November 14, 2024
18
mins read
Print-on-demand vs. dropshipping - two popular business models that have taken the ecommerce world by storm.
At first glance, print-on-demand and dropshipping seem confusingly similar. However, once you understand the core concepts, pointing out their differences becomes pretty simple.
Both business models allow you to fulfill customers’ orders without keeping stock or needing large upfront investments, making them ideal for businesses of all sizes.
So what sets them apart?
The first difference lies in how involved you want to be in shaping the product and customer experience.
That said, there’s much more to it than that.
This article will explain in detail the dropshipping vs. print-on-demand business models, how each model works, and their pros and cons.
We’ll also explore their similarities and differences and find out which model is more profitable to help you determine the one that’s best aligned with your goals.
When comparing print-on-demand vs dropshipping, it’s essential to understand what each business model entails.
Print-on-demand or POD, is a business model or fulfillment method where products are only printed once they’re ordered or paid for.
Traditional inventory methods require you to keep products in stock that may or may not sell. That’s not the case for print-on-demand, where products are only manufactured when needed.
The innovative approach gives business owners a flexible and affordable way to sell goods without the financial strain of managing large inventories.
So, how does POD work?
The process is a seamless collaboration between three key players: a seller, a print-on-demand provider, and a customer.
The seller creates and displays custom products in a print-on-demand provider like Podbase. These custom products could be drinkware, wall art, mugs, t-shirts, or even tech accessories.
The white glossy mug shown below is an example of a custom product.
Image via Podbase
Once a customer places an order, the seller confirms it, and the POD provider steps in. They’ll then manufacture, print, pack, and ship the product directly to the customer.
This arrangement leaves the seller free from the hassles of inventory management. It also gives them the freedom to focus on creativity and marketing without worrying about logistics.
If you’re starting your ecommerce store with no means to go all in yet, print-on-demand might be a great business model to begin with.
That’s because with POD services, you can:
It’s important to weigh the pros and cons of POD before making up your mind.
In this section of our print-on-demand vs dropshipping article, we’ll uncover five benefits of POD and explain why it could be an excellent business model for you.
Launching a print-on-demand business requires little financial investment. You don’t need to purchase manufacturing equipment or invest in costly warehouses. A computer with great internet access is enough to get you started.
With these five simple steps, you can easily start a print-on-demand business from the comfort of your home:
Storing and shipping large quantities can be a major challenge for many entrepreneurs, which consumes a lot of time and money.
With POD, you won’t have to rent storage space or keep track of stock levels. When a customer places an order, the POD partner will handle everything from production to packaging and shipping.
A POD model allows you to introduce new designs, adjust existing ones, or add seasonal themes effortlessly. You can also experiment with different styles, graphics, or product types to see what resonates with your audience.
Let’s say, for instance, you plan on selling phone cases online. With a print-on-demand business model, you can easily upload different designs for various phone models and switch them up whenever you like.
You can even offer limited-edition or holiday-themed designs to attract more customers during specific times of the year.
These Christmas-themed phone cases are a great example of how seasonal designs can appeal to shoppers looking for something festive.
Image via Etsy
The power of print-on-demand lies in its ability to go global instantly. Many POD service providers have networks of supplies and shipping options that allow your products to be manufactured and delivered internationally.
Therefore, rather than dealing with costly bulk print runs and complex shipping logistics, your designs can be printed and shipped directly to your customers wherever they are.
This streamlined process lets you compete globally without the traditional hurdles of international distribution.
One of the key advantages of print-on-demand is the wide range of products available for customization.
With POD services, you can choose from various products, including apparel, home decor, and accessories.
This range also extends to specialty items like ring holders, phone cases, and laptop cases, as shown in the image below.
Image via Podbase
This diversity enables you to cater to different customer preferences and niches.
Besides, if a particular design or item gains popularity, you can seamlessly integrate it into your offerings without worrying about excess inventory.
This flexibility improves your product catalog and allows you to stay current with market trends and customer demands.
Also, when selling on platforms like Etsy, Shopify, or Wix, there’s no limit to the number of products you can list from the start. Even on marketplaces that have limits, you can still build a sizable catalog.
This diverse product selection will enhance the customer experience and increase your chances of selling more and scaling quickly.
Lastly, one of the most significant perks of print-on-demand is the freedom it offers. As a POD entrepreneur, you can run your business from virtually anywhere, at any time, with zero worries about inventory, location constraints, or time zones.
This flexibility means you can balance your business and personal life, giving you more room to focus on other important things.
As we look into the print-on-demand vs dropshipping dynamic, it’s important to consider the potential drawbacks of each model.
While POD provides some impressive benefits, it also has a few drawbacks that could impact your business’s efficiency and profitability.
Let’s look at three challenges you may experience should you choose to run a print-on-demand business.
When it comes to product quality, the print-on-demand model can leave you feeling powerless.
If the materials used are less than stellar, your customers' expectations will undoubtedly go unmet.
Whereas sourcing materials yourself allows you to choose premium fabrics for your designs, print-on-demand services often have a one-size-fits-all approach.
Typically, POD companies use the same raw materials for all their products. For example, if you and another seller are using the same provider to sell digital art, your designs will likely share the same printing surface, such as canvas or poster paper.
This can cause inconsistencies in quality and color vibrancy, as the material and printing methods may not be optimized for your specific artwork.
One significant drawback of the print-on-demand model is the potential for delays in customer service.
In traditional retail, a business has direct control over inventory and fulfillment. On the other hand, POD relies on third-party providers to produce and ship products.
For example, in case a customer experiences a problem with their order—say delay in shipping—you may have to wait for the print-on-demand supplier to address the situation before you can provide a solution.
This can cause frustration for customers who expect a prompt response from you. In today’s competitive market, slow customer service can harm your reputation and result in lost sales.
Customers today have come to expect quick shipping and fast delivery, often looking for options to get their orders within a few days.
The delays inherent in the print-on-demand model pose a significant disadvantage.
When you choose a POD service, your unique designs are only printed once an order is placed. This could mean a bit of a delay in shipping, especially if there are other customers ahead of you in the queue.
There are few business models where the sellers don’t handle the products. Dropshipping is one of them.
In this model, a seller works with a third-party supplier who handles everything after a sale, from sourcing the products to shipping them directly to customers.
Like print-on-demand, in dropshipping a seller doesn’t pay for a product until a customer orders for it.
Here’s a simple breakdown of the dropshipping process from start to finish.
The first crucial step is to identify and partner with a trustworthy dropshipping supplier that offers the products you want to sell. Whether you’re working with a single business or using a dropshipping platform, you’ll need to sign an agreement.
Once the agreement is in place, the supplier will take responsibility for storing, packing, and shipping products to your customers.
The next step is to create your online store and start listing the products you want to sell. You’ll decide the prices, so you can mark up the products and earn a profit.
When a customer browses your store and places an order, the order will go through just like any other online purchase. They’ll then pay for the product, receive an order confirmation, and then wait for it to arrive.
Once the customer pays, you’ll need to pass the order details to your dropshipping supplier. They will then handle the rest.
Now it’s the supplier's turn to do the heavy lifting. They’ll pack the item and ship it directly to your customer.
Finally, the customer receives their package. However, your responsibility doesn’t end there. You’re still responsible for making sure the customer is happy.
Any questions or issues? That’s where your great customer service comes in.
Similar to the print-on-demand fulfillment model, dropshipping has its perks and drawbacks.
Let’s now explore four pros of this model that has made it a popular choice for many businesses.
In the early stages of an ecommerce business, a large chunk of the budget usually goes toward building inventory.
This is risky because if your stocked items don’t sell, you’ll be left with unsold goods and wasted money.
Dropshipping takes that problem out of the equation. Since you don’t need to purchase inventory upfront or manage a physical warehouse, the initial investment to get started is much lower.
In fact, you can build and manage your dropshipping website using a platform like WooCommerce that offers powerful plugins that let you import products from suppliers like AliExpress or other sources directly into your store.
Another key advantage of dropshipping is its incredibly low entry barrier. Since there’s no need to purchase inventory upfront or hire staff for warehousing and shipping, you can start saving money right from the get-go.
You also don’t need any special skills or prior experience in ecommerce. Dropshipping’s straightforward nature makes it accessible to just about anyone.
In traditional ecommerce, scaling often means investing in larger storage spaces, hiring additional staff, and managing an increasingly complex supply chain.
With dropshipping, however, your supplier handles all the logistics, which removes these burdens entirely.
Since you’re not tied down by the complexities of inventory management, your business can grow easily.
Whether you’re working from home, traveling, or even running your business from a café halfway across the world, the flexibility of dropshipping allows you to stay connected.
This means you can keep your store running smoothly without being tied to a specific location.
While dropshipping has its advantages, it’s essential to consider the drawbacks, especially when examining print-on-demand vs dropshipping.
Understanding these cons can help you make an informed decision about whether this model is suited for your business goals.
Launching a dropshipping business requires minimal capital. However, this low entry point also causes fierce competition, particularly in popular markets.
When a product is both appealing and profitable, it’s no surprise that many dropshippers will want to capitalize on it.
This competitive landscape can cut your profits. Simply put, more competition leads to a saturated market, which can push prices down.
Managing order fulfillment with various suppliers is a major challenge in dropshipping.
Consider a customer who orders three products from three different vendors. Each product will incur a shipping cost, and the products may not be delivered at the same time. This can lead to a chaotic delivery experience.
If you’re sourcing your products from an international supplier, cross-border shipping increases the shipping complexity. This makes it challenging to quickly resolve shipping issues.
One of the significant downsides of dropshipping is the lack of customization options for products.
Dropshipping typically involves selling standard products sourced from suppliers, which makes it difficult to differentiate your offerings. This lack of uniqueness makes it challenging to build a distinct brand identity and attract loyal customers.
Additionally, if a customer is looking for specific features, colors, or styles your supplier doesn’t offer, you can’t meet their needs. This can potentially result in lost sales.
Since you rely on third-party suppliers to fulfill orders, any price adjustments they make directly impact your profit margins.
Let’s say, for instance, a supplier raises their prices. This will require you to either absorb the increased cost or pass it on to your customers. The latter choice could significantly affect your sales.
It’s this unpredictability that makes it challenging to maintain consistent pricing strategies. It can also lead to unexpected fluctuations in your overall profitability.
Besides, if your competitors are sourcing from suppliers with lower prices, you might struggle to remain competitive in the market. This may further complicate your pricing decisions.
While the appeal of dropshipping lies in its low overhead and the freedom from managing inventory, the flip side is that the returns can be just as slim.
You might invest less upfront, but your returns could also be minimal. This implies you’ll need to sell a considerable volume just to break even.
Also, because a large portion of your earnings typically goes to dropshipping suppliers, covering certain essential expenses can become a struggle. These expenses include marketing, SEO, and website maintenance.
With dropshipping, it can be challenging to establish a strong, recognizable brand. Many dropshippers often sell similar or identical products sourced from the same suppliers.
This makes differentiating your store from the competition difficult. Without unique branding, your offerings may blend in with countless others, making it difficult to attract and retain customers.
In case your customers receive products that don’t meet their expectations or experience delays, this could also harm your brand’s reputation.
When it comes to print-on-demand vs dropshipping, the truth is that both models have a lot in common, which explains why many people confuse the two.
In this section, we’ll look at shared features that make POD and dropshipping so similar.
One key similarity when comparing print-on-demand vs dropshipping is that neither model requires you to hold inventory.
You can easily set up an online store, list your products, and start selling right away—no need to worry about warehousing or managing stock.
The best part is that you only pay for products after they’ve been sold. This means no upfront costs or risk of losing money on unsold goods.
This hands-off approach means less stress and fewer expenses for you as an entrepreneur.
With both print-on-demand and dropshipping, you only pay for products once they’ve been ordered. This means you don’t have to worry about unsold inventory sitting in a warehouse.
This is a game-changer compared to traditional retail, where you have to buy inventory upfront and hope it sells.
In this risk-free environment, you can grow your business without the pressure of tying up money in products that might never sell.
One of the biggest advantages of dropshipping and print-on-demand is that you only pay for products after you’ve sold them.
As mentioned, when a customer makes a purchase, the order details are sent to your supplier, who handles everything from production to delivery.
This means you don’t have to stock up on inventory in advance, which can help reduce your upfront costs.
Both dropshipping and print-on-demand offer remarkable scalability, making them attractive options for ecommerce businesses.
Dropshipping allows for the easy addition of new products, so you can experiment with what resonates with your audience without the risk of overstocking.
Print-on-demand, on the other hand, lets you launch unique and eye-catching designs quickly and efficiently.
This kind of flexibility ensures you stay agile and responsive to customer preferences, -shopping trends, and seasonal shifts in demand.
When it comes to building an online store, both print-on-demand and dropshipping offer the incredible advantage of a wide product range.
Without the need to stock physical inventory, you have the creative freedom to feature as many items as you wish.
For example, if you're planning to start a clothing line, you can easily explore various styles, from seasonal trends to unique apparel. This freedom enables you to continually refresh your offerings while attending to your audience’s needs.
As a result, your online store will remain relevant and appealing to your customers.
If you’re new to ecommerce, figuring out production and shipping can feel like a big challenge.
The good news is that both dropshipping and print-on-demand models offer a straightforward solution.
When you partner with established suppliers, you can benefit from their professional expertise. This will allow you to sidestep the common pitfalls that newcomers usually encounter.
Now that we've explored the similarities between print-on-demand and dropshipping, let’s uncover the differences that set them apart.
Without a unique identity or personality infused into your offerings, customers may struggle to see any difference between you and your competitors.
This lack of differentiation can stir competition among dropshippers, who often find themselves in a race to the bottom on price.
For instance, if you search for a microwave, the odds are that you'll find the same brand in multiple stores. In such cases, businesses compete by slashing prices.
Shoppers will often gravitate toward the cheapest option or the one with the lowest shipping cost. This can ultimately lower profit margins for business owners.
On the flip side, print-on-demand gives a unique advantage with the ability to customize products. If given an option to choose between a basic plain white t-shirt and one with an exclusive design, many would rather choose the latter.
In fact, most shoppers would be willing to pay a higher price for a unique item. This allows POD sellers to command higher prices and set themselves apart.
When it comes to product quality, dropshipping often struggles with a negative reputation. Many shoppers associate it with low-quality items because numerous stores focus on cheap products to remain competitive.
On the flip side, print-on-demand gives you the opportunity to showcase unique, custom products that are perceived as higher quality.
That said, it’s crucial to understand that not all dropshipping products are inherently cheap, nor do all print-on-demand providers guarantee excellence.
To ensure that your brand delivers the quality your customers expect, choose a supplier that is transparent about their product details, including materials and origins.
You can even order samples to assess quality first-hand and ensure it aligns with your brand’s values.
While both POD and dropshipping allow you to offer a wide range of products, dropshipping tends to be more restrictive.
Many businesses end up selling the same items from the same suppliers, making it tough to differentiate yourself in the crowded marketplace.
With POD, it’s all about originality. You can create one-of-a-kind designs and tailor your products to your brand’s identity.
The customization possibilities are endless, allowing you to ride trends quickly and stand out.
Take Shakira, for example. She capitalized on her viral hit with Bzrp by launching custom merch that reflected her brand, giving fans something truly unique.
Image via X
Shipping times are crucial for customer satisfaction, and print-on-demand often has the upper hand when comparing print-on-demand vs dropshipping.
Even though POD products are custom-made, production is usually quick. Also, many suppliers are local or regional, thus shipping times are significantly faster.
Dropshipping, by contrast, often relies on suppliers in distant countries. This can result in weeks-long delivery times, which can frustrate the customers.
While dropshipping offers impressive numbers, print-on-demand is carving out a niche and rapidly growing market.
What makes print-on-demand stand out is its versatility and creative appeal. Consumers are increasingly drawn to personalized, custom-designed products.
This has led to an expansion of the market size beyond traditional dropshipping's reach. In fact, the global POD market is forecast to grow from $10.21 billion in 2024 to an impressive $87.13 billion by 2033 (see image below).
Image via Precedence Research
Print-on-demand allows a high degree of personalization, as sellers can create unique designs tailored to their target audience.
This model is ideal if your business is focused on branding and creativity, as each item can reflect your vision.
Dropshipping, on the other hand, typically involves pre-manufactured products. This can limit the ability to customize offerings. Sellers often rely on existing items from suppliers, making it challenging to differentiate their brand in a crowded market.
Another critical difference in print-on-demand vs dropshipping lies in the fulfillment process.
In the print-on-demand model, products are printed and manufactured only after a customer orders. This reduces the need for inventory management and ensures that each product is made fresh and to order.
Conversely, dropshipping relies on suppliers who maintain inventory. When a customer orders a product, the seller forwards the order to the supplier, who then ships the item directly to the customer.
This can lead to potential delays, especially if the supplier is out of stock or if shipping issues arise.
When we weigh print-on-demand vs dropshipping concerning profitability, POD wins.
One of the major reasons why POD tends to be more profitable than dropshipping is the difference in profit margins.
In this model, you have the flexibility to set prices based on the uniqueness of your designs. Because the products are personalized and unique, customers are often willing to pay a premium, which can result in greater profitability.
On the other hand, dropshipping typically involves selling mass-produced items, where competition drives prices down, leaving businesses with thinner margins.
Since dropshipping often relies on high volume to generate meaningful profit, businesses have to sell significantly more to reach the same level of profitability as print-on-demand.
Another reason is the perceived value of custom products. POD allows entrepreneurs to tap into niche markets by offering products that resonate with specific audiences.
For instance, custom-designed apparel with unique artwork, cultural references, or slogans, like the one below, often attracts a loyal customer base.
These buyers are not just looking for the cheapest option but are drawn to the creativity and personalization of the product.
Image via Etsy
Customers’ willingness to pay a premium for unique, made-to-order items allows POD businesses to maintain healthy profit margins.
On the other hand, dropshipping operates in a more price-sensitive environment. Since dropshipping products are often generic and available from multiple sellers, consumers tend to choose based on price.
This drives competition and forces dropshippers to lower their prices to remain competitive, further eroding profit margins.
Also, while both print-on-demand and dropshipping eliminate the need to hold inventory, POD allows you to offer custom products without bulk ordering or storing items.
With POD, each product is printed and shipped only after a customer orders, so you don't risk being stuck with unsold inventory. This ensures you only pay for what you sell, protecting your profit margins.
Even though dropshipping also removes the need for inventory, it’s heavily dependent on suppliers. Since dropshippers source their products from third-party suppliers, they may face issues with quality control, shipping delays, and customer satisfaction.
If a product arrives damaged or late, the dropshipping business will likely take the hit, leading to refunds, returns, and damaged reputations. All of this can cut into profits.
When deciding on print-on-demand vs dropshipping, the key is understanding how each model fits your business goals.
While both offer low-risk, inventory-free options to get started in ecommerce, they differ in various areas.
Let’s take a look at these key areas in depth:
If maximizing profits is your top priority, print-on-demand typically offers a more lucrative option.
Since POD products are custom-made for each order, you can set higher prices and get better profit margins.
Print-on-demand is ideal for creating a unique brand experience. You have full creative control over your products, from design to packaging. This allows you to build a stronger brand identity.
Both POD and dropshipping are scalable, but the rate at which you can scale varies.
Dropshipping lets you quickly expand your product range since you’re not tied down to designing each item.
However, POD’s personalized offerings often lead to a more loyal customer base, which can help drive long-term growth.
With print-on-demand, you have more control over product quality since you can choose your POD service provider. However, quality can vary significantly among different providers, so careful selection is crucial.
In dropshipping, quality control can be challenging as you rely on suppliers. Therefore, vetting suppliers and ordering samples is vital to ensure product quality.
Print-on-demand provides strong branding potential. Since each product can feature your designs, it lets you build a cohesive brand image.
However, in dropshipping, branding may be limited. Products often bear the original manufacturer’s branding or packaging, making it harder to establish a unique identity.
1. What is better, print-on-demand or dropshipping?
When it comes to print-on-demand vs dropshipping, your choice of ecommerce model will largely depend on your business goals and product focus.
Print-on-demand is ideal for selling custom products like apparel, accessories, and home decor. The model allows you to create unique designs without holding inventory.
On the other hand, dropshipping is a better choice for a wider range of products. With this model, you can sell items from different suppliers without any upfront costs.
So, consider your niche, desired profit margins, and customer engagement to determine which model suits you best.
2. Is POD the same as dropshipping?
No. Despite sharing similarities, print-on-demand and dropshipping are not the same.
Both models allow you to sell products without holding inventory, but POD focuses on custom items that are printed after an order is placed.
In contrast, dropshipping typically involves selling pre-made products from a supplier.
This means POD is more suitable for personalized products, whereas dropshipping can offer a wider variety of goods.
3. Does Shopify allow print-on-demand?
Yes, Shopify supports print-on-demand services. You can easily integrate various POD platforms, such as Podbase or Printful, into your Shopify store.
This allows you to create and sell custom products without worrying about inventory management, as products are printed and shipped directly to your customers when an order is placed.
4. How do I start my print-on-demand business?
To begin your POD business, follow these simple steps:
Print-on-demand is a flexible business model for entrepreneurs and creatives looking to monetize their designs without the upfront costs and risks of traditional print methods.
If you’re leaning towards this model, consider partnering with a reliable service like Podbase. With 10 years of manufacturing experience, we're here to help you bring your ideas to life with top-quality POD products.
Whether you're starting your own business, building an online brand, or creating merch for your fans, we've got you covered.
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