How to Sell Products Online Without Having an Inventory

An eCommerce business can operate without having inventory. These days it’s quite a common thing to run an online store without inventory. Drop shipping is the most common and popular method of selling products online in the absence of inventory. As with everything, there are a few disadvantages of drop shipping, it’s the most viable method of starting an online store without investing much capital.

What is drop shipping?
Drop shipping is a retail fulfilment process where a store doesn’t keep stock of the products they sell. Under this model, the online store list and accept customers’ orders through their own website or marketplaces but the third-party vendor supply and ship the products directly to the customer on the name of the seller once the shipping details are shared with them. The online store doesn’t have to keep stock of products and pay for the products only when listed product get sold and the money is received from the customers.

Advantages of Drop Shipping
The unique advantages that drop shipping model offer make it the first choice for the ones who are planning to dive into the sea of online business. Here are some benefits of using drop shipping:

• Make better your cash flow
As you don’t have to keep stock of the goods you’re going to sell, you don’t have to pay for the products you have listed until they are sold.

• Low investment
As you don’t have to buy products in wholesale or bear the manufacturing cost your own products, you start your online store without making much early investment.

• Scalability
With the drop shipping model, you can test products and quickly add new ones without ordering items in bulk. In a traditional method, there is a chance of loss if the products you have in bulk don’t do well and remain unsold.

• Increase the lifetime value of customers
As you don’t have to keep products in stock, you can list more products and add products, as well consistently offering the customers a wide selection of products. And there remains an excitement among the customers to see the new collections you have added making them return to your store.

• Reduce costs
When you have your own inventory, you need to bear costs of lot of factors. Apart from investing money in buying products in bulk, you need to spend money on buying space for storing products or taking rent for the same, assign employees to manage the products etc.

• Unlimited inventory
The drop shipping business model helps retailers as well as suppliers deal with inventory distortion. When you use this model, you can gain access to virtually unlimited inventory with dealing with problems out-of-stock products and over-stock clearances.

The other benefits that drop shipping offers:

• You can focus your efforts on other areas such as customer service and marketing.
• Your product range is not limited in quantity as well in quality.
• There is no need to manage and organise inventory.
• You don’t have to pack and ship your orders.

Though there are disadvantages associated with drop shipping business model, the advantages are much heavier making it a perfect choice for the online sellers who wants to run their business without inventory.