Dropshipping vs Print on Demand

Dropshipping vs Print on Demand: Which is the right solution for your business?

At a glance, both of these business models have a lot in common. They both involve working with third-party companies to produce and ship products. They also both help to reduce the risk retailers take when selling products online, with no minimum order quantity requirements.

However, there are some major differences between dropshipping and print on demand (POD) aspiring entrepreneurs need to understand.

Today, we’ll be defining both POD and dropshipping, considering the pros and cons of each model, and helping you to decide on the ideal solution for your business.

What is Dropshipping?

The first step in choosing between print on demand and dropshipping for your company is to define both solutions. Dropshipping is a convenient ecommerce business model, which has been growing in popularity significantly in the last few years.

With dropshipping, retailers source products from a third-party retailer to sell on their own ecommerce websites. There’s no need to produce any inventory yourself with this strategy. Instead, you’ll list the products created by manufacturers you choose on your ecommerce website.

When customers place orders, their information is passed to the third-party fulfillment company, which processes, packages, and ships the item directly to the customer. When you run a dropshipping store, the key tasks you’ll be responsible for include:

Research: Companies using the dropshipping model need to research which products are generating the most attention from their target audience, then find a reputable supplier to source those items from. It’s important to understand the niche you want to connect with, as well as their preferences, pain points and goals.
Online store management: Dropshipping business owners are also responsible for creating the online store they’ll use to showcase products to customers. You’ll need to ensure your site or store front on a marketplace like Amazon, eBay, or Etsy is designed to drive the most attention possible from potential customers.
Marketing: You’ll be responsible for driving customers to your online store, using a variety of marketing methods, from social media advertising, to content and email marketing, PPC, and any other strategy that works for your brand.
Customer service: Some dropshipping companies will offer assistance with refunds and returns. However, for the most part, it’ll be your responsibility as a store owner to ensure your customers are getting an excellent experience when they purchase your products.

Pros and Cons of Dropshipping

Like any business model, dropshipping has pros and cons to consider. Right now, the business model is experiencing phenomenal growth, set to reach a value of around $1670.1 billion by 2031. While this means there’s a lot of opportunity available to sellers, there’s also significant competition in the market. The main pros and cons of dropshipping you’ll need to consider include:

Pros

Minimal risk: You don’t have to hold your own inventory with dropshipping, and you can change what you sell rapidly, without having to worry about selling leftover stock.
Shorter fulfillment times: Depending on the supplier you choose, the fulfillment times can be a lot shorter with dropshipping than POD, because items don’t need to be customized.
Low startup costs: There are very few initial costs to worry about with dropshipping. You don’t have to spend a fortune on inventory or design.
More resale options: As long as a product is in good condition once it’s returned to your company, you can resell the item if a customer gives it back.
Variety: With dropshipping, there are often more products to choose from in a variety of different categories, giving you more scope to scale your business.

Cons

Competition: As mentioned above, the popularity of dropshipping has led to significant competition in the market, with most companies selling the same items.
Limited customization: You can’t make any changes to the product design with dropshipping, which makes it much harder to make your items stand out.
Branding: You may have a hard time developing a strong brand with POD, simply because you can’t place any of your own branding on your products or packaging.

What is Print on Demand?

Dropshipping is similar to print on demand in many ways. With this business model, you’ll also be working with third-party retailers to produce products and ship them to customers. You still don’t need to hold any inventory, and you shouldn’t have to adhere to any minimum order quantities. With print on demand, you only pay for the product you need after a customer has placed an order.

The major difference between print on demand and dropshipping is that with dropshipping you simply sell the products already produced by another manufacturer on your own store. However, with POD, you can customize products or “white label” solutions too, adding your own designs and components.

The exact level of customization you can access for your products will depend on the manufacturer you choose. Most print on demand vendors offer a wide range of products to choose from, in different categories, sizes, and materials. Some vendors will also give you the opportunity to customize your packaging, the labels added to products, and even the invoices you send.

Pros and Cons of Print on Demand

Print on Demand has a lot of similar benefits to dropshipping, including minimal risk and no need to manage your own inventory. However, there are some unique pros and cons worth keeping in mind if you’re exploring this strategy too, such as:

Pros

Less competition: Although demand for POD solutions is growing, there’s less competition because companies aren’t selling the exact same products as other brands.
More customization: You can make your products really stand out by adding your own designs, choosing different materials, and even adjusting the product packaging.
Branding: You’ll be able to build a reputable brand as a POD company if you use the right designs and make sure you work with a reputable manufacturer.
Differentiation: Aside from adding your own designs to products, you can also differentiate yourself by using unique materials, eco-friendly components and other special factors.

Cons

Longer fulfillment times: It generally takes longer to produce and ship POD products because there’s more work to be done in terms of customization for your items.
Higher costs: Although the inventory costs are still low, you’ll still need to pay the price associated with making your items unique.
More work: As a POD seller, you’ll be responsible for making sure you choose the right designs, and producing items according to the highest quality standards.

The Core Similarities Between Dropshipping and POD

As mentioned above, there are quite a few similarities between dropshipping and print on demand business models for entrepreneurs. Regardless of which solution you choose, you won’t need to manage any inventory or shipping tasks yourself. Your POD or dropshipping suppliers will work with you to ensure items are made according to your specifications, and delivered to customers.

Both models are relatively low risk, because you don’t have to deal with large amounts of unsold stock. Rather than buying items in bulk and hoping they sell, you’ll only pay for items once an order has already been placed, which can save you a lot of time and effort.

Plus, it’s relatively easy to experiment with products and different inventory ideas. If the preferences of your customers begin to change, you can rapidly choose new items to add to your store, and remove other products from your inventory without any down sides.

Both POD and dropshipping make it easy to start your own business and start experimenting with sales strategies. There are even tools available for both POD and dropshipping companies which allow you to add apps to your online store, and automate a great deal of the order management process. However, with each strategy, you’ll still be responsible for drawing attention to your business, delivering excellent customer support, and using strategies like SEO for visibility.

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The Main Differences Between Dropshipping and POD

Although there are a lot of similarities between Print on Demand and dropshipping, as both involve working with a third-party supplier to eliminate warehousing and logistics hassle, there are some significant differences to consider too. The main differences between the two models include:

Products

The products you can sell as a POD or dropshipping company are likely to vary significantly. In the POD world, most of the products you’ll produce will be those that are easy to customize with unique designs. For instance, it’s common to add designs to white label products like t-shirts, stickers, tote bags, phone cases and hoodies.

In the dropshipping space, you can explore a wider range of products, from tech to beauty products. You can experiment with a wide range of niche options, depending on the type of business you want to sell. However, the chances are you’ll be selling similar products to other companies.

Costs

Although both print on demand and dropshipping offer business leaders a relatively affordable way to launch a new company, there can be more costs involved in print on demand.

You’ll need to pay for custom components to be added to your products, and you may spend more on high-quality or unique materials. You may also have to pay for assistance from a designer if you can’t produce designs yourself.

Customization

Perhaps the biggest difference between print on demand and dropshipping is the level of control you’ll have over making your products as unique as possible. You can add your own designs to POD garments, select from a range of materials, and even change the labels on custom printed clothing. This is crucial at a time when 67% of millennials and 74% of Gen Z customers say they’re spending more money on personalized, unique products.

Alternatively, there are no customization options for dropshipping. You simply sell the product as it comes under your own business name. Though this means you don’t have much control over the items you sell, it is easier to ensure the quality of the items remain the same with dropshipping, as quality can vary with each newly printed garment or product.

Work involved

While both print on demand and dropshipping are relatively straightforward business models for new entrepreneurs, there’s a little more work involved with POD selling. Not only do you need to ensure items are made to the right quality standards, but you’ll also be responsible for researching and creating the right designs for your items.

You may need to consider working with freelancers on the creation of certain designs, or you may need to practice your own graphic design skills in house. Fortunately, most print-on-demand business owners will be able to use a mockup generator to see what their custom products will look like before they add them to their store. Fortunately, most dropshipping and print on demand suppliers usually provide access to apps for store builders like Shopify and marketplaces like Amazon, for automation.

Shipping

With both print on demand products, and dropshipping items, you won’t have to handle shipping and logistics yourself. However, the speed at which you can deliver items to customers may vary. Shipping times can be a lot longer for POD companies, because each item needs to be produced and customized according to your requirements.

However, it’s worth noting that the shipping costs and times associated with dropshipping can be problematic too. If you choose a company located outside of your country to produce and ship products, such as AliExpress, it can take several weeks for products to arrive at their destination.

Branding

As mentioned above, you’ll be far more limited in how you create your own brand with a dropshipping company. Although you can sell new products under your own website and name, you won’t be able to add your own unique labels and custom elements to items.

It can be difficult to build an effective brand as a dropshipping company because you’ll be selling the same products as countless other companies. However, you can still work on differentiating your company in other ways, with marketing strategies, excellent customer support, and a fantastic storefront. POD simply gives you more ways to make your brand stand out.

Profit margins

The specific profit margins you can generate with POD and dropshipping can vary based on a number of factors. Dropshippers tend to have the upper hand in this area, because the initial cost of buying a product to sell to customers is generally much lower. Dropshipping also comes with less work to manage overall, with no need to create your own designs from scratch.

However, it’s worth noting that if you choose the right designs and differentiate your products correctly with print on demand, you may be able to charge slightly higher prices for your items. This could mean you make a more significant profit over time, particularly if customers become loyal to your brand.

Market size

As mentioned above, the dropshipping market is growing at a rate of around 27.1%, with a projected market value of $1670.1 billion by 2031. On the other hand, the Print on Demand business is expected to grow at a similar rate of around 27.8%, with a projected value of $43.07 billion by 2032.

Though the overall projected value of POD is a little lower, it’s rapidly gaining attention as younger customers search for more unique products. Additionally, POD is particularly popular in the fashion market, where consumers are searching for more sustainable, eco-friendly products.

The market for POD is likely to be more appealing to home décor and clothing companies, while dropshipping brands can benefit from access to a wider variety of products and a larger consumer base overall.

Competition

Finally, it’s a lot harder to compete effectively in the dropshipping market than it is to compete in the print on demand space. The market may be larger for dropshipping, but companies are consistently competing with the same selection of products. This means you can’t always differentiate yourself well from other companies selling similar items.

Unlike dropshipping, print on demand gives you more freedom to create custom and unique products that can’t be found elsewhere. This means you’re less likely to lose customers to companies selling the same product for a lower price, or with faster shipping.

Dropshipping vs POD: What Can You Sell?

Ultimately, the best way to make a profit with both print on demand and dropshipping is to get to know your target audience. The more you know about the preferences of your niche customers, and the options already available from competitors, the easier it will be to make your business stand out.

With dropshipping, you’ll have a lot more options when it comes to choosing what kind of products you want to sell. Popular dropshipping products include:

Health and beauty products: From face masks to tooth brushes, and cosmetics
Apparel: All kinds of branded shirts, sweaters, and various other items
Homeware: Home and décor, accessories, and kitchenware
Technology: Phone chargers, laptops, and other devices
Toys and games: Popular products for young and older children

With print on demand, on the other hand, you’ll be limited to selling white-labelled products which can be customized according to your specific needs. Options generally include:

Apparel: T-shirts, hoodies, leggings, dresses, and sweaters
Home and living: Posters, wall décor, mugs, and blankets
Accessories: Jewelry, phone cases, and cushion covers
Stationary: Books, pens, stickers, and notepads

Both print on demand and dropshipping also give you a wide range of companies to work with when you’re building your store. With dropshipping, you can build a site on a platform like Shopify or WooCommerce and dropship with companies such as Alidropship. With Print on Demand, you’ll be able to use solutions like Printful, Printify, and CustomCat. There are also marketplace options available like Redbubble.

Dropshipping vs Print on Demand: Which is Best?

Ultimately, there’s no one-size-fits-all strategy to choosing between print on demand, dropshipping, or any other business model. The right strategy for you will depend on the kind of different products you want to sell, and how much customization you want to add to your items.

Print-on-demand gives you more scope to build your brand, and earn a higher profit by connecting with customers on a deeper level. However, there are more costs and challenges to address upfront.

Dropshipping, on the other hand, makes it much easier to start an online business without having to worry about creating your own designs. However, you may find that you struggle to stand out, without custom designs to differentiate your products from other providers.