If you are fed up doing that 9-to-5 job and that limited pay, it’s time that you start something for your own self. Yes, a business. Most of us want to start an online business or an online store to sell products through, but the misconception that we would need to maintain an Inventory first takes the very thought away. But did you know that you can open up an online store even if you have no Inventory to start with? Yes, it’s true.
In fact, it is very easy to start an online e-commerce store without worrying about storage or shipment to the customers. Amazon, Flipkart, etc. does the same thing. How? In this article, we are going to tell you those 3 ways using which you can start your own business online without owning any Inventory. So let’s get started.
Ways to start an online store without Inventory.
1. Through Dropshipping
This is a way of managing an e-commerce store where the customers place orders on your website but the products are shipped to the customer end by the distributor or vendor you have tied-up with.
In short, you assign yourself a responsibility of receiving orders from customers but the delivery is planned and organized directly from the store that actually has the availability of that particular product. So the need of first buying and then storing an item under your own check is eliminated. In other words, Inventory is no longer needed in Dropshipping.
How does it work?
- A customer places an order on your online store.
- Once you receive the payment, you place an order for the same product with your distributor at an agreed upon price.
- The product is packed with your company’s name and logo and is finally shipped to the customer end.
Simple, isn’t it? But since everything in business have pros and cons as well. Here are some to the Dropshipping part.
- There are no upfront costs involved as it doesn’t need any Inventory.
- You need to have a well designed and responsive website and you can start taking orders directly.
- Holding the customer’s interest in you is quite difficult as delivery is taken care of by the distributor.
- The margins are low as compared to having an Inventory.
- There can be pricing pressure as other stores could be selling the same product.
- You will have to use SEO and other free methods to promote your business. Promotions are easy if you have someone with deep knowledge regarding SEO and content management strategies by your side. A lot of these writers/content creators are available at Contentmart, a leading online content marketplace.
- You need to establish a connection with the vendor’s database to check the availability of the products.
So if you are planning to quickly start an online store, Drop shipping is the thing you can use. Profits are usually low but after years, you’ll start enjoying things you want.
2. Using a 3PL service
3PL stands for 3rd party logistics. These companies take a good care of storage and product fulfillment. They also handle product returns and customer support sometimes.
How does a 3PL works?
- You send your products to a 3PL company.
- A customer places an order and thus, you send a notification to the company with all the details about the product which is demanded along with the customer’s contact and shipment details.
- The company delivers the order to the customer.
The 3PL company is tied a monthly fee plus per order cost for fulfillment for doing its services. It is pretty much similar to an online store with inventory except that you don’t handle packaging and shipment here. Shipwire, EF Fulfillment Service, ShipMyOrders are some 3PL companies.
3. Through Amazon FBA
Amazon FBA stands for “Fulfillment by Amazon”. Today, there are many sellers online who rely on FBA service. Here is how it actually works:
- You ship your products to Amazon and also list your products at the Amazon marketplace.
- A customer places an order at Amazon.
- Amazon handles everything from handling storage to the product fulfillment.
It is always the best to work with Amazon as it already has a large audience of buyers whom you can connect with. They ask pretty much portion of your profits in return and you have to obey its rules to sell products there. In order to sell more, your products should have a great content/description to influence and attract the visitors. For this, you can simply hire a great content writer who could write engaging product reviews. Contentment is one such site with a huge assemblage of talented freelance content writers.
Pros & Cons:
- It takes a lot of your sales (15% of your revenue + 10-15% for shipment or fulfillment).
- You have to first purchase products to ship it to the Amazon’s warehouse.
- Your margins must be good to pay Amazon from time to time.
- It can ban you anytime.
So these were the ways using which you can easily start an online store without Inventory. Hope you guys liked it. Share and give your opinion back in comments.
TIP: I can help you for free, just ask me a question on the forum and I will be happy to answer.