You don’t always need to have products on‑hand to start a business. Learn how to start an online store without inventory in this guide.
If you have an entrepreneurial spirit, you might wonder how to create an online store without inventory. Believe it or not, you don't need inventory to start an online business, even one where you sell products. Starting an online store without inventory may seem impossible. After all, e-commerce businesses must have inventory to ship to customers, right? Not necessarily.
To sell products online without inventory, you must know how to sell a product online and build an online store. However, selling products online with inventory leaves you more limited in your options.
You don't need a warehouse, inventory, or logistics to ship products to your customers. Selling products online without inventory frees up your time to help you focus on growing the business instead of worrying about shipping and delivery. If you want to start selling products but don't want to store or ship them, keep reading! Here's everything you need to know about creating an online store without inventory.
1. Dropshipping
Dropshipping is when the manufacturer creates and ships the products on your behalf directly to the customer. Dropshipping partners can also be distributors, so they're not limited to just manufacturers. An example of dropshipping would be if someone purchased a puzzle from your website. With dropshipping, the orders made through your e-commerce store would go back to the puzzle manufacturer, who would send the order to your customer.
Dropshipping has many benefits for small business owners, including the fact that it can save you time and prevent unnecessary stress. Since you don't need inventory, you don't have to worry about shipping the products. Of course, there are downsides to dropshipping, too. Dropshipping is fairly limited, and you won't be able to use your own packaging or create branded products with your logo. In most cases, your dropshipping partner will send the products in their branded packaging, which limits your creativity and brand awareness. Dropshipping can also be expensive because it requires the service provider to do the bulk of the work for you.
Still, dropshipping can be a great option for small business owners trying to get their businesses up and running and want to make sales as soon as possible. Any e-commerce product can be dropshipped, allowing you to sell just about anything on your website. Learn how to start dropshipping.
2. Affiliate store
Starting an affiliate store means you don't have to worry about finding products to sell online. Instead, you partner with other sellers who pay you a commission to sell products on your e-commerce site. Examples of affiliate stores can be any products, including books, pet products, and any other physical items. Every time you sell a product, you earn a commission, and the order goes directly to the seller, so you don't have to worry about inventory or shipping.
Affiliate stores make it easy to get your business up and running once you find a partner. Instead of focusing all of your energy on managing inventory and shipping, you can focus on marketing the products to increase sales, ultimately increasing your profit. Unfortunately, affiliates only see a small percentage of the sale, so you'll need to sell a lot to make a reasonable profit. Additionally, you're at the seller's mercy, so if there's a customer service issue on their end, it could impact your business.
Affiliate e-commerce stores are ideal for individuals who have a knack for sales and marketing and can sell many products quickly. This route is often great for those with large social followings on social media platforms who can partner with brands to promote their products.
3. Print on demand
Print-on-demand e-commerce stores allow you to sell items that can be printed without the need to have them in your inventory. When someone orders your print-on-demand products, they will go directly to a printing business that will take care of the printing and shipping. With print-on-demand stores, you're limited in what you can sell. However, you can sell any printed products like canvas prints, t-shirts, mugs, blankets, puzzles, and notebooks, as long as you can find a quality partner that offers all of these products.
You can also start a print-on-demand e-commerce store without finding a printing partner by purchasing your own printer and only printing items when an order comes in. Of course, this means having some inventory on hand, like blank t-shirts, mugs, and other products.
Print-on-demand businesses are great for individuals who excel at graphic design, allowing you to put your art on printed products and sell them online.
4. Digital products and services
Not all e-commerce businesses sell physical products. Instead, you could sell digital products and services directly on your website, and you don't need inventory to do it because everything is digital. Digital products and services you can sell depend on your target market but may include:
- Educational courses
- Digital artwork and prints
- E-books
- Memberships
- Online services like tutoring
Of course, if you plan to go this route, you'll need digital products and services for people to purchase, so you'll likely have to choose a niche. For example, if you want to sell online services like yoga classes or memberships to your website, you'll need to continuously create new content in the form of videos or courses.
5. Fulfillment by Amazon
Fulfillment by Amazon (FBA) is a program that allows businesses of all kinds to run an e-commerce store without managing their own inventory. Instead, you'll send products directly to Amazon's fulfillment centers, where they'll manage, pick, and pack products to send to customers. Using the Amazon FBA program gives you access to millions of their customers, allowing you to source products, deliver them to the warehouse, and start selling online. Of course, if you plan to use the FBA program, it's a good idea to invest in learning the platform and the different ways you can market your products online to get more sales.
The Amazon FBA program will save you time, but it costs money. Amazon charges fees for storing your products and fulfilling orders. However, they'll also handle any customer service issues on your behalf.
6. Third-party logistics (3PL) company
Using a third-party logistics company is similar to dropshipping, as they can handle everything from inventory management to fulfillment. You still need inventory but don't have to keep any on-hand or in your own warehouse. Using a 3PL service allows you to be flexible in the types of products you can sell, but you'll still need to source your own items. Additionally, the service can be expensive because they're handling everything except sourcing for you. While you can sell any products with a 3PL company, you can expect a flat fee for storing products in their warehouses and additional fulfillment costs.
3PL companies are best for businesses with a large customer base, so if you're just getting started, consider dropshipping instead.
FAQs: Starting an online store without inventory
What are the pros and cons of not having inventory?
Not having inventory makes running your business from home easier because you'll only need an office to manage everything from marketing to customer service issues. Additionally, some methods may take care of customer service for you, effectively reducing your overhead costs. Here are some of the pros and cons of not having inventory:
Pros:
- Limited overhead costs: With no inventory, you can reduce your overhead costs because you don't have to worry about storing, picking, packing, or delivering products. However, you'll still need to pay for these services.
- Save time: Not having inventory saves small business owners time. In most cases, you'll need to focus on sourcing products and marketing them to get more sales.
- Easier shipping: With no inventory, you outsource shipping, making it easier to manage your orders because another company will do it for you.
Cons
- Limited customizability: When you don't manage your own inventory, you have limited customizability, so you won't be able to use your own branding on products or packing.
- Lack of control: With most of the methods for selling products without inventory, you will have no control over the management of inventory or shipping, which can affect your customers.
- Lower profit margins: You have to pay for all of these services, which means you'll have lower profit margins. However, you'll still save money because you won't have to worry about getting your own warehouse space.
How do you open an online store?
Opening an online store takes time and research. There are many things you must do to prepare your online store, including:
- Research products to sell: Sourcing products can be time-consuming, but finding products that will sell to your target audience is well worth it.
- Pick an e-commerce platform: There are many types of e-commerce platforms that allow you to build your website and start selling products as soon as possible.
- Build your website: You can use drag-and-drop website builders or hire a web designer to start building your website, including product pages.
- List your products: Your products are the most important part of your business, so you must list your products with descriptive text and use images to help customers learn more about what you sell.
- Market your products: Investing in marketing will ensure you bring more traffic to your website, increasing the chances of making sales.
- Test your website: Continue to test your website using A/B testing to find the right sales copy and design elements to increase conversions.
Learn more about how to start an online store.
What should you consider when starting an online store without inventory?
When starting an online store without inventory, you benefit from not having to worry about warehouse management and shipping. However, there are other things you should consider, including:
- Branding: Are you fine with selling products that don't have your logo or branding? Since you don't have control over packaging or shipping, your packaging won't have any branding. Instead, it might be a standard box or include your partner's branding.
- Research: Always research services that can help you increase your profit. You'll also need to source products, which may mean working with multiple manufacturers offering dropshipping. Pricing your products effectively may mean considering the different fees you have to pay for selling without inventory.
- Returns: Some methods for selling products online without inventory will handle the return process for you when customers are unsatisfied with purchases. However, the return and refund process differs depending on your partner, so it's always best to learn about the different processes and how they can impact your bottom line.
Start an online store without inventory with Mailchimp
Ready to start an online store without inventory? Mailchimp makes it easy for you to build elegant e-commerce websites, design product pages, and begin marketing products in one easy-to-use automation platform. Once you've found the right method for selling online without inventory, you can list your products and begin email marketing or using professional landing pages with digital ads. Mailchimp makes it easy to get your business up and running in no time.
