Hello there, @DanW1.

Thank you for taking the time posting in the Community. Allow me to help share some insight about changing your service item type to non-inventory. 

You can edit the Service item you created and change its type. However, if you're trying to replace the type of the default Service (Sales) item, you'll get this error message.

You have the option to rename it, but you're not able to modify its type. I recommend you create a new non-inventory item instead to get you back on track. I've attached an article about this for additional reference: Change Product and Service types.

That should point you in the right direction today. The Community is always here if you need more assistance with Product and Service in QuickBooks Online. I'll be delighted to be your guide once again. Wishing you and your business continued success.