With over 1.6 billion websites online, starting a new one can be daunting. Especially if you want to start a new business venture like an online store.

And what if you want to sell products online? What if you don’t have the money, or room, to invest in products to keep lying around the house? What are your options? Well, there are some examples you can draw inspiration from. Some of them are mentioned below.

• Uber, for example, is the largest taxi service worldwide – still, the company doesn’t physically own these cars.
• Facebook is the most popular and renowned media platform in the world – still, the company doesn’t produce and own the content.
• Airbnb is the most successful rent company across the globe – still, the company doesn’t build or own real estate.
• Alibaba is the online retail platform that is recognized as one of the top 10 most valuable and biggest companies in the world – still, the company doesn’t keep any stocks.

It is possible to sell products online without stocking any inventory, and it will be a fair business, not a fraud. The main thing is to choose the right business model: this decision can take you to the heights you have never dreamed about.

After researching how to run an online business with no inventory, many online entrepreneurs come up with their own ideas that make your life much easier. Starting your store with nothing to lose – doesn’t it sound great?

In this article, we’ll discuss some of the tried and true methods for selling products online without inventory. And, some of these methods require a very low, or no fee for your startup.

• How do I Create an Online Store Without Inventory?
• How can I Start Selling Online With no Money?
• Can I Sell on Amazon Without Inventory?
• How do you Manage an Online Store?

How do I Create an Online Store Without Inventory?

Launching an affiliate store

This method of selling products without keeping stock is quite popular due to its simplicity. With affiliate marketing, you promote other entrepreneurs’ products and get your commission fee if the people you’ve reached actually buy these products.

Read Also: How to Start an Online Store That Drives Sales in 2021

Many renowned large-scale companies have their own affiliate programs. You can choose the one that suits you the most, or join several programs to promote their goods on various resources.

You can promote products through your website, email list, social media, or blog.  However, you need to study the rules before joining any program because some of them prohibit to use email marketing.

The commission rates are set by the companies offering the affiliate program. The major trouble of this method is very low income. You can hardly make your living with it due to low fees, so it can be just a supporting source of passive income.

Employing print-on-demand services

This business model means selling print-on-demand products. You can sell t-shirts, tote bags, hats, keychains, cups, mugs, home decor products, and lots of similar items.

You connect your online store to some print-on-demand service and design your own custom clothing and accessories. When you sell something from your shop, you take money from your customer and send the order directly to the print-on-demand service.

They print the products ordered, charge you for them (including shipping costs), and deliver the products directly to your customer. You get your income by charging your customers however much you want to make.

This option is good if you want to sell these kinds of items. You can even focus on building your own brand. But building a brand that can stand out from the competition is not an easy task as this niche is, on the one hand, too narrow, and on the other, quite popular.

One of the most crucial downsides of this business is that you need to have really good design skills, otherwise you should outsource that part of the work, and it will significantly reduce your profit.

Digital products or services

What other options do you have if you wonder how to start an online store without inventory? You can run a business that is dedicated to creating and selling digital products or providing services.

There are lots of things to sell online with no inventory: eBooks, software, music, videos, photos, some courses and training, and what not. As for the list of possible services, it can be even longer. The most demanded are graphic and web design, copywriting, translations, legal, IT or HR consultations, coaching, language teaching, search engine optimization, and many other services.

But it doesn’t solve the problem of resources. You need to get a digital product first, and only then you can offer it to your potential customers.

And if you create some products yourself or provide services online, it can be even more complicated. You convert your time and energy into money, and it makes no great difference between a usual 9 to 5 job except that you’re sitting a sofa instead of an office chair.

Use 3PL/FBA

Strictly speaking, this model is not traded without inventory – it just trades without warehousing. It’s very similar to a traditional online store: the only exception is that you don’t have to worry about inventory storage and order delivery.

3PL is a third-party logistics company. Most 3PLs handle the storage of your products and fulfill orders. Sometimes they even provide customer support and product returns.

The process is the following: you ship your goods to the 3PL provider. When you get an order from a customer, you send it to the 3PL. The 3PL ships the order to your customer. You pay the provider a monthly fee and a per order cost for fulfillment.

FBA stands for fulfillment by Amazon and works in a similar way. But it seems to have more risks than benefits. But fbamasterclass can be a great help if you are looking for some guidance to build a thriving Amazon FBA business. Amazon takes a significant part in your revenues. They strictly regulate the business. They can hold your money for any reason. They can ban you or shut you down at any time. And the competition there is enormous.

To sum up, you don’t have to store any inventory and deliver orders yourself, and your margins can be rather high. But this model cannot be truly called a business without stock since you still have to purchase your goods upfront, and this not what we are looking for.

Dropshipping

The typical dropshipping cycle looks like this: a customer orders some products on your website. You send the order details to your wholesale supplier. The supplier ships the products directly to the customer.

Do you feel the difference? You do not have to pay for the products until you’ve got an order. You do not have to store the products. And you do not have to send them anywhere. It means that dropshipping is a true example of an online business without inventory.

Using the dropshipping model, anyone can run their own online shop without holding any inventory or spending a lot of money. If you run your dropshipping business with such a giant as AliExpress, you can have additional profit from their cashback.

And if all the processes in your dropshipping online store are automated with special tools, your chances to success increase many times!

And if you can find a supplier with very low prices, this online business can be very profitable as you can set any margin you wish. So, this model is perfect for those who want to have an online business with a large number of sales, but don’t want to spend money on buying inventory.

What other benefits does dropshipping have?

• You can focus your efforts on marketing and customer service
• Your product range is not limited in quality and quantity
• You’ll never run out of stock or face surplus of undemanded goods

Of course, some aspects should be given special priority. You should select the niche with a high potential. You should be careful when choosing suppliers. You should decide on your pricing strategy.

But all these things are much easier to manage when you’re not worrying about paying warehouse rent, seeking money to purchase goods, and organizing delivery.

How can I Start Selling Online With no Money?

The internet today has made it easy for online buying and selling, as a business person you can even start selling online with little or no money.

In order to stay in tune with the trend of the present days, many retail stores are looking forward to moving their business online. In order to be successful, an eCommerce business needs a proper blend of the right ingredients.

Here are 4 easy steps to start your online retail business from scratch even when you don’t have money.

Build A Business Plan And Model

As much as one needs a business plan to set up a brick and mortar store, a proper business model and planning is needed to set up an eCommerce store as well. Without robust planning, chances of failure are extreme and in today’s cut-throat competition, walking out unprepared is a risk that one should not take.

Choose Your Products To Sell Online

The choice of products plays a crucial role in determining the structure, benefits and long term success of your online business. Basically, your products can be anything that ranges across different categories. You could focus on a single product line or else, expand into multiple lines, depending on your budget and resources.

Build An eCommerce Website In 5 Minutes

There are many online tools available, including Shiprocket 360, which makes it easy for you to set up your eStore in few minutes and you can start selling your products online instantly. Because of the availability of such tools, the process of building online stores is as simple as creating a Facebook account today.

Upload Your Products And Start Selling

Once your online store has been set up, you can upload your product details and start selling online. For better results, you would require a proper online marketing strategy to stay a step ahead of the competition.

Planning an eCommerce business is not as difficult, as it is to implement and operate. With a variety of resources and information available at your disposal, you can take up the planning process anytime.

It is the implementation that takes time and effort. If you have planned to take your retail outlet to an online place, it is very important to decide certain things in advance, to minimize the chances of losses.

• Decide in advance who will be your target customer and what will be the scale of your operations. You could choose to ship domestically, nationally or internationally, depending on the availability of resources and scope.
• Prepare stocks of goods that you intend to sell online. Getting your online resources available will not be a hard thing to complete but at first, you should be equipped with the required products that can be sold and shipped as soon as a customer places an order.
• Get into talks with your shipping partners and decide the rates which will be charged and paid by you for shipping different quantities of products. This will help you in enhancing the overall customer experience of shopping with you.

In order to be successful with your online business, it is very important that you take a clear view of the operations that you will be required to handle as your eCommerce business runs.

Only if you are prepared with the necessary information and resources in advance, will you be able to keep up with the demands of your business and customers. You can take the example of various successful eCommerce businesses that are running every day and servicing their customers in the most satisfactory manner possible.

Can I Sell on Amazon Without Inventory?

Most people who want to start an online business are hesitant to sell physical products online because they have a false impression that you have to store and ship all of your own products.

But did you know that you can run a successful eCommerce business without carrying any inventory at all? In fact, it’s pretty straightforward to run a full-blown online store without worrying about storing or shipping anything physical at all.

Use Dropshipping

A dropshipped online store is a type of eCommerce business where you take orders on your own website, but your vendor or distributor is responsible for shipping the product to the end customer.

As a result, you don’t have to carry any inventory at all. You simply act as a middle man between the distributor and the buyer.

Here’s how it works.

• A customer finds your website online and places an order
• You receive the money from the customer and immediately place an order with your distributor at an agreed-upon wholesale price.
• The distributor sends the product to the end customer with YOUR company branding and logo. As a result, it appears as if the product is coming from YOU and not the vendor

Sounds simple right? But as with everything in life, there are pros and cons to this business model.

Pros

• You don’t have to carry inventory or ship out any orders yourself
• The startup costs are really low. There are no upfront costs for inventory. You simply need a website and can start taking orders right away
• The overall risk is negligible.

Cons

• The margins are usually super low (on the order of 10-30%)
• Managing customer service can be a pain since you have no control over the fulfillment
• Your advertising options are limited because the margins are low.
• There will be many other stores selling the exact same products which will cause pricing pressure.
• The ramp-up to significant money will be much longer than a traditional store because margins are low.
• You will likely have to rely on SEO and other free methods of promotion.
• Customers may need to be shipped separate packages if different dropship vendors are used on your store
• You need to connect to your vendor’s database to determine inventory levels
• You are responsible for driving traffic to your own website

Overall, dropshipping can be very attractive if you don’t have a lot of money and if you plan on having a long time horizon for your business. In other words, it could take several years for your store to ramp up to significant profitability.

To find vendors who are willing to dropship in the United States, you can use a service like Worldwide Brands but be prepared to put out a lot of content to rank your store in the search engines.

You Can Use A 3PL

For those of you who are unfamiliar with the terminology, a 3PL is a 3rd party logistics company. Most 3PL services can handle the storage of your products in addition to order fulfillment. And in some cases, they can even help with customer support and product returns.

Here’s what a typical order flow looks like if you use a 3PL

• You ship all of your products to the 3PL provider
• A customer places an order on your website
• Your website sends the order to the 3PL
• The 3PL ships the order to the end customer.
• You pay the 3PL a monthly fee in addition to a per order cost for fulfillment.

The online store/3PL combo looks and behaves very much like a traditional online store with inventory except that you don’t have to store or fulfill the orders yourself.

Pros

• You don’t have to store any inventory or ship out orders yourself.
• You have full control over your customer flow.
• Your margins are usually 50% or higher which gives you more flexibility on advertising

Cons

• You have to purchase your goods up front
• You are responsible for driving traffic to your own website

Overall, if you want to start a more traditional online store but don’t want to worry about inventory or fulfillment, then using a 3PL might be a good option for you.

Here’s a list of 3PLs to consider if you decide to go this route along with what to look for in a good logistics partner.

• ShipWire.com – Probably the easiest way to get started. However, they will not take any special packaging requirements. Basically a no frills fulfillment service.
• EFulfillmentService.com – A no frills fulfillment house that caters to small businesses. They don’t need for you to have a corp or LLC in the United States. Generally easy to work with.
• ShipMyOrders.com – A fulfillment service very similar to EFulfillmentService.com. They cater to small businesses. There is no minimum on monthly transactions
• WarehousingAndFulfillment.com – A fulfillment service very similar to EFulfillmentService.com catering to small-med businesses.
• InFifthGear.com > 300 packages/month – These guys can take on high touch products. For example, they can do personalization, engraving etc… But they generally are only interested in shops that can generate at least 300 orders/month.
• 3plsolutions.co.uk – An option for that shipping in the UK
• Direct-Outbound.com – A fulfillment service catering to small-large businesses.
• At Last – These guys tend to cater to larger shops but you might still want to talk with them.
• AliveFulfillment.com – Integrates nicely with Shopify

Amazon FBA

Right now, Amazon FBA is the most popular choice among online sellers. Amazon FBA stands for “Fulfillment By Amazon” and here’s how it works.

• You ship your goods to Amazon’s warehouse
• You list your products on the Amazon marketplace
• A customer places an order on Amazon
• Amazon handles storage, fulfillment and all of your customer support

Going the Amazon FBA route is extremely attractive because not only does Amazon take care of EVERYTHING, but you also have access to Amazon’s vast audience of buyers.

However, the main downside is that you have to obey Amazon’s rules and they also take a pretty sizable chunk of your profits. In addition, it’s much harder to establish your brand on Amazon because people think that they are buying from Amazon and not you.

Overall, here are the pros and cons

Pros

• Once you ship your products to Amazon, you don’t have to do anything else. Amazon takes care of sales, shipping, returns and customer service
• Amazon’s marketplace is so large that you will likely generate sales right away

Cons

• Amazon takes a sizeable chunk of your sales. (15% of your revenues + 10-15% for fulfillment depending on your product)
• You have to purchase your products upfront
• Your margins must be high to make money because Amazon takes such a large chunk of your sales. (Margins should be > 66% which means you will likely need to import from overseas).
• You have to obey Amazon’s rules
• You only get paid every month. Amazon can hold your money for any reason.
• You have to constantly monitor your listings from the competition
• Amazon can ban you at any time
• It’s hard to establish your brand because you are building your house on someone else’s property

The Amazon marketplace is so large that you definitely should be selling on Amazon at some point.

But selling on Amazon can also be extremely stressful as well. Because the Amazon platform is super competitive, you have to constantly monitor your products in case they get piggybacked or hijacked

In addition, there’s also the danger of getting inexplicably banned or shut down in case you get too many customer complaints.

How do you Manage an Online Store?

Setting up an online store is easy once you’ve decided what you’re going to sell and how. Then, all that’s left is for you to manage the day-to-day. Here are some handy tips that will help you maximize the effectiveness of your eCommerce store

Outsource order fulfillment

Once your online store is up and running and you’ve got customers through the door, you’re not going to want to waste time buying and storing inventory, packaging everything up, and lugging it to the post office.

You may not have space if nothing else! For this reason, a lot of e-store owners choose to work with a reliable dropshipping merchant to handle the order fulfillment side of their operation for them.

A dropshipper stores inventory takes care of all your postage and packaging and will apply your own branding to the packaging so that to the customer, it looks like the order has come from you.

When you receive orders through your website, you simply pass them onto your dropshipping supplier who will handle them for you. Your total profit will be whatever the customer pays minus the cost quoted by your dropshipping supplier.

Customers are impatient people and they want their orders shipped swiftly and safely. By outsourcing this side of your business to a professional, you are saving yourself time and hassle and ensuring that customers get their orders promptly.

Send abandoned cart emails

Sometimes, an online user will abandon a shopping cart without completing their purchase. Even with website testing, it can sometimes be hard to figure out why this is happening (though it is still worth testing to see if it’s an easy fix).

It may be that they simply ran out of time, or realized they didn’t have their credit card with them. Whatever the reason, it is worth setting up abandoned cart emails to remind the customer of the item in their shopping basket.

It could be that they were planning on buying the item at a later date and forgot, in which case your email reminder could send them back to complete the purchase. If you don’t remind them, you will never know.

If you find that you’re getting a lot of users abandoning their shopping carts, then it is definitely worth looking into your website analytics and carrying out some testing to see what’s causing it.

If your payment process is too long-winded, requires lots of form-fills or there are hidden fees that pop up at the last minute, these could be putting your customers off at the final stage.

Use a helpdesk or live chat function

There’s one thing that you really don’t want to scrimp on when you’re running an online store, and that’s providing adequate customer support. Luckily, there are increasingly innovative ways to connect with your customers so that they feel heard and get their issues resolved – should they have any.

Using this LiveAgent help desk software – an app that integrates seamlessly with Shopify – you can optimize customer satisfaction, sales and conversions by placing a live chat button on your store. It’s simple, affordable and a great way to build trust and create loyal customers.

Don’t ignore data

Data can be confusing, but you shouldn’t ignore it. It’s important for the little guys, as well as for big businesses. It can help to tell you what’s working and what’s not, who your audience are, when they like to shop, what their buying habits are, how they reach your site and which of your products are the most successful.

Today’s eCommerce platforms are very good at providing us with all of the insights we need to assess and improve our stores so that we can make adjustments accordingly.

Assessing the data surrounding overall shopping trends as well as how users behave on our own sites can help to inform future decisions, such as what products to add in the future, which to stop selling because they don’t perform, and what aspects users find appealing when it comes to presentation and usability.

Find a good analytics solution that will integrate with your choice of CMS platform and allow you to get the most out of your data, improve your eCommerce store for the better and help you to foresee future shopping trends in your chosen niche.

Embrace social media

Today’s customers expect more from their favorite brands. As well as providing great products and seamless online shopping experience, customers are increasingly drawn to brands that humanize themselves by reaching out on social media.

Where it used to be a trendy but optional addition to one’s marketing strategy, it is now considered an essential marketing channel and if you want to do well online, you should embrace it.

It is worth signing up to every social media channel under your brand, even if you don’t plan on using all of them. This stops any other users from piggybacking your brand on channels you’ve missed.

The best platforms to make use of on a regular basis include Facebook, Twitter, Instagram, and Pinterest – the second two are particularly good for image posts. Once you have these accounts, be sure to include ‘follow’ and ‘share’ buttons on your website pages so that users can easily spread the word.

Read Also: How are Online Marketplaces Generating Profit?

Social media is an ideal place to share news, special offers, updates and behind-the-scenes posts, as well as to introduce interaction from customers. The key is to be social – hence the name.

Get personal

One thing that social media does is create a more personal experience for users. This is a really important aspect of selling online. People will always prefer to think they are buying from a person who really knows their stuff and takes care of their customers, rather than a faceless chain store.

Personalizing your customer experience will reap great rewards when it comes to sales. Personal touches like relevant ads and offers based on previous browsing behavior, thank you emails, notes included in with delivery and shout-outs on social media are great ways of showing your customers some love.

This is where little online stores have an advantage over big companies like Amazon with their millions of customers – so if you have the time to reach out personally, always take it.

Finally

As we have seen from all the above information, it is very possible to start an online store without an inventory. That means you don’t really need a lot of money to start an online store.

Just follow the needed tips mentioned in this article and put in the work required.