The Trick to Starting an Inventory Business with No Money

“How can I start an inventory business with no money?”

If you’ve read our guide on starting a business with no money, you know that funding doesn’t have to hold you back, and there are a lot of really cool businesses you can start that don’t need a lot of money at first.

But, most of these are service businesses.

What if you want to sell THINGS?

You need money to get the products you’re selling, don’t you?

Well, not necessarily (and I’m not even talking about dropshipping)

If you’re smart about it, you can even start a business selling products WITHOUT buying stock at first.

Sounds crazy?

Hear me out…

The secret to starting an inventory-based business with no money is to validate with pre orders.

“What does ‘Validate with Pre-Orders’ mean?”

Make a mock-up prototype of your product online and advertise it really well (using social media and a website) to get pre-orders.

Here are some free sites to create mockups:

1. Mockey: 5000+ FREE professional mockup templates for devices, apparel, packaging and more. You can also generate unlimited photos.
2. Visme: You can use drag-and-drop technology to add your own graphics to free mockup templates.
3. Mediamodifier: Another place for free mockup templates that you can customise with your own graphics using drag-and-drop. You can also download PSD files that you can edit in Photoshop.
4. Smartmockups: Create mockups in your web browser based on a wide variety of templates.

Advertising Your Product Online

Creating a website doesn’t have to be difficult and expensive, either – there are a lot of online tools that can help you to make a beautiful website without breaking the bank.

Social media marketing is a great way to get your website out there and make people want to buy your products.

Selling Your Pre-Order Products

You can then contact customers directly, get them to order and use their payments to get the inventory you need for the orders.

Be sure to give your customers a timeline for shipping and delivery, which includes the time you need to GET the goods, so that they know what kind of wait to expect.

However, by doing it this way, there will be a slight delay between your customer’s payment and them receiving the product, so it should only be temporary until you can afford to stock up on some inventory.

This is because you ideally want to get the products to your customer as fast as possible, to keep them happy.

The main idea of this strategy is validating your business idea before spending any money.

This way, you have no upfront costs, so you are able to technically start an inventory based business with NO MONEY.

Here’s how (and why) it works:

By selling products before creating them, you are able to be sure that there is actually a demand for your offering.

Pre-orders create cash flow that you can DIRECTLY reinvest into production, so you can grow your inventory without upfront costs.

The Lean Startup Method

This concept is based on the philosophy from “The Lean Startup”, a super helpful book for entrepreneurs written by Eric Ries. It is a great way to fine-tune your offering and get your business off the ground without unnecessary expenses in the beginning.

There are risks you should know about

Risk #1: Customers might change their minds about their purchase

How to Fix it: Offer refunds / order cancellations for a certain amount of time after the order so people can change their minds.

Risk #2: The production cost may be higher than anticipated.

How to Fix it: Add a little extra wiggle room to your pricing in case your costs end up being higher than expected.

“How do I gain trust with pre-orders?”

When you’re running pre-orders, you HAVE to communicate clearly with your customers if you want them to trust you and not think they’re being scammed.

Keep them updated on production progress and estimated delivery times, so that they know what to expect, and feel safe ordering with you.

BraveBrew’s Pre-Order Success Story

A great example of a business that successfully launched using pre-orders is BraveBrew, a really cool craft brewery business.

They created an online store and used a pre-order system, and made money even before their product launched officially.

Launch your business with pre-orders

If you’re looking to start a business selling products but you don’t have the funds just yet, the pre-order strategy is a great option for you, as long as you approach it strategically and stay honest and open with your customers throughout the process.

If you’re ready to start your business journey, you can take the first step and make it official by registering your business.