Starting an online shop is very easy these days. The biggest cost item at the beginning is usually the warehouse. But you can successfully run an online shop even without a warehouse. The biggest advantage then is that you often do not have to invest heavily in inventory and you do not need any storage space. Everything that has to do with the warehouse is in most cases handled by a partner or supplier. In this blog we highlight four ways to start an online shop without a warehouse .
DropShipping
DropShipping is a well-known form of e-commerce that does not require a warehouse. When a customer buys an item in your online shop, you place an order with your supplier. The supplier then sends the item directly to the customer. As a seller, you will not even notice it. The customer, on the other hand, does not notice that you, as a DropShipper, are working with a DropShipping supplier.
However, as the seller, you are responsible for both the sale and the item. The customer finally made a deal with you. So make sure you really know what you are selling. Since any returns will be sent back to you, it costs you as a DropShipper a lot of time and money to send the returns back to your supplier. You should therefore place a test order with your supplier in advance. In this way you can see whether the article meets your requirements and whether it is delivered on time.
Tip: Of course there are also returns in an online shop. It is probably not worth sending the returns back to your DropShipping supplier because you will then incur additional shipping costs. Therefore, offer these articles again in your online shop if possible. When it comes to sale, you can send the items to the buyer yourself.
DropShipping is an interesting solution for many startups. Since you do not need any stocks, you also need relatively little start-up capital at the beginning.
2. Digital products
Another way to start an online shop without a warehouse is to sell digital products, i.e. products that are only available online. The products may then be stored in the cloud, but you will definitely not physically notice any of these products. There are currently many types of digital products sold online such as e-books, (stock) photos, films, subscriptions and apps.
The advantage of a digital product is that it does not have to be physically shipped and the cost – unlike a physical product – is much lower. Since the product does not have to be sent, it is available to the customer immediately after he has paid. Another advantage of digital products is that development or sales are often automated. This means that your digital products are relatively easy to maintain.
Subscriptions, for example, are often automatic. If a subscription changes, for example the price, this is often a one-time adjustment that is then made automatically in the online shop.
Important factors in pricing a digital product are the knowledge, time, and work that goes into it. Of course, this differs from product to product and must be carefully checked before the digital product is sold.
3. Affiliate Shop
With an affiliate shop, you recommend other online shops on your own online shop. The aim of an affiliate shop is to refer as many visitors as possible from your online shop to the shops that you recommend. If the referred customers achieve a conversion at the online shop in question, for example if they buy something, you will receive a certain share as commission. You have to agree with your affiliate partner how high the commission is.
Since your affiliate partner runs the warehouse, you do not have to buy and manage stocks at an affiliate shop. Setting up an online shop therefore costs you relatively little.
Of course, you have to ensure that you attract as many relevant visitors as possible to your online shop, to whom you can recommend something. That is why it is important to precisely define your target group. You may also need to plan a marketing budget to attract additional visitors to your online shop.
Tip: There are different ways to attract more visitors to your own online shop. Read more about that here.
4. Fulfillment and third party web shop
In a third-party webshop, a fulfillment center acts as a third-party provider to manage your warehouse, including packaging, shipping and any returns. However, the warehouse is yours. Examples of such fulfillment centers in the Netherlands are Bol.com and Amazon. These parties manage the inventory that you obtain from your supplier. These third party suppliers receive compensation for the work they do on your warehouse. This work consists of, for example, having a fulfillment center like Bol.com send your items to the customer when the order has been placed.
The advantage of this form of online shop without a warehouse is that orders can often be sent faster than with DropShipping. Nowadays, customers attach great importance to getting their goods quickly. In addition, you don’t have to worry about returns and other sideline activities when you work with a fulfillment partner.
The disadvantage of a third-party web shop is that the partner naturally receives compensation for warehouse management. Since you are responsible for purchasing, you have to keep an eye on the inventory and replenish it in good time. However, the supplier of your products can also take care of this.
In contrast to DropShipping, you need a lot of start-up capital for an online shop with a fulfillment partner, since you buy the stock yourself beforehand. Finally, there are often others who sell through a third party. Therefore, think carefully about which product you want to sell and see how many competitors you have.
So there are different ways to start an online shop without a warehouse . Each shape has its own peculiarities with the corresponding advantages and disadvantages. Therefore, check which option suits you best before considering an online shop without a warehouse.
