As a budding eCommerce entrepreneur, you might be concerned about the costs of purchasing and maintaining inventories. Inventories you’re not even sure are going to sell. In this article you’re going to learn how to sell products online without inventory, technically, what you’re searching for is called “drop shipping”.
Dropshipping is a business model wherein you post or advertise physical products for sale online without any on-hand inventories, how is that possible, you ask? There are wholesales suppliers who are open to this type of relationship.
As you may be aware, the main drawback of a retail business, be it online or off, is inventories. It’s pretty hard to strategize if your capital is already tied up in inventories, especially, slow-moving inventories.
Selling products online without any inventory helps you avoid the costs of stocking up inventories that aren’t moving, which could easily lead to a failed business venture.
The business ideas detailed in this guide are real online businesses that you can scale without ever stocking physical inventories.
The easy part with eBay dropshipping is the fact that eBay has been around for quite a while, which is pretty much like Amazon (an online) marketplace, which means, they already have an established market of consumers who are ready to buy.
eBay started as an auction website which evolved into an online peer-to-peer marketplace. This means that anyone with an eBay account can sell products on eBay. As mentioned, the tricky part when it comes to an eCommerce business is that you don’t know whether or not a product actually sells, so the only way to find out is to actually list the products but tools like Zik Analytics do take out the guesswork. I’ve written a thorough guide on how you can find the best products to sell on eBay in a previous article.
From the get-go, eBay lets you list up to 50 items to sell with a free account but since eBay dropshipping is a numbers game, meaning, you have more chances of selling with more listings, you can upgrade your plan to list more, keep in mind that the more items you list, the higher your eBay fees will be.
The advantage of selling on eBay is that your items could sell without any form of external traffic or advertising, the disadvantage is that you don’t actually own the platform so you have less control compared to when you build your own e-commerce store. If you’re just getting started with selling products online without inventory, you may want to play around with eBay dropshipping first. The markup isn’t that great as compared to when you have your own e-commerce store but it’s a good learning experience.
The eBay Dropshipping Business Model
As a dropshipper, you basically flip products online. Most eBay dropshippers source products from retail stores such as Walmart, HomeDepot, Wallgreens, etc. Yes, people buy from eBay, products that are readily available in a big box store, I actually found it hard to believe when I first started dropshipping on eBay but then I realize that people who are buying on eBay may not have access to these stores in their localities. I have shipped products to as far as Egypt, and Bangladesh with eBay dropshipping. Shipping internationally could post a challenge when your dropshipping but there are companies that can receive your shipment locally in the US and ship them to customers anywhere in the world.
Software like Zik Analytics helps you find, manage, and monitor your virtual inventory so you don’t find yourself in a situation wherein your product sold yet your source is out of stock, which happened to me a lot of times when I was learning the business. If you plan on selling dropshipping with eBay, the most important thing that you have to look out for is your seller metrics; you have to ship the ordered items right away so you don’t get penalized for late shipments as this is the number one reason most eBay sellers lose their selling privileges. In other words, poor product fulfillment performance is the fastest way to get banned from eBay.
Another way you can source products to dropship on eBay is buy reselling products from AliExpress. You can find unique products that are not often found in the US or Canada with AliExpress dropshipping, shipping times can be challenging but in most instances, people ordering internationally are fine with waiting for a couple of weeks for their products to arrive.
Shopify dropshipping is seen as a more lucrative option compared to eBay dropshipping as it gives you more control having that you own the store, which is easily scalable since you can flood your store with paid traffic.
If this is your first time learning about Shopify, it’s a software platform that allows you to easily build your own eCommerce store without learning how to code. think of it as an out-of-the-box solution for those who aren’t familiar with website development or coding. Having a web developer build you an online store could easily cost multiple thousands of dollars, and you haven’t even launched yet.
Shopify allows you to have a working eCommerce store for proof of concept during the trial period of 14 days, then only $29 (US) a month thereafter. While a lot of people complain about having to pay $29 a month, it’s nothing compared to the amount of rent when you’re going to launch a brick-and-mortar store, with a more limited reach than your online store.
Since you’re interested in learning how to sell products online without inventory, you don’t need to buy inventories to sell through Shopify, you can do this by connecting apps like Oberlo to your Shopify store to dropship goods from AliExpress (China), or Spocket (US/EU). Obviously, AliExpress offers more selection than Spocket but if you’re looking to resell higher quality goods with faster shipping time, you can seriously take a look at Spocket as your dropshipping supplier.
The challenge of running your own eCommerce store, as most stand-alone businesses are lead generation. You need to learn how to drive traffic to your store, just like any type of online business, you will need an audience to sell to.
There are two ways on how you can drive traffic to your store, paid traffic or content marketing. If you’ve tried blogging, search engine optimization, or publishing YouTube content, you know that content marketing is slow, and it may take years before you get any sales from your store through content marketing, so if you’re serious about your Shopify dropshipping business, you have to learn media buying (buying ads), there are a lot of tutorials online on how you can advertise your products, or you can spy on your competitors’ ads and emulate how they do it by using social media ad spying tools such as Spy Ads.
This is the reason why you can’t start an eCommerce business without any capital because you either need your startup funds to purchase your initial inventory or to purchase traffic. Of course, you can get away with not buying inventories by selling products without inventories but you either need to pay for platforms like eBay to list your products, or pay for traffic if you’re launching your own eCommerce store.
Most Shopify drop shippers find success with Facebook and Instagram advertising, and it’s quite easy to spy on your competitor’s ads on Facebook. If you’re not sure what products to sell on your Shopify store, EcomHunt is a dropshipping product discovery tool that allows you to discover trending products you can sell on your store.
It helps you discover products and ideas based on items that sell on AliExpress, revealing information such as retail prices that other dropshippers are selling them for, so you see your potential income as well as the creatives and Instagram influencers that have promoted the item.
You can use this information to further evaluate whether or not the product is a potential winner by running your own tests and by spying on other stores that sell the item(s) you’re looking to promote.
The best way to do this is by searching for the competing stores on Facebook. To do that, simply click on the “Hunt these Stores” tab on EcomHun under the “Saturation Inspector” field, and EcomHunt will reveal all the stores that are currently selling your potential product.
You then go to Facebook and search for these stores. Once you find the business page of each store, click on it, see their posts for ad ideas, then scroll down and find “Page Transparency”. At the bottom of the pop-up, click on “Go to Ad Library”.
The Facebook Ad Library will give you access to all the Ads that the store is currently running. Get ideas from these ads, don’t swipe the ads as it wouldn’t be good for anyone, not for you, and definitely not for your competing store. If you do that, both of you will lose money, and you wouldn’t be rewarded for your efforts. Play clean, and create a friendly eCommerce environment for yourself, your competitors, and your customers.
This is how you increase your chances of building a successful Shopify dropshipping store. Now, that you have access to your competitor’s ads, you can start testing ads yourself based on your competitors’ best practices, which increases your chances of becoming a profitable dropshipping business owner.
There’s more to Shopify dropshipping than what I’ve discussed in this section but this sets you on a profitable dropshipping journey. The key to crushing it on selling products online without inventory with Shopify dropshipping is in testing Facebook ads. I’ve shown you how you can spy on your competitor’s successful ads, so you get an idea as to what ads work, so you don’t start from zero but this doesn’t mean that your ads will work 100% from the get-go, you may need to tweak, and as I said, don’t copy the exact creative from your competitors, what you can do instead is to come up with your own version of those creatives (video/graphic).
If you’re not the creative type like I am, you can hire people off Fiverr to design the creatives for you.
If you don’t have a Fiverr account yet, click here to open one (it’s free), login, then simply search for “drop shipping video ads”, or “dropshipping graphic design”. Again, the goal isn’t to copy your competitors’ creatives but to emulate what’s already working, and since you already know that they work, you just test how you can make these creatives work for your dropshipping store as well.
Print on Demand
The print-on-demand business model is somewhat a bit similar to the dropshipping online business model, which if you come to master will be a bit of a smoother business than physically dropshipping products. Well, you still sell physical goods with print on demand but in most instances, shipping and returns are much less of a headache than compared to dropshipping physical goods, especially if you’re dropshipping from China.
The shipping scene has slowed down tremendously when the pandemic hit, which is quite understandable since logistics is one of the most heavily impacted industries due to stricter measures on the cross-border crossing. Non-the-less, dropshipping is still alive, and profitable.
If you’re creative or if you don’t mind paying for design, print on demand may just be right for you. With print on demand, you can sell products without inventory too, you just promote design images plastered on virtual merchandise. Once a customer orders your design, print-on-demand companies like Printful, and Printify, can have these orders printed, and shipped to your customers for you. If you have customer returns, you can return the merchandise to your supplier, which in this case is, the print-on-demand company that you’re working with.
Again, a print-on-demand business is technically a drop shipping business where you sell products without any inventories, the only difference is that your products are actually created the moment someone orders your designs. You can sell shirts, hoodies, bags, necklaces, shoes, mugs, and virtually any physical product you can come up with.
E-commerce Affiliate Marketing
Affiliate marketing is one of the first business opportunities in the early days of the internet, and it is alive and well up to this time. What lured most internet marketers to affiliate marketing back in the day was the ability to sell other people’s products online without holding inventories. Come to think of it, it’s pretty much what you’re trying to do with physical goods, and today, you actually can!
There are a lot of physical product manufacturers that have affiliate programs, one product that comes to mind as I’m writing this article is Organifi. Its affiliate marketing is hosted through Clickbank, which was a digital good-only marketplace but now offers physical products as such as well.
Ecommerce isn’t just about selling physical goods, it’s about selling any type of product, be it physical or virtual such as course, ebooks, software, games, sweepstakes, video subscriptions, etc.
The key to making profits selling products online without inventories is by mastering the ability in being able to drive traffic to these offers, and as an online marketer, that’s your primary function.
Affiliate marketing allows you to sell products you don’t own, you’re just a middle man. Someone who connects the buyers with the sellers or product providers. As an affiliate, all you have to do is drive traffic, you don’t need to create the products. In saying this though, it’s important that you focus on promoting quality products, and services that you actually believe in, or have used yourself.
Far too many affiliate marketers who are just in the business for the sake of earning a commission without ever caring about the benefits that their customers get out of the transactions.
So whether you’re manufacturing, dropshipping, or just connecting an audience to a product, focus on only advocating quality products because it’s not only beneficial to your customers, it’s also the key to a long-term, profitable business that can replace your full-time income.
There are a lot of affiliate networks that offer physical goods affiliate offers. The most challenging part of an eCommerce dropshipping business model aside from the product research, and testing is customer support and returns.
With eCommerce affiliate marketing, you don’t deal with customer support, nor returns, all you have to do is drive traffic to offers, and earn your share whenever a lead purchases your promoted product(s).
You can find eCommerce affiliate marketing offers from Clickbank, Maxbounty, ShareaSale, and CJ (Commission Junction) to name a few.
To sum it all up, there are generally 4 ways you can sell online without inventory, and they are as follows:
- eBay Dropshipping
- Shopify Dropshipping
- Print on Demand
- Ecommerce Affiliate Marketing
eBay dropshipping allows you to sell online without holding inventories from an already established marketplace. This is the easiest way to start because you don’t need to build your own eCommerce platform. You can find profitable items to sell on eBay, either by doing manual research or by using dropshipping product research tools such as Zik Analytics.
While there’s no shortage of people making good money with eBay dropshipping, based on my experience, it’s quite competitive, and the margins can be quite small but if you’re just starting out, and has little to no capital to start your own eCommerce store or invest in inventory or advertising. eBay dropshipping can be quite a good venture to look into.
Shopify empowers a serious wannapreneur into a real entrepreneur without the usual costs of starting a real-world (offline) business, with a far wider reach if you have some dough to burn into paid advertising. Comparing Shopify dropshipping with selling on eBay, you own the platform but since no one knows about your store yet, expect that there’s no traffic at the start of your venture.
As you may know, there are generally two ways to drive traffic on the internet, one is through content marketing, and the other is through paid traffic. If you’ve been trying to build a profitable business online for awhile now, you should know that content marketing takes time, so if you want fast results, you have to invest in paid traffic.
Most Shopify dropshippers, find success with Facebook advertising, and while there are other advertising platforms, Facebook has the widest reach by far, and has the ability to take your offer to people who are most likely to buy from your Shopify eCommerce store.
Print on Demand
Print on Demand uses pretty much the same approach and strategies as a stand-alone dropshipping store, the only difference is in sourcing your products. Most dropshippers who sell physical goods usually source their products from China. A print-on-demand dropshipping store can source products from the US, using print-on-demand fulfillment services by companies like Printful, and Printify.
The challenge with a print on demand business is in determining as to whether or not a design would sell, again it all boils down to testing, and the best way to test is to sell the product, if people buy them, you know it’s a winner. If not, then you just move to promoting your next design.
If you’re building an eCommerce store, you will have to invest time and money with learning and paying for advertising, if you’re afraid of losing money in advertising, you may look into a different kind of online business, like blogging or YouTube content production which utilizes content marketing as a means of attracting traffic. Don’t get me wrong, you can attract traffic to your eCommerce store but it takes time. The time span before your business is profitable could range from a few months to a few years.
It really depends on your preference really, either you pay for traffic, or invest in free traffic; you pay either way!
Ecommerce Affiliate Marketing
If you’re trying to start an online business, you have to learn online marketing. Internet business isn’t like opening a storefront on the corner of Fifth Avenue, where you could expect foot traffic. Online, you have to drive traffic to your website, or store, not unless if you’re selling on Amazon, which you can’t if you’re trying to sell a product without holding inventories.
Ecommerce affiliate marketing lets you sell products you don’t own, an you don’t have to process the order fullfillment, nor tend to customer service concerns. All you have to do is match the traffic to physical goods that other people are selling.
It’s pretty much affiliate marketing, you’re just promoting physical goods. At the end of the day, if you have a few conversions, you can pretty much make a living out of it.
Much like any other affiliate marketing business, you either invest in paid traffic or build a platform to attract traffic through content. Every time someone buys from your affiliate merchant, you make a commission.