Traditional retail businesses were required to have a storage space or warehouse to keep their stocks. Before selling and replenishing the items, retail stores must wait for orders to arrive and, later, perform time-consuming inventory to know how much they need to buy and sell.
These days, however, e-commerce stores can start offering products even without physically acquiring the items they’re selling. Thanks to the methods that’ll be discussed below, enterprising individuals can launch an online store without spending cash on inventory or renting out a store.
Drop Shipping
This e-commerce business method involves an individual running an online store that offers products sold by third-party sellers—either a manufacturer wholesaler—to fulfil their clients’ orders. This means all of the items are physically located in the storage facilities managed by the third party, who also packs and ships the product to the end users.
An online vendor only has to list the items on their own site. When a customer places an order, the seller receives the money to order the item to the distributor at a lower price. The latter also prepares the item and sends it to the seller’s customer, most of the time bearing the seller’s branding or logo. Put simply, in this business model, the seller acts as the conduit to the buyer and distributor or manufacturer. Some companies do offer drop shipping; if you’re interested, you can click on this URL to find out more.
Opening An Affiliate Store
If you want to supplement your stable income, you can launch your own affiliate store. This indirect online selling method is straightforward. And, like drop shipping, you don’t have to keep any physical item with you.
All you have to do as an ‘affiliate’ is to secure a partnership with companies and sellers that offer this type of program. Once an agreement is in force, particularly the commission rates and terms, you’ll act as a brand ambassador and promote the company’s products on all online channels. You can rave about the products on a blog, on your social media accounts, or on websites. When any of your subscribers or followers actually purchases any of the items you’re promoting, you’ll receive a commission fee. You can ‘apply’ to become an affiliate to as many products possible.
Selling Print-On-Demand Products
Running an online store using this method is a bit like the drop shipping strategy. Under this model, a seller will offer printable items to buyers. Products can be tote bags, pillow cases, towels, socks, blankets, mugs, and, of course, t-shirts.
Instead of a manufacturer or supplier, however, your third party will be the printing company, who prints out the design created by your customers. Hence, your e-commerce store should be connected to a do-it-yourself printing service that’ll process the order and ship the product to the client. As a seller, you’ll make money by charging extra for the printing services and the items used. Otherwise, you can use this scheme to build your own brand.
Offering Digital Products
Another possibility in maintaining an online store without an inventory is by selling digital products.
With digital products, everything is kept electronically, so you don’t have to maintain a physical storage area. Digital media can take various forms: e-books, videos, e-courses, and webinars, among many others. Subjects can vary, but, typically, they revolve around ‘how-tos’ about relationships, sex, self-improvement, and the like.
Before selling your electronic products, you need to be viewed as an authority on the subject, so you’ll have to do a lot of brand or product awareness campaigns, search engine optimization, and partnerships with subject matter experts.
Things To Consider Before Opening These Online Stores
Before deciding to push through with any of the ventures discussed earlier, you should study the market and identify which niche you want to dabble in. Your chosen niche should have a high demand and earning potential.
Next, choose your manufacturers or suppliers carefully, as you don’t want to end up losing your reputation from missed shipping or low-quality items. Finally, do some research and find out the cost of items you wish to sell. You don’t want to end up scaring customers away with unreasonably priced products, or lose money selling products with almost no mark-ups.
The Bottom Line
Engaging in these online activities do come with both advantages and downsides. For one, you can’t expect high returns because of the saturated market and fierce competition, unless your products are selling every few minutes or so. And, having no control over the fulfilment process, you may have to face complaints from impatient customers, fix mishaps done by the shipper, and so on.
However, the benefits generally outweigh the drawbacks. With low startup costs, you don’t have to spend a lot to purchase stocks, waste money from buying unwanted products, or rent out a warehouse before launching an online store without inventory.