If you’re considering starting an e-commerce store and wondering whether dropshipping or print-on-demand is right for you, you’ll need to evaluate design skills, profit margins, and more. Today we’ll cover each type of business model as well as some advantages and drawbacks of each.
What is Dropshipping?
Dropshipping is a type of e-commerce business model that allows a business to sell products without the need to carry its own inventory. They connect with a supplier and manage relevant aspects of the business before the sale. Some of these include customer service, store design, and more. However, once the sale occurs, everything else is in the hands of the supplier – who fulfills the order and ships it directly to the customer. The store owner gets to pay wholesale prices from the supplier, allowing them to keep the difference from the sale. This allows e-commerce stores to open without a high upfront cost and will enable sellers to earn money online passively once the initial setup is in place – with very little maintenance.
What is Print-on-Demand?
Like dropshipping, print-on-demand allows online sellers to create an e-commerce store without high upfront costs by not carrying inventory. The main difference here is that these are printed items designed by the seller – commonly, products include customizable T-shirts and coffee mugs. Like dropshipping, the supplier delivers the product to the customer after they place an order, allowing for a passive income for the store owner.
Advantages of Dropshipping
Below we’ll cover a few advantages of running an e-commerce business that utilizes a dropshipping model.
1. Easier Startup
The main difference between dropshipping and print-on-demand business models involves the design printing on products in a print-on-demand. For this reason, the startup is simpler for dropshipping businesses as it doesn’t require any design experience or connecting with a designer. This also saves time you would otherwise spend perfecting designs as a print-on-demand business. In a dropshipping model, the products already exist without any input needed to design them. This also saves money you would have spent hiring a designer if you weren’t designing the products yourself.
2. Quicker Order Fulfillment
In many cases, your average order fulfillment will be faster with dropshipping than if you ran a print-on-demand business. Why? The supplier usually has the product ready to ship once they receive the order. To contrast, with print-on-demand, the order will still need to print after the order is received, slowing down the process. With dropshipping businesses, once the order passes to the supplier, they can often ship it out much more quickly and get it into the hands of the customer. However, keep in mind that depending on where your supplier is shipping out products from, the shipping time may be lengthy.
3. Greater Profit Margins
In a dropshipping business model, there is less work to be done on the supplier’s end than in a print-on-demand business. After all, the products are not customized per your shop’s specifications and designs as they would be in a print-on-demand store. As a result, products are ready to be shipped out right away, which can reduce the cost per product. Of course, lower costs per product can easily translate into greater profits for you! This model also allows you to sell products with a higher price point – no customization necessary.
Disadvantages of Dropshipping
Like everything, dropshipping comes with its drawbacks. Here are a few things to remember if you opt for a dropshipping model for your e-commerce store.
1. Less Opportunity for Building Brand Recognition
Thanks to the customizability of print-on-demand, store owners can build a brand that is recognizable to customers. Without that customization option, building a brand identity may prove more challenging. Even more, your products may look highly similar to what is available in other stores. While it’s possible to succeed in this model, it’s trickier than it would be with a print-on-demand business which comes with a built-in customization option.
2. More Competition
As this article covers, the main difference between a dropshipping business and a print-on-demand business comes from the customizability and design element required of the latter model. For this reason, there is likely to be less originality offered in your pre-determined items, making the competition much higher. How will you convince your customer to purchase your product over another store? The more competitive nature requires you to find a unique factor that your business offers over others if you want customers to choose your products over those of another store.
3. Product Design Comes As Is
With a dropshipping model, the product design is already pre-determined, and you don’t have any control over it like you would if you were running a print-on-demand business. Depending on the product, this may not prove problematic, but it may not stand out from other similar products or have any unique qualities that come with a customized product. It’s possible that you can discuss with the supplier and be able to get your logo on the product, but that doesn’t always give you enough of a stand-out quality to be able to compete with the competition. Because products come already designed, store owners must be highly selective in the items they choose to put in their online stores.
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Advantages of Print-on-Demand
Now that we’ve covered the advantages and disadvantages of dropshipping, let’s talk about print-on-demand and what you can expect from an e-commerce store following this type of business model. Here are some of the pros you can look forward to if you opt to open this type of online shop:
1. Easily Customize Designs
If you’ve read this far, you’re probably aware of the benefits of customizing your designs! This allows you to create a stand-out brand and provide unique custom products, reducing competition. This business model will enable you to give numerous customization options for customers and provide products that they wouldn’t be able to find anywhere else! You can also allow customers to incorporate something special of theirs into the product – like their name. Thanks to the print-on-demand model, you won’t need to print a large batch no one else will have any use for — you only need to print the one the customer bought!
2. Test New Designs with Ease
As you don’t have to pay for the product until the customer orders it, you can easily test new designs to see how your customers respond. Based on the orders you receive, you can find out what is working and what isn’t through experimentation and adjust your design offerings in your store accordingly. By working with a print-on-demand supplier, you aren’t required to purchase products in bulk that may or may not sell – as you might be outside of a dropshipping or print-on-demand model. What does this mean? Less risk!
3. Easier to Test Quality
With a dropshipping model, you might be selling different types of products, making it more difficult to order one of everything for yourself to test its quality. To contrast, with a print-on-demand business model, there are typically fewer products, making it easier to test the quality. In many cases, as the owner of a print-on-demand store, you might be selling the same product with different designs printed on it. This allows you to order one item (for example, a mug or T-shirt) to see the quality for yourself, even though your store has multiple designs available to print on that product.
Disadvantages of Print-on-Demand
Before you get started on setting up shop with your print-on-demand business, here are some of the drawbacks you’ll want to be aware of:
1. Requires Design Skills to Succeed
Whether or not customers will opt to purchase your product comes down to your design. This means that you (or a designer you hire) will have their design skills put to the test. While this provides an excellent opportunity for a stand-out product, it won’t matter if the design doesn’t translate to customer sales. When deciding whether or not a print-on-demand business is right for you, this is a significant factor you need to consider. Having graphic design skills, or hiring someone that does, to create products that will be successful in your store is essential to making your store take off.
2. Limited Product Offerings
As the nature of a print-on-demand business requires that the products in the store be customized and printed on, this naturally limits the types of products the store can offer. With the print-on-demand model, you can sell a wide range of items like mugs and T-shirts that come in as many designs as you would like to list. However, the types of items you can provide are much more limited than possible in a dropshipping business. This is because a dropshipping store does not require that element of customization and therefore doesn’t have the same limitations on the products they can list.
3. More Costs
Both dropshipping and print-on-demand businesses benefit from not having to store inventory and relying on the supplier to fulfill the order after it is placed. However, in the case of print-on-demand, more expenses are often incurred during this process than might be for a store owner who uses a dropshipping model. As there is more work on the supplier’s end during this process, this often results in the costs for the product being higher than what a seller might find if they were using a typical dropshipping method.
Frequently Asked Questions
Is Dropshipping Better Than Print-on-Demand?
The answer to this question, of course, is: it depends. You need to evaluate your strengths and goals, keeping the pros and cons of each option in mind, when deciding which option is better for you. The answer differs depending on your skills and the type of business you want.
Is Print-on-Demand More Profitable Than Dropshipping?
Dropshipping businesses benefit from a better profit margin. However, print-on-demand businesses have the potential to be more sustainable long term. If you put in the effort to establish a brand for your store, you might see more profits at the end of the day.
Final Thoughts
E-commerce sales are huge. If you’re looking to get in on the action, there is no one-size-fits-all answer as to whether those looking to start an e-commerce store should opt for a dropshipping or print-on-demand model. However, when it comes to print-on-demand and a wide range of customizable items, we at The/Studio are here to provide excellent, professional products that come at a low cost-per-item and endless options for personalization!
