We have already discussed the pros and cons of dropshipping vs. print-on-demand, but this article will give a detailed analysis of the pros and cons of dropshipping vs. print-on-demand in the e-commerce business.
In the fashion world, it’s challenging to know when to use one manufacturing method over another. This is especially true if you’re new to the industry and need to understand what different production methods offer.
What is Dropshipping?
Dropshipping is a method of eCommerce retailing where a store owner does not purchase or keep any inventory but instead has products shipped directly to their customers from a third-party supplier. The store owner does not purchase the product or take any financial risk associated with the product.
Instead, they simply list a product for sale, take payment from the customer, then have the product shipped directly to the customer from the third-party supplier.
The retail owner’s profit comes from the difference between the price they charge the customer and the price they pay the third-party supplier. Dropshipping is a very scalable, low-cost method of eCommerce retailing. It is also quite simple to set up, as you do not have to purchase inventory or have it shipped to your location.
What is Print-on-Demand?
Unlike manufactured goods, print-on-demand products are manufactured only after an order is placed. They are manufactured only after a sale, and the order quantity is set to “1”. This means that one piece is manufactured and shipped to the customer.
Because a print-on-demand supplier only manufactures a product after it’s been ordered, it implies that there are no upfront manufacturing costs or inventory risks.
If a product does not sell, it does not cost the retailer any money. A print-on-demand supplier will use a “just in time” type of production, meaning there is no inventory risk for the retailer.
The Pros of Dropshipping
The main advantage of dropshipping is that you don’t have to invest in inventory. This means you have no inventory risk. It also means that you don’t have to spend money on storing inventory, hiring employees to handle inventory or buying equipment to keep your inventory.
The only cost associated with dropshipping is what you pay the third-party supplier. Another advantage of dropshipping is that you don’t have to do any upfront production. If a particular item is not selling, you can stop the production of that item immediately.
This means you aren’t stuck with thousands of items you can’t sell. If you use dropshipping as your primary eCommerce retailing method, you will probably have a wider variety of products in your store. This is because you don’t have to worry about stocking products.
The Cons of Dropshipping
The main disadvantage of dropshipping is that it relies on third-party suppliers. If one of your suppliers goes out of business or you have issues with them, your company could suffer.
Because you don’t have control over the product, you may not produce the best quality product. For example, you may have to use a Chinese supplier to produce a lower-quality product.
Other cons of dropshipping are that you don’t control the packaging and the shipping time. Because the product is shipped directly to your customer from the supplier, you can’t control when it will be delivered. You also don’t have full control over the customer experience.
6 Reasons You Should Consider Dropshipping
- Low investment and risk. As we mentioned earlier, investing in a dropshipping business is much less than in traditional e-commerce businesses. This is especially true for inventory, as you don’t need to buy and store products in your warehouse.
- Test products and segments. Since you don’t have to store products, you can quickly test new products and segments and easily get rid of them if they don’t work.
- No shipping costs. In the case of drop shipping, you don’t have to pay for shipping. This saves your money and allows you to lower your prices and undercut competitors.
- Low competition. Since drop shippers don’t need to invest in marketing, they rarely own the first page on Google. This allows you to outrank them with ease.
- Access to niche products. Drop shippers have access to niche products that can be difficult to find elsewhere.
- Fast startup. You can start a business quickly by finding reliable drop shippers and listing products for sale online.
- No inventory risk. It is unlikely that your drop shippers will go out of business.
The Pros of Print-on-Demand
The main advantage of print-on-demand is that you can produce a wide variety of products. Because you don’t have to produce an entire inventory of products, you can make a wide variety of products. You also control the quality of the products that you produce.
You can decide what materials to use, which allows you to produce the best quality products. Another advantage of print-on-demand is that you can create products that are short-term or seasonal items.
For example, if you sell pet clothing and you notice people buy this type of clothing around Halloween, you could produce Halloween costumes for pets.
The Cons of Print-on-Demand
The main disadvantage of print-on-demand is that you have to pay upfront production costs. Because you are only producing one piece of each product, the prices of these products will probably be high.
Another disadvantage of print-on-demand is that you have to order far in advance. For example, if you want to produce Halloween costumes for pets, you will have to order those costumes at least six months before Halloween.
You have to predict what products will be popular many months in advance. This is difficult to do and can be risky, especially if you don’t have any experience in the industry.
Because you have to pay for each item as you order it, you will also have higher costs associated with each item. This will probably result in higher retail prices, which can hurt your sales.
Dropshipping vs. Print-on-Demand
Both methods have advantages and disadvantages, which is why it’s important to understand dropshipping vs. print-on-demand before choosing a strategy for your e-commerce business.
5 Reasons You Should Consider Print-on-Demand
- Cost-effective. It eliminates that risk by charging based on the number of copies you print. You can use the same design for both wholesale and retail sales, reducing costs. And allows you to produce a single product that is suitable for both types of buyers.
- You can sell unique, one-of-a-kind designs. It allows you to offer one-of-a-kind designs as part of your product selection. POD enables you to create each item to order.
- Print-on-demand helps you reduce inventory. POD helps you avoid this problem by enabling you to produce items only when they’re requested. POD can allow you to offer a broader selection while reducing the need to stock unsold items.
- POD allows you to test market demand before producing mass quantities. Once you’ve created your design for the product, you can create as many copies as requested, allowing you to test the demand for your products without having to make a large capital investment in inventory.
- It provides a flexible manufacturing alternative to traditional business models. Many large businesses have found that it’s more efficient to produce smaller batches of products closer to the point of sale.
If you’re an entrepreneur who wants to produce products close to your customers but doesn’t expect high sales volumes, POD can provide a flexible alternative to large-scale manufacturing.
For example, if you’re a retailer specializing in handmade products, you might work with a printing company offering POD services. It allows you to produce items in small batches while keeping your supply chain relatively short.
Dropshipping vs. print-on-demand has its own benefits and advantages. Dropshipping is a very scalable, low-cost method for business, but it relies on third-party suppliers.
Print-on-demand is a more expensive manufacturing method, but it allows you to create unique products that aren’t available anywhere else. Because of this, print-on-demand products can be very desirable.
Here at Laser Chili, we are an excellent choice for many small businesses, especially those that sell unique products that may not sell well as inventory.
We offer many advantages, including reduced costs, selling one-of-a-kind products, and testing market demand for products before producing a large quantity.