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With more than 431.6 billion dollars in revenue from eCommerce in the US alone in 2020, it’s not surprising many of us are hoping to get our share!
Two ways of potentially entering the world of online retail are print on demand and dropshipping. So if you are curious as to the differences between these two eCommerce methods, look no further!
In our helpful article today we will walk you through the differences, then discover some of the pros and cons so you can decide which is best for you.
Let’s hit the brief first before we delve a bit deeper.
The main difference between POD and dropshipping is that with POD store owners are required to design the products they sell. However, profit margins can be lower than dropshipping as some products have a higher shipping value than the product. With POD, store owners have full design control.
Ok with the short answer in mind, let’s start with an overview of both methods, so you can more easily understand the differences between print on demand and dropshipping.
What is dropshipping?
In a nutshell dropshipping is a way to run an eCommerce store that lets you start up with low or no investment. Essentially dropshipping allows you to outsource the inventory management to third-party suppliers while you carry on building your business and making the strategic plans.
Usually, with dropshipping, you choose from a wholesaler’s catalog of products and offer them on your Shopify or other eCommerce stores. When your customers order an item from your store, the order fulfillment and shipping are all taken care of by dropshipping suppliers.
Some of the best dropshipping suppliers also have their own warehouses where they will also pick the products. Veteran dropshipping companies with years of experience may also offer other services such as white label products. This is where you can have your products packaged with your own unique branding.
For a more in-depth read on the dropshipping model, head over to discover more.
“When your customers order an item from your store, the order fulfillment and shipping are all taken care of by dropshipping suppliers.”
What is print on demand?
Print on demand is a way of offering customers their own customized products. It’s often referred to as POD.
In its simplest terms, it’s an order fulfillment method where items are printed as soon as an order is made. One of the key elements is there are usually no minimum order requirements.
This order fulfillment method is often combined with the dropshipping model and is similar in the fact POD means there is no need for holding finished inventory. The product is always effectively ‘in stock’. Print on Demand gives you the option to Print on work with a supplier to customize white-label products. These products could be tee-shirts or tote bags with your own unique design.
Ok so with a brief overview in place and a quick explanation of the similarities between POD and dropshipping let’s move on to how they differ.
The differences between dropshipping and print on demand
One of the main differences between these two eCommerce fulfillment methods is that on average, a dropshipping supplier holds inventory for products ordered by your customer. This way when an order is placed, your dropshipping partner is able to ship it as soon as possible.
With POD, the supplier has to print the design on a product before sending it. Sometimes that can take an additional 1-3 business days for your customer to receive it, as the supplier need to produce it.
Let’s look at a few more for those of you wondering whether to start your eCommerce enterprise with dropshipping or POD!
- Level of competition: As POD seems like the quickest route to a ‘hands off’ retail enterprise, this means there will be a high level of competition, with many competitors offering the same products (albeit with a different design)
- Uniqueness: dropshipping allows store owners to create a bespoke, curated offering. Although you can design your product with POD, in general, printed products such as T-shirts, mugs, and tote bags will be almost identical across most of the POD companies. Dropshipping allows you to choose from thousands of different products.
- Brand building: Both POD and dropshipping allow you to build a brand, although POD can make the process a little easier as you have full control of designs.
- Profit margin: With print on demand, most store owners choose to sell a range of mugs. It’s worth noting that mugs can have a higher shipping fee than the price you charge your customers.
Ok so let’s now put these two order fulfillment processes through their paces and look more closely into dropshipping vs print on demand.
Pros and cons of dropshipping
- No costs of a real-life store: You do not have to open a brick-and-mortar store and deal with overhead fees and stock physical products.
- Easy to get started: This way, you’ll reap the benefits of selling products that you don’t have to make yourself!
- Easy to scale: Many dropshippers’ experiences are that they are able to make better profits with dropshipping than print on demand.
- Simple to manage: dropshipping usually requires a few processes to manage your business. But it’s worth understanding that with POD, you are responsible for the actual design of the product too.
- Lengthy shipping: Dropshipping can have very long shipping times, depending on which dropshipping partner you use. However many of the best dropshipping suppliers have their own warehouses and fulfillment centers in Canada and the US.
- Product quality: Many are put off dropshipping due to the perceived quality of products that are made in China and come with bad quality. However, by making sure you work with reliable dropshipping partners and establish quality control process, these risks can be reduced.
Ok so in the dropshipping vs print-on-demand race, let’s find out how print-on-demand fits into our investigation.
Pros and cons of Print On Demand
- Low start-up costs: In much the same way as dropshipping, the start-up costs are fairly low. You simply need to create a design, which can be offered at a fairly low cost by doing a Google search.
- Full control of designs: By choosing POD, there is the creative freedom to totally control the designs of the products you are selling.
- Easy to experiment: As opposed to the traditional bulk purchase costs of printed products, it’s totally free to read out your customers with a range of ideas. If one idea isn’t such a hit with your audience it won’t have cost you anything to try it out.
- Simple business model: Possibly the biggest benefit of print on demand is that the whole process from printing to delivery is looked after.
Ok so now we’ve how POD sits when we are looking at the pros, so now let’s find out if there are any downsides.
Cons of print on demand
- Higher cost than the wholesale model: With POD, you will be charged for the garment or product as well as the printing plus shipping. These coats could add up to more than traditional wholesale costs.
- High shipping costs: The speed of shipping does depend mostly on where the printing company is located versus where your customer lives. Also, shipping rates are usually a tricky subject for print on demand as most customers expect free shipping.
- Limited packaging options: Most print-on-demand suppliers don’t allow you to design your own boxes or add marketing inserts into your packages, however, you may be able to add your logo on a receipt or a sticker for your package.
- Limited products to offer: As printing requires many different processes, most printing companies will only be able to offer a limited range.
So hopefully that’s given you enough information on the differences between POD and dropshipping to take your eCommerce store to the next level!
If you decide that dropshipping is the way forward to make that elusive 7 figure income, make sure you use the most reliable supplier.
Here at HyperSKU, we are dropshipping veterans with years of experience in helping people build a Shopify, WooCommerce, or another type of ECommerce store.
Get in touch now, watch our helpful video and sign up for free!