The ability to offer items for sale on the Amazon marketplace without personally holding inventory is a business model centered on order fulfillment by a third party. It enables individuals and companies to act as retailers, presenting products to a vast customer base without the upfront investment and logistical complexities of managing a physical warehouse and shipping operations. This method contrasts with traditional retail, where vendors are responsible for procuring, storing, and distributing goods.
This approach offers several advantages, including reduced financial risk, lower overhead costs, and increased operational flexibility. Businesses can test market demand for new products without committing to large inventory purchases. Furthermore, it allows focusing on marketing, sales, and customer service while outsourcing storage, packing, and shipping. This streamlined approach has democratized access to the Amazon marketplace, allowing smaller businesses and entrepreneurs to compete with larger, established retailers. Historically, managing inventory was a significant barrier to entry for new entrants in the retail sector. This has significantly changed.
