Most people who desire to beginning an online business concern are hesitant to sell physical products online because they have a fake impression that you have to store and transport all of your own products.

Only did you know that you can run a successful ecommerce business organisation without carrying any inventory at all? In fact, information technology's pretty straightforward to run a full blown online store without worrying nigh storing or aircraft anything concrete at all.

Here are three ways to exercise exactly that.

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Yous Can Dropship

A dropshipped online store is a type of ecommerce business concern where yous you accept orders on your ain website, but your vendor or distributor is responsible for aircraft the product to the finish customer.

As a result, you don't have to comport whatever inventory at all. You simply act as a heart human being between the benefactor and the buyer.

Hither'south how it works.

  • A customer finds your website online and places an gild
  • You receive the money from the customer and immediately place an club with your distributor at an agreed upon wholesale price.
  • The distributor sends the product to the end customer with YOUR visitor branding and logo. As a outcome, information technology appears equally if the product is coming from Yous and not the vendor

Sounds simple right? But as with everything in life, there are pros and cons to this business model.

The Pros

  • You don't take to bear inventory or transport out whatsoever orders yourself
  • The startup costs are actually low. There are no upfront costs for inventory. You merely demand a website and tin can outset taking orders correct abroad
  • The overall chance is negligible.

The Cons

  • The margins are usually super low (on the order of 10-thirty%)
  • Managing customer service can be a pain since you have no control over fulfillment
  • Your advertising options are limited considering the margins are low.
  • In that location volition exist many other stores selling the exact aforementioned products which will cause pricing pressure.
  • The ramp up to significant money will be much longer than a traditional store because margins are low.
  • You lot will probable take to rely on SEO and other costless methods of promotion.
  • Customers may need to be shipped divide packages if different dropship vendors are used on your store
  • Y'all need to connect to your vendor'due south database to determine inventory levels
  • You are responsible for driving traffic to your own website

Overall, dropshipping can be very bonny if you don't take a lot of money and if you program on having a long time horizon for your concern. In other words, it could take several years for your store to ramp up to significant profitability.

To detect vendors who are willing to dropship in the United states, you can utilize a service like Worldwide Brands but be prepared to put out a lot of content to rank your store in the search engines.

You Can Apply A 3PL

3pl

For those of you who are unfamiliar with the terminology, a 3PL is a 3rd party logistics visitor. Most 3PL services can handle the storage of your products in add-on to social club fulfillment. And in some cases, they tin even help with client support and product returns.

Here'southward what a typical order flow looks similar if you use a 3PL

  • You ship all of your products to the 3PL provider
  • A customer places an order on your website
  • Your website sends the gild to the 3PL
  • The 3PL ships the society to the stop customer.
  • You pay the 3PL a monthly fee in add-on to a per order toll for fulfillment.

The online store/3PL philharmonic looks and behaves very much like a traditional online store with inventory except that you lot don't have to store or fulfill the orders yourself.

The Pros

  • You don't accept to store any inventory or ship out orders yourself.
  • You have full control over your customer flow.
  • Your margins are normally l% or higher which gives y'all more flexibility on advertising

The Cons

  • You have to buy your goods up front
  • You are responsible for driving traffic to your own website

Overall, if you want to start a more than traditional online store but don't want to worry about inventory or fulfillment, and then using a 3PL might exist a good option for you lot.

Here's a list of 3PLs to consider if you make up one's mind to go this route along with what to look for in a expert logistics partner.

  • EFulfillmentService.com – A no frills fulfillment house that caters to pocket-sized businesses. They don't need for y'all to take a corp or LLC in the United States. Generally easy to piece of work with.
  • ShipMyOrders.com – A fulfillment service very similar to EFulfillmentService.com. They cater to pocket-size businesses. In that location is no minimum on monthly transactions
  • WarehousingAndFulfillment.com – A fulfillment service very similar to EFulfillmentService.com catering to small-med businesses.
  • InFifthGear.com > 300 packages/month – These guys can take on high bear upon products. For case, they can practise personalization, engraving etc… But they generally are simply interested in shops that can generate at least 300 orders/month.
  • 3plsolutions.co.uk – An option for those shipping in the UK
  • Directly-Outbound.com – A fulfillment service catering to small-large businesses.

Quick Tip: Amazon is also a 3PL. If you are already selling on Amazon using FBA, you can too have Amazon fulfill the orders from your own website. The only downside is that your goods will exist shipped in an Amazon branded box unless you pay an extra fee.

You Tin can Use Amazon FBA

Amazon FBA
Right at present, Amazon FBA is the virtually popular choice amongst online sellers. Amazon FBA stands for "Fulfillment By Amazon" and hither's how it works.

  • You ship your appurtenances to Amazon's warehouse
  • Yous listing your products on the Amazon marketplace
  • A client places an order on Amazon
  • Amazon handles storage, fulfillment and all of your customer support

Going the Amazon FBA route is extremely bonny because not just does Amazon have care of EVERYTHING, but you also accept access to Amazon'southward vast audience of buyers.

However the principal downside is that you have to obey Amazon's rules and they also have a pretty sizable clamper of your profits. In addition, it's much harder to establish your brand on Amazon considering people remember that they are ownership from Amazon and not you.

Overall, hither are the pros and cons

The Pros

  • Once you transport your products to Amazon, yous don't have to do anything else. Amazon takes intendance of sales, shipping, returns and customer service
  • Amazon's marketplace is and then big that you will probable generate sales right away

The Cons

  • Amazon takes a sizeable chunk of your sales. (15% of your revenues + x-15% for fulfillment depending on your product)
  • You have to purchase your products upfront
  • Your margins must be high to brand money considering Amazon takes such a large chunk of your sales. (Margins should exist > 66% which means you will likely need to import from overseas).
  • You lot have to obey Amazon's rules
  • You merely become paid every month. Amazon tin hold your money for any reason.
  • You accept to constantly monitor your listings from the competition
  • Amazon tin ban you at any time
  • It's difficult to establish your brand because you are building your house on someone else's property

The Amazon marketplace is so large that y'all definitely should exist selling on Amazon at some bespeak. In fact, I've had students make over 100K per calendar month selling on Amazon solitary.

But selling on Amazon can also be extremely stressful every bit well. Because the Amazon platform is super competitive, you accept to constantly monitor your products in case they become piggybacked or hijacked

In addition, there'due south as well the danger of getting inexplicably banned or shut down in case you become too many customer complaints.

My Recommendations

Most people's kickoff instinct is to gravitate towards dropshipping since it's cheap and gamble free. But in this day and age, dropshipping is getting harder and harder to execute successfully. Because you lot are selling someone else's products at a lower margin, you usually can't win based on price.

Instead, yous accept to do an incredible job of educating your customer and presenting them with an amazing shopping experience to go them to buy from you lot. For a bully example of a successful dropshipped store, check out my buddy Andrew's store at Right Channel Radios

In terms of deciding whether to sell on Amazon versus using a carve up 3PL, I heavily lean towards selling on Amazon through FBA and also using them as your 3PL. If y'all are worried near Amazon'south branding on the box, and then pay the extra fee to have it removed.

Chances are, you are going to be selling on Amazon anyway, so at that place'due south no reason to use 2 carve up fulfillment services that do the same thing.

In my listen, the simply reason to use a split up 3PL is if you lot crave special handling on your products. For example, smaller mom and pop 3PLs may be willing to bundle split products together or ready your products in a specific way that Amazon would not.

If you sell internationally, sure 3PLs may exist better equipped to handle international fulfillment. And finally, certain 3PLs may besides offer more bonny pricing than Amazon depending on your goods.

But no affair what option you go with, your end goal should exist to create your own branded business organisation. So even if you are seeing great results on Amazon, y'all should ever start your own website.

In this mean solar day and age, you don't always need to carry inventory or worry virtually fulfillment but yous still demand a brand.

Good luck!

photograph credit: Bycatch delivery

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Virtually Steve Chou

Steve Chou is a highly recognized influencer in the ecommerce space and has taught thousands of students how to effectively sell physical products online over atProfitableOnlineStore.com.

His blog, MyWifeQuitHerJob.com, has been featured in Forbes, Inc, The New York Times,  Entrepreneur and MSNBC.

He'southward also a contributing writer for BigCommerce, Klaviyo, ManyChat, Printful, Privy, CXL, Ecommerce Fuel, GlockApps, Privy, Social Media Examiner, Web Designer Depot, Sumo and other leading business concern publications.

In addition, he runs a pop ecommerce podcast, My Wife Quit Her Job, which is a acme 25 marketing bear witness on all of Apple Podcasts.

To stay upwards to appointment with all of the latest ecommerce trends, Steve runs a 7 figure ecommerce store, BumblebeeLinens.com, with his married woman and puts on an annual ecommerce conference called The Sellers Summit.

Steve carries both a bachelors and a masters degree in electric engineering fromStanford University. Despite majoring in electrical engineering, he spent a skilful portion of his graduate education studying entrepreneurship and the mechanics of running pocket-sized businesses.