Dropshipping and print-on-demand are two e-commerce models that have grown in popularity over the past few years. Both allow brands to sell their products directly to customers while cutting out the middleman.
They eliminate the need for a warehouse and inventory, which saves time and money. Although both dropshipping and print-on-demand have many similarities, they have some notable differences.
In this article, you will learn what these two business models look like from an e-commerce standpoint. It’s not as cut-and-dry as knowing if you should use Amazon, Etsy, Shopify, WooCommerce, and other Marketplaces. Let’s get started.
What is Dropshipping?
If you’ve worked in e-commerce before, you’ve probably heard the term “dropshipping” thrown around. At its core, it’s a business model where businesses (re-sellers) purchase products from a third-party supplier and then re-sell those products to their customers without holding stock.
Dropshipping means no risk of inventory going bad, no warehouses to maintain, and no overhead costs associated with product storage, shipping, etc.
Customers purchase online and enter their payment information for most e-commerce businesses that operate on a dropshipping model. Then the order is fulfilled through the original supplier. Orders are often packaged in the supplier’s box and delivered to the customer.
What is Print-on-demand?
Print-on-demand is a process that allows e-commerce companies to create as few or as many units of a product as they need. The company will set up a printing operation and store the materials either on-site or at a third-party facility.
Once an order is placed for the product, the machinery will churn out the exact number of units needed for the order. The products will then be bundled together, packaged, and sent to their final destination.
In e-commerce, this is often referred to as “made to order” or “made to sell” products. There are many advantages to selling print-on-demand products over inventory-based products. These include reduced costs, fewer product failures, higher customer satisfaction, and increased sales.
Which is better: Dropshipping and Print-on-demand?
There is no “right” model to take in e-commerce. There are a lot of factors to consider, and you may find that you gravitate towards and excel in a combination of both.
Which model is best for you will depend on your strengths, weaknesses, and goals for your business. For example, if you want to focus on a product that doesn’t exist, it makes sense to go with print-on-demand.
You can also seek out a supplier who can make custom products for your store. On the other hand, if you want to focus on a product that is popular and in demand, then drop shipping is the way to go.
The key is to make sure you choose a product that’s easy to source and scale up as your business grows. You can read more about the differences between dropshipping and print-on-demand below.
Pros of Dropshipping
Scalability
If you choose to go with drop shipping, your ability to scale your business is endless. This model allows you to start with a tiny investment and a few products and scale up as you see fit. It’s easy to keep up with demand when you’re not sourcing and holding inventory, so you can really focus on marketing and customer experience.
Timesaving
If a product is out of stock, you can’t sell it. With drop shipping, you don’t have to worry about keeping track of inventory and tracking down goods when they run out.
Customer experience
With drop shipping, you can guarantee that your customers’ experience is frictionless. Since you don’t have goods sitting in a warehouse, you won’t waste time fulfilling orders that arrive at the wrong time.
Easy to start
If you choose to go with dropshipping, you can start selling right away. You don’t have to worry about sourcing goods and finding a supplier.
Risk-free
If you choose the right supplier, you can have a completely risk-free relationship. You don’t have to worry about keeping stock or managing defective goods.
Consistent branding
If you go with a dropshipping model, you can create consistent branding of the board. Your customers won’t be able to tell that the products are coming from different sources.
Cons of Dropshipping
Customers may be confused
You may confuse your customers when you’re selling products that are not in your inventory. They may wonder why it takes longer to receive their order or why they don’t have options like “next-day shipping”.
Products that never run out
If the market is saturated, you may have trouble finding a product to sell. Certain industries such as beauty have products that are sold all the time, so it’s difficult to find a product that is always in demand.
Loss of control
If you go with a dropshipping model, you are at the mercy of your supplier. They may go out of business, or you might not be happy with their customer service.
Risk
If you choose a bad supplier, you may have a lot at risk. If they run out of stock, don’t pay their bills, or deal in faulty goods, you could be out of luck.
Low-profit margin
Since you’re sourcing goods from third parties, you won’t be able to make as much profit as you would if you were printing the goods yourself.
Pros of Print-on-demand
No excess inventory
With print-on-demand, you only produce the amount of product that you know will sell. This means no excess inventory sitting in your warehouse.
Cost savings
You’ll be able to produce quality goods at a fraction of the cost.
Unique, custom products
You can create unique products that are perfectly tailored to your customers, thanks to this model. You can also make custom products for your business.
High quality
Print-on-demand means that you are producing items one at a time with high-quality standards. This means your customers will get a high-quality product every time.
Quick turnaround time
With print on demand, you don’t have to worry about keeping an inventory stocked. You can simply produce and ship the products as soon as they are ordered.
Consistent branding
If you go with a print-on-demand model, you can create consistent branding of the board. Your customers won’t be able to tell that the products are coming from different sources.
Customer satisfaction
With print on demand, rest assured that your customers will get their product quickly and with the highest quality.
Brand reputation
If you go with print-on-demand, you don’t have to worry about your suppliers or keeping an inventory. You can focus on building and growing your brand!
Cons of Print-on-demand
Higher startup costs
One of the biggest disadvantages of print-on-demand is that you will need to invest in a printing machine. This means that upfront costs will be higher than if you were to go with dropshipping.
Increased customer wait time
Print-on-demand can sometimes take longer for customers to receive their orders. This is because of the time required to produce and package the products.
Quality control
If you go with a print-on-demand model, it’s essential to ensure your product is of high quality every time. This means you may hire a team of quality assurance specialists to monitor the products and ensure they meet your standards.
Brand consistency
Since you won’t be able to control which images and branding are on your products, you won’t be able to create consistent branding of the board.
Lose control
With print-on-demand, you are at the mercy of your supplier. They may go out of business, or you might not be happy with their customer service.
Bottom line
Dropshipping and print-on-demand, as you can see both have their unique advantages and disadvantages. Each model has its own set of strengths and weaknesses.
Laser Chili is a print-on-demand solution, a great way to help you save time and money. We help you with your business in many ways. We listed some key benefits you will get if you use our print-on-demand solutions.