Shop of Nothing

October 17, 2011 11:57 AM

(UK) I want to sell things but I don't want to have to buy or hold any stock. Possible? Is there a name for such a business? How is it done?

I've heard of affiliate programs but I don't want a site that simply redirects to other sites and I'd like to earn a little more money from the sales than just a small percentage of commission.

What I am looking for is a way of selling products without having to actually buy or hold any stock.

I would own the online shop. Customers would buy through me and the orders would be sent to a third party who would then dispatch the products to the customer.

Crazy idea? Does such a business model exist?

posted by run"monty to work & money (6 answers total)

You're looking for drop shipping.
posted by decathecting at 11:58 AM on October 17, 2011 [2 favorites]

In the real world its called merchant trading. Unless you curate the selections after testing and reviewing or some such value add, I don't see how it might work online unless your suppliers weren't online at all?

The closest definition a quick search found was from merchant trade finance (refering to debts) but the basic concept still applies without the need for the debt/financing aspect:

In merchant trade finance, the client sells his product to the merchant trader who then sells it to the client’s customer. The client at the same time delivers the product to the customer, effectively acting as agent for the merchant trader. The merchant trader pays the client up to 80% of the invoice value and the balance, minus charges, on payment by the customer.
posted by infini at 12:04 PM on October 17, 2011

A fair amount of Amazon Marketplace sellers are (were? maybe they cracked down on this?) essentially drop-ship fronts like you're describing.

For this to work, at the very least, you need to be able to source a single product from as many vendors as possible, so you don't get stuck unable to produce a good you're claiming to sell.

You're also potentially wading into waters that are already crowded with competitors who are much better at SEO/SEM than you are, and that skill is key for doing this in volume. If you're thinking of this in fairly niche terms, or you already have a relationship with your audience you want to leverage, or you're looking to add value by bundling items, it's possible to do this, but bear in mind how slim your margins are.
posted by mkultra at 12:19 PM on October 17, 2011

I know a guy with a humorous graphic design blog who uses cafepress to sell t-shirts of each week's most popular images. Cafepress prints and ships the items. I don't think he makes much money, but his business model is pretty similar to what you are looking for.
posted by DaveZ at 12:46 PM on October 17, 2011

Drop shipping is one business model that fits your description.

If you are interested in exploring this further, The Four Hour Workweek by Tim Ferriss is an entertaining starting point.
posted by dantodd at 7:24 PM on October 17, 2011

I guess the question of 'why' comes to mind. What are you hoping to have there? A business can operate, make money, and make a profit in an infinite number of ways. If you're looking to avoid storing / shipping physical products, there are plenty of online products or services to sell. E-books, web programming, custom-printing, etc. - the key is to start within a niche. Otherwise, you're competing with bigger businesses that have been in the field for a lot longer.

Do you have any experience that would make a good e-book? If so, there are plenty of places and ways to sell that - requiring no (or very little) overhead or physical shipping in the process.
posted by chrisinseoul at 4:47 AM on October 18, 2011