TL;DR
- Selling on Amazon without inventory allows for low startup costs and flexible operations.
- Dropshipping lets suppliers handle shipping and storage while you focus on marketing.
- Merch by Amazon offers a print-on-demand service, ideal for creators who want passive income.
- Kindle Direct Publishing (KDP) enables writers to publish books without upfront costs.
- Digital products are highly scalable with minimal costs, making them a profitable option.
- Affiliate marketing allows you to earn commissions by promoting other brands’ products on Amazon.
There are all kinds of sellers on Amazon.
Some are big brands like Apple and Nike. They’ve got the cash, the recognition, and the customers. They build their own products, store them in massive warehouses, and flood fulfilment centres with inventory. When the orders roll in, they’re more than ready.
Then, there’s the next group—the sellers who’ve saved up a good amount of money. They buy from manufacturers, store products either in their own space or Amazon’s, and go all in to grow their sales. They create polished listings, optimise ads, and hustle to stand out in a competitive market.
And then, there’s the third group.
The side hustlers.
They want to test the waters without jumping all the way in. They’re curious about Amazon but aren’t ready to sink serious money into inventory or FBA fees. They don’t have the space for piles of stock, and they sure don’t want to deal with shipping boxes.
Sound familiar?
If this is you, don’t worry. You’re not alone. Thousands of sellers are already doing exactly what you want to do—selling on Amazon without ever touching a product.
No warehouse. No storage fees. No inventory piling up in your living room.
There’s a way to sell on Amazon without owning any inventory at all. Intrigued? Let’s find out how it’s done.
Quick guide
- Ways to sell on Amazon without inventory
- Dropshipping
- Merch by Amazon
- Kindle Direct Publishing
- Digital products
- Affiliate marketing
- Which Amazon selling method is right for you?
- Why sell on Amazon without inventory?
- Before selling on Amazon without inventory, make sure to…
- Frequently asked questions
- Which method is easiest for beginners?
- Can I use multiple selling methods simultaneously?
- How do I handle returns and refunds when I don’t have physical inventory?
- Can I start with zero investment?
- How do I find the right suppliers for dropshipping?
- Is it possible to scale a business without inventory?
- How can I differentiate myself in a crowded market?
- What should I do if a customer receives a damaged product?
Ways to sell on Amazon without inventory
1) Dropshipping
What is it?
Dropshipping is a business model where you sell products on Amazon without ever holding any inventory. Instead, you list products on Amazon, and when a customer places an order, you purchase the item from a third-party supplier, who ships it directly to the customer. You act as the middleman, focusing on marketing and customer service while avoiding the hassle of storage and shipping.
How to do it?
- First, create an Amazon seller account. This gives you access to Amazon’s tools and dashboards to manage your dropshipping business.
- Next, find a trustworthy dropshipping supplier. Make sure to research their credibility and confirm they can meet Amazon’s drop shipping policies. Avoid suppliers that send invoices or external identifiers to customers—Amazon strictly prohibits that.
- Once you’ve locked in your supplier, list the products on Amazon and get your listing optimised by hiring a professional Amazon SEO expert. You don’t buy any stock upfront—you only purchase the product once a customer places an order. This minimises your financial risk.
Expected costs
Dropshipping is appealing because of its low upfront costs. You don’t need to invest in inventory or storage. However, there are still some expenses:
- Amazon seller fees: Typically 8-15% per sale, depending on the category.
- Supplier costs: You’ll pay your supplier for the product, usually at a wholesale price.
- Marketing: If you run ads to promote your listings, factor in advertising costs.
For example, if you sell a product for $50 and your supplier charges you $30, your gross profit is $20. After Amazon’s fees (let’s say $7.50), your net profit would be $12.50 per sale.
Pros and cons
| Pros | Cons |
| Low upfront investment: No need to buy inventory or rent storage space. | Low-profit margins: You’re not buying in bulk, so you may pay higher per-unit costs. |
| No need for warehousing: Suppliers handle shipping and storage for you. | Lack of control: You rely on your supplier’s stock and shipping times, which can cause issues. |
| Easy to scale: You can sell a wide range of products without worrying about holding stock. | High competition: Many sellers use dropshipping, making it harder to stand out. |
| Focus on Amazon Pay Per Click account management and customer service: You can concentrate on growing your business. | Quality control: You can’t guarantee the quality of products, which can lead to returns. |
| Sell internationally: Dropshipping allows you to expand to different markets easily. | Supplier reliability: A bad supplier can lead to delays, mistakes, and negative reviews. |
2) Merch by Amazon
What is it?
Merch by Amazon, also known as Merch on Demand, is Amazon’s print-on-demand service. It allows designers, digital creators, and even non-designers to sell custom-designed products like t-shirts, hoodies, and sweatshirts without holding any inventory. Once you upload your design and choose a product, Amazon handles the rest—from printing the design to shipping the product to the customer.
Image ref: Amazon
How to do it?
First, you’ll need to apply for the Merch by Amazon program. Once accepted, you can start uploading your designs. You’ll select the type of product (like t-shirts or sweatshirts), set your price, and list it on Amazon.
When a customer places an order, Amazon prints the design onto the selected product and ships it directly to the buyer. You don’t pay anything upfront; instead, you earn a royalty on every sale.
If you’re not a designer, you can still take advantage of this model by hiring freelance designers from platforms like Fiverr to create designs for you. This way, you can focus on marketing and selling the products without worrying about the design work.
Expected costs
There are no upfront costs to get started with Merch by Amazon. You won’t pay for inventory, storage, or shipping. However, Amazon keeps a portion of the sale as a production cost, and you receive the rest as royalties.
For example, if you sell a t-shirt for $25, Amazon may take $12 for printing and shipping, leaving you with a $13 royalty. The royalty you earn depends on the price you set and the cost of production.
Pros and cons
| Pros | Cons |
| No capital investment needed: You don’t need to buy inventory or pay for shipping. | Invitation required: Acceptance into the program is not guaranteed, and there’s a waiting list. |
| Prime badge: All products are listed with the Amazon Prime badge, giving you fast shipping perks. | Limited product options: Merch by Amazon currently only offers a small range of products. |
| Access to Amazon’s massive customer base: You reach millions of buyers instantly. | No cross-platform selling: Your designs are restricted to Amazon, limiting external opportunities. |
| Earn passive income: Once your design is live, you can earn royalties without doing any fulfilment. | Less creative control: Limited to the product types and design templates provided by Amazon. |
| Mock-up generator: Amazon provides tools to help you visualise your designs before listing them. | – |
3) Kindle Direct Publishing
What is it?
Kindle Direct Publishing (KDP) is Amazon’s self-publishing platform that allows authors and publishers to easily publish and distribute both digital and print books worldwide. Whether you’re an experienced author or new to writing, KDP provides a simple and accessible way to reach millions of readers without the need for traditional publishing.
How to do it?
- First, create a KDP account.
- Once your manuscript is ready, you can upload it in various formats like Word, PDF, or ePub.
- Add your book details, such as title, author, and metadata, which helps your book appear in Amazon searches. Make sure to design an eye-catching cover that stands out.
- After uploading your book and setting the price, submit it for Amazon’s approval. Once approved (usually within 72 hours), your book will be available for sale on Amazon.
- If you’re publishing a physical book, Amazon will print it on demand and ship it to customers when orders are placed.
Expected costs
- Publishing through KDP is free—there are no upfront costs for listing or printing. However, Amazon takes a portion of each sale as their fee, and you keep the rest as royalties.
- Royalty rates: You can earn up to 70% on digital books, while physical books usually provide a 60% royalty minus printing costs. For example, if your ebook is priced at $9.99, you could earn around $6.99 per sale after Amazon’s fees.
Pros and cons
| Pros | Cons |
| No fees to start: You can publish your book at no cost. | Highly competitive: There are millions of books on Amazon, making it tough to stand out. |
| Global audience: Your book will be available to millions of readers worldwide on Amazon. | Lower visibility: Unless you market your book, it can easily get lost among the competition. |
| Print-on-demand: No need to hold or ship physical inventory—Amazon prints and ships for you. | Profit margin on print books: Printing costs can cut into your royalties for physical books. |
| Flexibility and control: You can update your book, price, and listing whenever you want. | Marketing needed: You’ll need to promote your book to drive sales, as Amazon alone isn’t enough. |
| Data and analytics: Track your sales, earnings, and customer trends with KDP’s reporting tools. |
4) Digital products
What is it?
Selling digital products on Amazon allows you to offer downloadable content like music, audiobooks, software, and digital art without the need for physical inventory. Unlike physical goods, digital products are instantly delivered to customers, making them a highly scalable and cost-efficient way to sell on Amazon.
How to do it?
- To sell digital products, first, decide on the type of content you want to offer. This could be music, artwork, software, e-guides, or even audiobooks.
- Once you have your digital product ready, you’ll need to set up an account on Amazon, whether it’s through Amazon Music, Audible (for audiobooks), or another relevant platform.
- After uploading your product, you set your price, and when customers purchase it, they receive instant access to their download.
Expected costs
- One of the biggest advantages of selling digital products is the low cost involved. There are no shipping fees, storage fees, or production costs beyond the initial creation of the product.
- However, Amazon will take a percentage of each sale, which varies by product type:
- For audiobooks on Audible: You can earn 40% in royalties if you sell exclusively on Audible, or 25% if non-exclusive.
- For music: Royalties typically range around 10-20% depending on the platform and agreement.
- For example, if you sell an audiobook for $20, and you’re on the 40% royalty rate, you’ll earn $8 per sale.
Pros and cons
| Pros | Cons |
| Immediate delivery: Customers get instant access to your product, no waiting for shipping. | Digital piracy: Risk of your content being shared or downloaded illegally. |
| Low overhead costs: No need for inventory, shipping, or additional production expenses. | Market saturation: Depending on the type of digital product, competition can be fierce. |
| High scalability: Once created, the same product can be sold repeatedly without extra cost. | Protecting intellectual property: You’ll need to take steps to secure your product from competitors or unauthorised use. |
| High profit margins: Without production or shipping costs, most of your sales are profit. | |
| Creative control: You maintain ownership and control over how your digital product is used. |
5) Affiliate marketing
What is it?
The Amazon Associates Program is Amazon’s affiliate marketing platform where bloggers, content creators, and social media influencers can earn commissions by promoting products sold on Amazon. Instead of selling products directly, you earn a percentage of sales whenever someone clicks on your affiliate link and makes a purchase.
How to do it?
- Start by signing up for the Amazon Associates Program and submitting an application. Your blog, website, or social media account must meet Amazon’s content guidelines.
- Once approved, you’ll be able to access tools to create custom affiliate links for products you want to promote. For example, if you run a blog about fitness gear, you could write a review of workout equipment, including your affiliate links to the products on Amazon.
- When a reader clicks on your link and purchases the item, you earn a commission. You can also promote products through YouTube or other social media platforms by including affiliate links in your posts or video descriptions.
- Amazon will review your application after you’ve driven at least three qualified sales within 180 days, and if all program requirements are met, your application will be fully approved.
Expected costs
- There are no upfront costs to join the Amazon Associates Program. You only earn commissions on completed sales, meaning there is no risk or investment required.
- However, your earnings depend on the category of the product sold.
- Commissions typically range from 1% to 10%, with certain programs offering a higher percentage.
- For instance, if a product sells for $100 and you earn a 5% commission, you’ll make $5 per sale.
Pros and cons
| Pros | Cons |
| No upfront costs: It’s free to join and requires no inventory or shipping. | Requires traffic: You need an established audience to make consistent sales. |
| Passive income: Once links are placed, they can generate ongoing commissions without much effort. | Low commissions: Some categories offer commissions as low as 1%, making high earnings difficult. |
| Easy to scale: You can promote countless products across various niches and platforms. | Strict approval process: You must meet program requirements and drive sales within 180 days. |
| Wide variety of products: Amazon offers millions of products to promote. | Competitive space: Many content creators already use affiliate marketing, so standing out can be tough. |
| Ideal for content creators: Monetize blogs, videos, or social media with ease. | Earnings vary by product category: Some high-ticket items may not offer significant commissions. |
Which Amazon selling method is right for you?
| Criteria | Dropshipping | Merch by Amazon | Kindle Direct Publishing | Amazon Associates Program | Digital Products |
| Upfront costs | Low – you only purchase products after a sale is made | None – no need to purchase inventory or pay for production | None – you can publish without any upfront fees | None – you don’t need to purchase any products | None to low – minimal costs if creating your own digital products (software, music, digital art) |
| Inventory management | None – suppliers handle storage and shipping | None – Amazon handles printing and shipping | None – Amazon handles the digital and print fulfilment | None – you’re promoting other brands’ products | None – digital products are instantly delivered to customers |
| Time to start | Quick – once you find a supplier, you can list products and start selling | Moderate – you need to create and upload designs, but no need to handle inventory | Quick – once your manuscript is ready, you can upload and publish | Quick – once approved, you can start adding affiliate links | Quick to moderate – depends on product creation time (e.g., creating music or designing digital art) |
| Scalability | High – you can scale easily without worrying about inventory | High – once your designs are live, you can sell without additional effort | High – no need for inventory, making it easy to publish multiple books | Medium – you can promote products across platforms, but success depends on your ability to drive traffic | Very high – once the product is created, it can be sold infinitely without additional production costs |
| Profit margins | Low to medium – as you don’t buy in bulk, profit margins can be slimmer | Low to medium – Amazon takes a portion of each sale for production costs | Medium to high – you keep up to 70% of sales depending on the book’s format and price | Low – commission rates vary, but typically range between 1-10% depending on the category | High – since there’s no inventory or shipping, most of the revenue is profit |
| Control over product quality | Limited – you rely on the supplier to manage product quality | Limited – you rely on Amazon for printing and quality control | Full control – you’re responsible for the content and design, but Amazon handles the rest | None – you have no influence over the products you promote | Full control – you’re responsible for the creation and quality of your digital product |
| Best for | Sellers who want low-risk, low-investment options and are good at managing customer service and supplier relationships | Creators who can design (or outsource designs) and want a simple, hands-off business model | Writers or content creators who want to self-publish without inventory or upfront costs | Bloggers, content creators, or influencers who already have an audience and want to earn passive income by recommending products | Creators of digital content like artists, musicians, software developers, or anyone interested in selling digital goods without inventory |
- Dropshipping: Best for sellers who want low-risk and no upfront inventory costs but are comfortable managing supplier relationships.
- Merch by Amazon: Ideal for designers or anyone wanting to sell custom products without handling production or fulfilment.
- Kindle Direct Publishing (KDP): Perfect for writers or content creators who want full control over their work without dealing with physical inventory.
- Amazon Associates: Best for those with an established audience who can drive traffic to Amazon and earn commissions from product recommendations.
- Digital Products: Ideal for creators of digital goods like music, art, or software who want to scale without the need for physical inventory or shipping.
Why sell on Amazon without inventory?
Selling on Amazon without holding inventory is one of the smartest ways to start your ecommerce journey, especially if you want to avoid hefty upfront costs. Here’s why:
1) Low startup costs
When you don’t have inventory, you don’t need to worry about the costs of storing products, managing logistics, or dealing with fulfilment headaches. You’re using an existing infrastructure, which significantly lowers your startup costs compared to the traditional private-label model. You can focus on listing products and making sales without investing thousands of dollars in stock.
2) Less financial risk
Without inventory, you eliminate the risk of over-ordering or sitting on unsold products. You never have to worry about storage fees or losing money on merchandise that doesn’t move. There’s no risk of products getting lost or damaged in storage, which can be a huge relief for small sellers.
3) Quick to get started
Selling without inventory means you can get up and running almost immediately. Once you’ve identified a product to sell, you can list it on Amazon and start making money. You don’t need to wait for a bulk order to arrive or go through the process of managing supply chains. This flexibility is especially useful if you spot trends or seasonal opportunities.
4) Flexible selling channels
When using inventory-free models like dropshipping or affiliate marketing, you’re not limited to Amazon alone. You can sell on your own website, social media, or across multiple platforms simultaneously. This gives you more ways to reach customers without locking yourself into one marketplace.
5) Operate from anywhere
Without the burden of managing physical inventory, you can run your business from anywhere in the world. Whether you’re on vacation or working from home, you’re not tied down by the logistics of fulfilling orders. All you need is an internet connection to keep your sales going.
6) Easier to scale
One of the biggest challenges when scaling a business is managing storage and inventory costs. When you sell without inventory, those issues disappear. You can handle more orders without significantly increasing your operational costs, allowing your business to grow faster and more smoothly.
7) Flexibility with products
If you’re unsure what to sell or want to test different product ideas, selling without inventory gives you the flexibility to experiment. You’re not locked into a specific product or niche. You can test out trending items, see what works, and shift strategies without worrying about unsold stock piling up.
8) Global reach
Depending on the method you choose (dropshipping, print-on-demand, or digital products), you may be able to sell to a global audience. Amazon’s infrastructure allows you to reach millions of potential customers worldwide, without needing to manage international shipping or logistics on your own.
9) A stepping stone to bigger things
If your ultimate goal is to start a private label business, selling on Amazon without inventory is a great way to build up capital. It allows you to get familiar with how e-commerce works, grow your brand, and generate income without risking significant funds upfront. You can use the profits to invest in larger projects down the line, like launching your own private-label product.
Before selling on Amazon without inventory, make sure to…
1) Communicate transparently
Especially if you’re using dropshipping, it’s essential to be upfront with your customers. Clearly communicate shipping times, product availability, and any potential delays. When you don’t control the inventory directly, transparency is the backbone of customer trust. Set realistic expectations to keep your customers satisfied and returning.
2) Collaborate closely with suppliers
Since you won’t be handling the product directly, it’s crucial to work with reliable suppliers. Maintain regular communication with them to ensure product quality and resolve issues quickly. Suppliers play a critical role in your business, so building a strong relationship with them is key.
3) Stay compliant with Amazon’s policies
Familiarise yourself with Amazon’s product restrictions and regulations, from safety standards to labelling requirements. This is especially important when selling without inventory, as any misstep can lead to penalties. Avoid restricted products, and ensure that your business is operating within legal boundaries to keep your account in good standing.
4) Automate your processes
To streamline operations, leverage technology to automate processes like order fulfilment, tracking, and notifications. The less manual work you have to do, the more time you can dedicate to growing your business. Automation helps improve efficiency while ensuring a smooth customer experience.
5) Follow trends
Keeping up with trends is a great way to tap into high-demand products. Whether it’s a trending product on social media or a popular design theme, trends can help guide your next big seller. Always be on the lookout for what’s hot and how you can meet that demand through your digital storefront.
6) Conduct thorough product research
Even when selling without inventory, you need to conduct thorough product research, just as you would with private label products. Use tools like Helium 10 or Amazon’s Product Opportunity Explorer to identify items that are in high demand and have profit potential. This will make all the difference in choosing products that sell well.
7) Prioritise small and lightweight products
If you’re involved in dropshipping or print-on-demand, prioritise small, lightweight items. These products tend to have lower shipping costs and fewer complications, making them easier to manage and more cost-effective.
8) Diversify your selling platforms
Consider how the products you choose can perform across multiple platforms, not just Amazon. For example, t-shirts or trending items might do just as well on Instagram or TikTok. By diversifying your revenue streams, you maximise your reach and make the most of your efforts.
9) Respond to customer feedback
Customer feedback, whether good or bad, is invaluable. Address complaints quickly and turn negative experiences into positive ones. This is even more critical when you don’t control inventory—good customer service can bridge the gap and create loyal customers.
Frequently asked questions
Which method is easiest for beginners?
There’s no one-size-fits-all answer to this. The easiest method depends on your skills and interests. If you love writing or creating content, Kindle Direct Publishing (KDP) might be the fastest way to get started. If you’re great at networking and finding suppliers, dropshipping could be your best option. Each method has its own challenges, but with low financial risk and no need for inventory, these models are beginner-friendly as long as you focus on customer service, marketing, and communication.
Can I use multiple selling methods simultaneously?
Yes, you can absolutely combine different selling methods. Many e-commerce sellers diversify their strategies to maximise profits. You can combine dropshipping with print-on-demand, sell on multiple platforms (Amazon, eBay, Shopify), or even mix affiliate marketing with other models. Using multiple approaches allows you to reach different customer bases and reduce reliance on one single strategy.
How do I handle returns and refunds when I don’t have physical inventory?
Amazon can manage returns for you if you’re using fulfilment services like FBA. They inspect returned items and decide whether they’re resalable or should be disposed of. If you’re dropshipping, you’ll need to coordinate returns with your supplier. It’s critical to have clear communication with customers and suppliers to handle refunds smoothly. Ensure your seller account has sufficient funds to cover potential refunds.
Can I start with zero investment?
Technically, yes. Models like affiliate marketing and Amazon Merch on Demand allow you to get started with no upfront investment since you don’t need to buy inventory. However, while you might not need to spend money upfront, you’ll need to invest time into building your listings, marketing your products, and driving traffic. Success still requires effort and persistence.
How do I find the right suppliers for dropshipping?
Research is key. Look for suppliers with a strong track record, positive reviews, and the ability to meet your shipping requirements. Platforms like AliExpress or SaleHoo can help you find reliable drop shipping partners. Always start with a small order to test product quality and shipping times before fully committing to a supplier.
Is it possible to scale a business without inventory?
Yes, it’s possible and even easier to scale a business without inventory compared to traditional models. Since you’re not limited by warehouse space or upfront stock purchases, you can quickly expand your product range or increase sales without major cost increases. Using automation tools and third-party logistics allows you to handle more orders efficiently.
How can I differentiate myself in a crowded market?
The key to standing out is offering something unique—whether it’s top-notch customer service, exclusive designs, or a highly-targeted niche. Building a strong brand identity and leveraging social media or content marketing can also help you connect with your audience. For instance, if you’re dropshipping, focus on personalised customer interactions, or if you’re using KDP, ensure your cover designs stand out in the listings.
What should I do if a customer receives a damaged product?
If a customer receives a damaged product, act quickly. First, apologise for the inconvenience and offer to send a replacement or provide a refund. If you’re using dropshipping, work with your supplier to resolve the issue and ensure future shipments are handled with care. Excellent customer service can turn a negative experience into a loyal customer.
See you next week!
Selling on Amazon without inventory gives you the freedom to start your business with low costs and minimal risks. Whether you’re drawn to dropshipping, print-on-demand, digital products, or affiliate marketing, there’s a method out there that fits your skills and goals. Each option has its own perks, but they all provide a chance to grow your business without the headache of managing physical stock.
No matter which path you choose, having the right strategies and support can make all the difference. If you’re ready to take your Amazon selling game to the next level, Amazon selling experts at eStore Factory are here to help.
