2. Amazon FBA is another way to sell products online without inventory
FBA is an acronym for Fulfillment With Amazon. FBA is a relatively new program, but it’s already causing ripples in the e-commerce world. It’s a smart way of selling your products fast without managing your inventory.
Here’s how FBA works. You ship your inventory to one of Amazon’s Fulfillment Centers situated near your clients across the world. Amazon will store your products securely. You’re at liberty to send as much inventory as you want. You then have to create an Amazon account and list your products. When a customer notices and likes your product, they will place an order. Amazon takes care of everything from customer support, selling the product, shipping, receiving payment to returns. This program is advantageous because you get access to a ton of customers available on Amazon. The downside to FBA, however, is that you have to abide by Amazon’s terms and conditions, not to mention they take 15% percent of your sales as commission, including 10% to 15% fulfillment. On top of all that, it’s much harder to build your brand on Amazon because customers assume that the products come from Amazon.
3. Utilize A 3PL to sell products online
3PL stands for third-party logistics. It’s, essentially, a layer in your supply chain that aids you with your logistics. To understand how 3PL works, take a look at this scenario. You make a product and deliver it directly to the customer. That, ideally, is a 1PL. If you decide to start utilizing shippers (middlemen), that’s essentially a 2PL. If you decide to deliver your products to a warehouse, which then ships to the customer on your behalf, then that’s a 3PL. A 3PL is, essentially, a warehouse that helps you with distribution. A 3PL company will charge you for the storage, picking, packaging, and shipping of your products. The upside to 3PL is that you have the opportunity to bring your brand to the next level because you have total control over your customer flow. Your margins are normally more than 50% which gives you a lot of flexibility on advertising. The downside to 3PL is that you have to purchase the goods beforehand and you have to market the products yourself.