Every Dropshipper considers internet trading before starting their own business. Questions like how to start your own online store without inventory might come to your mind. This doubt especially comes in mind if you don’t have much experience in the field of online retail and you have limited financial resources. We will tell you different ways of launching your own Dropshipping store without buying or keeping stock of products.
Running an online business is indeed a complicated task to do. Especially if you are starting a brick and mortar shop. You will face many challenges. You have to deal with many things if you are selling your products in a typical way. You will have to keep some things in mind like stocking inventory, having reliable whole sellers, fulfilling orders, dealing with customers accurately, and making sure that your warehouse has enough stock.
You need a lot of time and money investments to take care of all these activities. You may have heard about a guy who had spent all his savings on goods that he borrowed from the bank or his friends. Unfortunately, things went against his favor and he was left with nothing but massive debts.
However, in the current scenario, you don’t need to necessarily own something in order to be successful. We will tell how.
The scope of selling products online without inventory:
There are many outstanding global corporations that we need to look out for. Here are some of them:
- Facebook: it is the most famous and prominent social media platform in the current scenario. Although, social media giant doesn’t own or produce the content.
- Uber: this is the biggest taxi service in the world and the company still doesn’t own all these cars.
- Alibaba: it is one of the most renowned online retail site in the world and comes under top 10 most valuable companies worldwide. However, this platform still doesn’t hoard any stocks.
- Airbnb: being one of the most prominent rent company worldwide, the company still doesn’t own or build its real estate.
So, what idea we get from this?
The idea is simple. We can sell products online without keeping stocks with us and it will not be fraud but a fair business. All that we need to do is choosing a right model of business. In this way, you can take your business to the verge of success.
You need an adequate research on how to build an online business without any inventory. You may come up with your own ideas to do this. These ideas will make your business successful. You can start your business with nothing to lose. Sounds great, isn’t it?
We will examine and compare popular options and talk about how they work.
1 – Starting an online business without any inventory: building an affiliate store
This method is one of the most popular methods to start an online store. This method is more famous as it is very simple and the chances of loss are very low.
In this method, entrepreneurs promote products of other entrepreneurs and earn commission fee by reaching out to people and selling these products.
Affiliate stores are indeed a successful method of business for people who are new to this business. There are many companies across the globe which own their affiliate programs. If you are starting your business through affiliate store, you can choose the one which you like or suits you. You can join various programs to promote their products on different resources.
You need to carefully study all the rules and regulations regarding the program before joining it as there are many programs that do not allow using email marketing.
You can promote your products through your email list, website, blog, or social media.
One thing that you need to keep in mind is that the commissioned rates are always set by the companies that offer the affiliate program. So, one con of this method is very low income. It is very hard to make your living out of this method if you are just dependent on this. This method can generate passive income but cannot be a source of enough constant income.
2 – Starting your own online store without any inventory: opting print-on-demand services
This business model simply involves the method of selling print-on-demand products. You can sell products like hats, tote bags, t-shirts, cups, keychains, home decoration items, mugs etc. through this method. It allows you to build your own brand as well.
The first step that you need to do is to connect your online store with any print-on-demand service. Then you can design your own custom accessories and clothing.
In order to sell some product from your online store, firstly you have to charge your customer for the product and send the order of that product to the print-on-demand service directly. These services print the ordered products and take money from you along with the shipping cost. Finally, they deliver the products to your customer. You can generate as much income as you want by charging your customer however you want. Isn’t this method great? The answer is definitely a yes as it allows you to reap high profits through your business.
Print-on-demand services is indeed a very good option for selling these kinds of products. Another benefit of this method is that you can build your own brand. However, building a brand of your own is not an easy task to do as it is very difficult to stand out from the market competition. It is not easy because the niche of this method is very limited, narrow and very famous.
Another con of this method is that if you want to make your business successful, you must have amazing design skills and creativity. It is well and good if you are creative and a good designer, but if you are not, you should outsource the designing part. Outsourcing can be very beneficial for your business.
3 – Use 3PL/FBA to run the online store without inventory:
The first thing that you need to understand about this method is that this model of business is strictly not a trade without inventory but it a trade without warehousing. This method is very similar to a typical online store. The only difference it has with a traditional online store is that it doesn’t need any inventory storage. Also, you don’t have to worry about the delivery of the order.
Technically speaking, 3PL is basically a third-party logistics company. These 3PLs look after the storage of your items and fulfill all orders. Some 3PLs also offer product returns and the customer support.
There is a whole lot of process involved in this method, which is as follows:
- The first step that you need to do is to ship your products to the 3PL provider of your choice.
- Then you have to wait for any order from customers. Once you get an order from a customer, you need to send it to the 3PL.
- The 3PL provider will then ship your order to your customer.
- Last but not the least, you will have to pay a monthly fee and a cost of fulfillment for every order to the 3PL provider.
FBA also works in a similar way. It stands for fulfillment by Amazon. However, this involves relatively more risks than benefits. Amazon takes away a good part of the revenue generated by your business. The company regulates the business very strictly. They hold the authority to confiscate your money for any whatsoever reason. Also, Amazon can shut or ban your store at any point in time. Most important thing is that it has numerous amount of competition in the market.
Summing up, this method doesn’t require you to deliver your orders yourself or store any inventory. Also, you can keep your margins very high.
However, you can’t call this model as a true business without a stock model as you still need to purchase your products upfront and you are definitely not looking for this.
4 – What products you can sell online without inventory:
The most common question that comes to your mind might be ‘How to run your business without any inventory?’ or ‘What kind of products that you should sell?’ Well, we are here to answer all these queries. You can start a business to create and sell digital products or providing services.
In the current scenario, there is a need for things in the market which can be sold with no inventory. These things include eBooks, music, photos, software, certain courses, training and the list goes on. There are thousands of similar kinds of services which can be possible through this. In the scenario of the digital world, these digital products have higher chances of success. People are being more involved in the digital products than just the physical products. These kinds of digital products and services are in high demand.
There is a huge demand for services like graphic and web designing, legal, copyright translations, IT or HR consultations, search engine optimization (SEO), coaching language teaching and various other services.
However, the problem of resources is still not solved by this. The first thing that you need to do is to get a digital product. Only then you can offer your digital products to your customers.
In case you create your products on your own or you provide your services online, the whole process can relatively be more complicated. This will need an excessive amount of your time and energy as it’s the time and energy that you are using to generate money.
You might have to spend most of your time in front of your computer and that is no different than a 9 to 5 job. The only difference is that you are sitting on sofa at your home instead of an office chair. Also, you don’t have to travel to your office daily. However, the time it requires is a minus point of it. No one wants to spend most of the day in front of the computer.
5 – Dropshipping: another way to start your online store without any inventory
A traditional Dropshipping cycle works like this: firstly, customers order certain items from your online store. Then you send the details of your order to your wholesale supplier. Then your wholesale supplier ships the order directly to the customers.
There is a lot of difference involved in this process. Firstly, you don’t need to pay for the products until your customers order something on your online store. Secondly, you don’t have to keep a stock of your products and you don’t need to send them to any place. This simply means that Dropshipping is the only true method to do online business without any inventory.
Anyone can start and run an online store without inventory or spending a lot of funds through the Dropshipping model. You can have additional profits if you run your Dropshipping business through platforms like AliExpress as these platforms give a lot of cashback. To increase your chances of success, we highly suggest you get your online store automated with special tools. These special tools increase the efficiency of your online store.
Your business can be even more profitable if you find a supplier at lower prices. You can set any margin of your choice in this way. This business model is very suitable for people who want to run an online business with massive sales, but don’t want to spend on inventory.
Other benefits of Dropshipping-
- You can keep complete focus on customers services and marketing.
- You will not have a shortage of goods.
- You will not face a surplus of goods that are undemanded.
- Your products have no limited range in quantity and quality both.
There are few other things that you need to keep in mind. We suggest you select a particular niche that holds a high potential. You should choose suppliers very carefully. You should work on your pricing strategy. All these things become easier when are less worried about saving money for purchasing goods, paying rent of warehouses and delivering the products.
So, it is clear from this article that Dropshipping model of business is undoubtedly the most successful among all other models of online business without any inventory. If you have an efficient Dropshipping store, no one can stop you from reaping high profits.