How to Sell Products Online Without Inventory
Ever wonder how some people make a killing online and they do not have a warehouse full of product. In this article we will look at how to sell products online without inventory and make some money. I have tried and made money with these examples, they do work.
We will look at two of the best ways, drop shipping and affiliate marketing, both very different. First lets talk about what each one is and how they work. After you have read this information you should have a better idea of what each is and see if one is for you.
Drop Shipping
When you start drop shipping you look for vendors online that will ship product for you to a customer directly. Good vendors will not put their return address on the package, it looks like you shipped the item.
The process is to promote an item, sell the item, collect the money for the item, process the item with the vendor and have the vendor ship the item to the customer.
You can promote the item through E-bay or have a website. E-bay will let you list an item for sale for free, you will only have to pay fees when you sell the item. Cost will be very high for each sale until you start to sell a number of items.
A website will have more upfront cost and less back end cost. You will have to pay for a domain name, get hosting and set up website to get some traffic. When you sell an item, your only cost will be the cost of the item and the shipping cost, no fees.
Let’s give an example of a RC car that is found on a drop ship company for $27. Shipping cost for this item will be $12.99 from the vendor. No other cost from the vendor. Now lets look at the associated cost for each type of sale.
E-Bay will cost nothing to list the item. When the item sales you will have $4.50 E-Bay fees, $1.75 in Pay Pal fees. Your potential profit it you sell for the recommended price of $49.99 is $3.75. The item is listed for sale on E-Bay when the article was written at $48.63, profit at this price is $2.55. The chances of selling an item for full price on E-Bay is not very good, as most people look at it as a place to get a bargain.
If you sell on a website, the item will cost nothing to list, your time will include writing blogs to promote this item. You will have the cost of domain, hosting to defer out to all of your sales. The price of these items can be high, domains cost around $15 a year, hosting can run from free to $50 a month depending on where you purchase it at. So if you sell the item for $39.99 and shipping is $3.99 your profit will be $12.01 minus any money fees for each sale. Using Pay Pal you will have around the same fee, some credit card companies will charge a flat rate others will charge a percentage of the sale price.
Looking at these two examples of the same item, you can make money both ways, making a profit with E-Bay will require you to sell a lot of items at a low profit. Selling with a website can make more money per sale, takes more work up front, as you have to write articles that will be found on the internet to sell your item. See my method of training here for getting your articles found.
Some vendors will have customer service available to you for damaged or defective items. If you use a vendor make sure of the return and replacement policy or you can eat into your profits really fast with just one bad shipment, this has happened to me.
I have made money with drop shipping on E-Bay, you can too if you are very careful and pay attention to details. My friend Robert has some training on E-bay at this link. This is a two part training that is available on the Wealthy Affiliate platform.
Affiliate Marketing
Affiliate Marketing can be done with a website not on E-Bay. Finding something that you are passionate about, that you would like to write about will be the first step, this is referred to as a niche.
As there are many steps to a successful website, I will only cover the basics in this article. For a bigger overview see my recommended information here.
Once you have a website-domain name, hosting website setup- you can start writing articles about your niche. Once you have gotten a feel for writing, you can add some links to your articles to an Affiliate company.
So what is an affiliate company? Some companies will pay you to refer customers to them that make a purchase. You can find them by typing your “your niche and affiliate program” in goggle search, this will give you a list of companies that will be available for your niche.
If you have RC cars for a niche, you will write articles about these items and recommend the better ones. In your article you will leave a link to a vendor for the company you recommend, affiliate programs will give you these links with a code to give you credit for the sale.
Each vendor will have their own requirements for your website and payments. Most will require you to have some content and traffic before they will approve you. The payments will also be vendor specific, as each vendor will have it own percentage, minimum payout and number of days that you are locked in for any sales from this customer (cookies). Make sure that you read all the conditions for each vendor as each will be different.
I have built a website (Outdoorroomideas) that uses affiliate marketing and makes me enough money to pay for my online work and more. See the way that I learned how to make money online with a website here.
Pros
No customer service on affiliate items
No upfront cost on E-Bay, only pay when you sell
Money is made every day on the internet
Cons
Easy to lose money on items if not careful
Must calculate fees and cost to make money on each item
Drop shipping customer service is not always good, do your homework
Website or E-Bay what will work best for you
Determine what direction you want to go in will be up to you. Each has its own way to make money. I have tried both and still use both. I can make money each way and if I can you can with the proper training.
If you are just testing the waters, E-Bay is a good way to get your foot in the door for selling online. After you have sold some items and found out how drop shippers work, I would suggest trying the website method and make a bigger profit per sale.
Affiliate Marketing is the way to make money with a website without inventory, shipping or having to deal with customer service. I like this method and it makes me the most money per month and effort. It does take time to make your first sale, after that if you keep up the work the sales keep coming in without much effort.
My final thought
If you are looking for a way to make money on the internet, you need to learn how to sell products online without inventory. This method does work, it has worked for me. You have to use some common sense and have the knowledge that will help you go in the right direction.
I have used both methods in this article and have made money, I have also lost money. Knowing what I know now I would rather do affiliate marketing than drop shipping. I make more with less hassle.
If you would like more information on where I learned how to make a website and make money with that website see my post here.
Any questions or comments use the forms below and I will get back to you.