a physical store.
No need for storage space – since you don’t need to buy any inventory upfront, you don’t have to worry about finding a place to store it.

The cons of Amazon dropshipping include:

Lower profit margins – since you’re not buying the product in bulk, you’ll have to charge a higher price to make a profit, which can make it difficult to compete with other sellers.
Risk of counterfeit products – since you’re sourcing from third-party suppliers, there is a risk that some of the products could be counterfeit or low quality.

How Much Does Dropshipping On Amazon Cost?

The cost to dropship on Amazon will vary depending on your product and supplier, but generally, you can expect to pay for the following:

Shipping costs – if you’re using a third-party supplier, you’ll need to pay for the cost of shipping the product to your customer.
Amazon fees – Amazon will take up to 15% of every sale as their fee.
Advertising costs – if you want to get more sales on Amazon, you’ll need to invest in advertising campaigns such as Amazon PPC or sponsored products.
Platform fees – depending on which platform you’re using to manage your drop shipping business, there may be an additional fee associated with it.

Unlike private label and wholesaling, a dropshipping business doesn’t require you to invest in or hold any inventory of your own.

Instead, when the consumer pays for their purchase from your store, use a portion of the proceeds to buy that product from a supplier and have them send it directly to the buyer.

This drastically reduces your start-up costs and overheads, making Amazon Dropshipping one of the most cost-effective ways to get started selling products online.

Here is a list of things that you should invest in to run your eCommerce store efficiently:

Amazon professional seller account – $39.99 per month
Product samples from your chosen supplier
Amazon Pay Per Click (PPC) advertising
Viral Launch for product discovery, optimizing listings, finding the best-converting keywords, and PPC management

Typically, the average dropshipping profit margins are between 10-30%, depending on the product.

Which, for a relatively passive income is very good!

How To Dropship On Amazon

Now that you know a little more about the business model, he is the steps you need to take to learn how to dropship on Amazon.

Step 1 – Set Up An Amazon Seller Central Account

There are two options when it comes to selling on Amazon – you can use the individual seller Amazon account or the professional seller Amazon account.

Each has its own advantages, but the professional plan is best if you want to dropship products on Amazon as it will allow you access to their full PPC tools, run promotions, and create bulk listings easier.

The professional seller account has a capped fee of $39.99 regardless of how many products you sell, whereas the individual seller account charges a $.0.99 fee per unit.

Step 2 – Finding Products To Sell

This step is the most vital part of starting your online store, and it’s crucial you get it right.

Viral-Launch has made it much easier to find high-demand, low-competition products to start selling by leveraging the Product Discovery tool.

If you’re unsure how to get the most out of this tool, there are two tutorial videos on the Product Discovery tool page, showing you how to get the most of out it.

But in order to find the high-demand, low-competition products, I would recommend starting your product search off with the following criteria in the KEYWORD tab:

Price range between $40-$100
Minimum monthly sales of 500>
At least 300 reviews

To avoid any complications with restricted products or products with any other limitations that could slow your growth, I would recommend sticking to the 5 main categories that sell very:

Baby
Sports & Outdoors
Home & Kitchen
Pets
Garden & Outdoor

Once you enter these details into the Product Discovery tool, you will be given a list of potential product ideas, with a star rating Idea Score, along with the product’s average revenue and sales velocity.

The top product idea that came up from my very basic search was products for running.

I would then click the button below the product keyword and head to the Viral-Launch Market Intelligence page:

Viral-Launch Market Intelligence provides me with a deep analysis of all the product ideas within the Running keyword and gives them a more detailed idea score star rating:

These tools will give you a huge advantage in finding the best products to start your Amazon dropshipping business.

Step 3 – Finding Products To Sell On Your Amazon Store

Once you have a list of viable product ideas, you then need to focus on finding a supplier.

The first place to start would be AliExpress, as they offer a wide range of products and have thousands of suppliers all around the world.

When looking for new suppliers, you should focus on finding those that can create custom branding for your product packaging and labels. This way, you will be able to make your brand stand out from the competition.

Once you have narrowed down your list of suppliers, you should make sure to ask them for samples. This way, you can assess the quality of their products before committing to a large order.

Also, make sure to read the reviews and check out the ratings of any supplier you are considering working with – this will give you an insight into the quality of their products and customer service.

Step 4 – Create Your Listings On Amazon

Once you have chosen your supplier, it’s time to create your product listings in Amazon Seller Central, or you can also build your listing in the Listing Builder tool.

You will need to gather the following information for each listing:

A product title,
Images,
Bullet points,
Descriptions,
Pricing

Product Title

The key factors that Amazon considers when ranking products are the keywords in the product title, sales velocity, and the number of positive reviews.

So the best place to start would be finding the best keywords for your product title, and the rest of your listing.

The Viral Launch Keyword Research tool will help you find the most powerful keywords for both your Product Title and Product Description.

The product title should be structured in a way that the strongest keyword for your product, is at the very start of your title.

Product Images

The product photos on your listing are a great way to increase sales by showing customers the main features of your product.

The images should be 1000×1000 pixels and you should use all photo slots on your listing.

If you’re unable to take great photos yourself, you can always ask your supplier to provide you with high-resolution photos of your product.

Product Bullet Points

The product bullet points are the second most important part of the text on your Amazon product listing, after your product title, so they should be keyword rich.

Product bullet points are the best opportunity to tell your customers how purchasing your product will benefit them and solve their problems.

Product Description

The product description should summarize all the features and benefits of your product that you mentioned in the bullet points section, as well as any important information about how to use it. You can create amazing product descriptions using online AI Tools.

Pricing

Finally, you need to set a price for your product that will be competitive enough to generate sales without leaving too much margin on the table.

The Viral Launch Pricing tool will help you find the right price for your products by analyzing your competition and calculating the optimal price point.

Tips For Success In Your Amazon Dropshipping Business

Running a successful dropshipping business on Amazon can be a daunting task, so here are some tips to make sure you get the ball rolling.

1. Promote Your Listings

Running PPC Amazon ads will massively boost your exposure to your product listing, will increase your organic ranking for your chosen keywords, and will drastically increase your sales.

2. Set Up Your Storefront Properly

Make sure to create an attractive storefront with all of your product listings and images in place. This will give customers the chance to shop with ease, and it will also make a great first impression.

3. Utilize Social Media & Advertising

Social media is a great way to get the word out about your business and attract new customers.

You can post about sales, discounts, promotions, and other news related to your business on social media platforms like TikTok, Facebook, Instagram, and Twitter.

You can also create ads on different platforms to promote your products and direct customers to your store. And more over, you can find your competitor ads & can create your ads better than them.

4. Monitor Your Products & Pricing

Make sure you keep an eye on competitor prices and adjust yours accordingly if needed – this will help you stay competitive and maximize profit margins for each product.

5. Offer Excellent Customer Service

Providing excellent customer service is an essential part of running a successful dropshipping business on Amazon.

Make sure you provide prompt and courteous responses to customer inquiries, as well as handle any product returns or refunds in a timely manner.

Round Up Of How To Dropship On Amazon

Hopefully, this post provides you with a clearer view of how to dropship on Amazon.

Dropshipping on Amazon is a great way to start an online business and make money without having to manage inventory or handle shipping.

The key to success in dropshipping on Amazon lies in:

Sourcing the right products
Finding great suppliers
Optimizing your product listing,
Use the right keywords for your title and description,
Creating attractive product images and bullet points,
Setting a competitive price,
and providing excellent customer service.

By following these tips, you can increase your chances of success in selling products on Amazon as a dropshipper.

How To Dropship On Amazon FAQs

Who handles processing customer returns with Amazon Dropshipping?

The return policy is the same for anything you sell on Amazon.

Although, unlike the FBA business model – You as the seller will be responsible for the returns, not Amazon. The returns will need to be sent back to your location.

What are the upfront investments required?

Dropshipping on Amazon is a very low barrier to entry with regard to start-up costs. You would need to invest in:

– Amazon professional account – $39.99 per month
– Product samples from your chosen supplier
– Amazon Pay Per Click (PPC) advertising
– Viral Launch for product discovery, optimizing listings, finding the best-converting keywords, and PPC management

Do I need an LLC to start Amazon dropshipping?

No you don’t have to start an LLC to drop ship on Amazon, although it will be a good idea to set one up as your own eCommerce store grows in revenue.

Will the supplier send products in branded packaging?

Sending your products with branded packaging is something that I would highly recommend asking your supplier to work with you on.

I would also advise working with your supplier to create packing slips and inserts into your packaging with information on other products and offers.

Something that Amazon prohibits, is the dropshipping model of online arbitrage where you purchase products individually from other online retailers like Walmart and sell them on Amazon and the product arrives to the customer in Walmart packaging.

Do I need a professional amazon seller account?

It’s not essential to have a professional seller account, but you will experience far fewer limitations when you invest in a professional seller amazon account.