Dropshipping vs Print on Demand: Which is the best for your online business?

Dropshipping and print on demand aren’t strange concepts among the community of aspiring ecommerce entrepreneurs. But some starters might feel confused between these two business models and not sure which one is the way to go?

To clear up the confusion, Merchize will explain to you in detail about drop shipping and print on demand, their pros and cons and how you can find which one is suitable for your business.

What is dropshipping?

In order to find the answer to the question “Whether print on demand or dropshipping is the best option?”, we need to address the fundamentals of each business model first.

Dropshipping is a special solution for the ecommerce business. It is a form of fulfillment which requires no inventory to sell products.

In order to fulfill orders, the sellers now work with a third-party, either a wholesaler or a manufacturer, who will take care of the inventory and delivery. Sellers only have to pay when an order is confirmed.

What differentiates dropshipping business from the regular retailing model is the fact that the business owner doesn’t actually buy or own the products. Instead, they act as a middle man between end customers and dropshipping suppliers.

Dropshipping is a less risky and low-barrier business model to make money online.

What is print on demand?

Print on demand is considered a dropshipping model, but with a twist. With print on demand, sellers’ role is more than just a middleman whose job is to sell products only. Instead, they contribute to the production of their goods by creating the designs.

The print on demand suppliers will help them to print their designs into the white-label products and deliver them to the buyers. A printing company either owns the manufacturing or outsources the printing services in order to fulfill the orders. You can read our post to fully understand what is print on demand and how it works.  

Print on demand is a form of dropshipping where products are printed in order using your own designs. 

Dropshipping vs Print on demand: What are the similarities?

From the definition of dropshipping and print on demand as explained above, it is easy to see that both of these business models are similar in some obvious ways.

No inventory

First off, both dropshipping and print on demand requires no inventory. It’s the print on demand and dropshipping suppliers who hold inventory. This characteristic of these two models help sellers to save money on leasing and managing inventory.

No managing shipping

Apart from the inventory, sellers doing dropshipping and print on demand also don’t need to stress over the shipping of the products. Print on demand and dropshipping suppliers will print, package and ship all orders on your behalf. It will take a chunk of work off your shoulders.

Low risk

Another important peak that both models have is the absence of unsold stock risk because all orders are delivered on demand. It means that you only have to pay for the product when the order is made.

These two different business types are unlike traditional retailing where you pay for products up front and keep them in inventory. In the traditional business model, you are running the risk of not clearing out all products on stock, which translates into a loss in profit.

Passive income

Ideally speaking, both print on demand and dropshipping are sources of passive income: Money is running into your pocket without you spending hours and doing the work. Of course, you need to deliver the minimum effort in order to set up the store and the listing, but these attempts are on-time events. But everything after that is automated and you can probably earn money even in your sleep.

Easy to start and experiment

For both dropshipping and print on demand business, the entry barrier is low. It might take a small cost to set up a place where online buyers can visit and buy your product in the beginning. Without the need to buy products in bulk and keep the inventory, it does not require large investment like the traditional business. It offers an opportunity for anyone to start doing business online with a small budget.

More importantly, dropshipping and print on demand also provide an opportunity for business owners to expand their existing business with a new line of product without risking spending huge money up front. With print on demand and dropshipping, they can test new products to see whether their customers like it or not before getting all in. That’s why many traditional business owners are using dropshipping and print on demand to fulfill a number of products in their store.

Skills set

Success in dropshipping and print on demand probably requires a similar set of skills. For example, to get traffic to your stores, dropshipper and print on demand sellers must do some sort of advertising and marketing, which can be through social media, email, SEO, or paid ads.

In addition to the marketing and advertising skills, print on demand and dropshipping sellers also need to master the art of market research, customer services, budgeting and many more.

What are the differences between dropshipping vs print on demand?

Beside what they have in common, print on demand and dropshipping have some distinctive features that set them apart. Knowing these differences will help you decide which one is better for you.

Products

The first thing to mention is that each model will have a different approach to manage the production, which leads to different outcomes in terms of product range and product quality.

Product range

Print on demand focuses on the products that can be customized and printed, including apparels like T-shirts, hoodies, home and living items like mugs, posters, canvas, and accessories like phone cases, keychains, jewelry and so on.

Unlike dropshipping where all products are ready-to-sell, a print on demand product needs to be printed before being shipped to the customers. One print on demand company wouldn’t have all the capabilities to make and print all kinds of products. On average, a print company can provide a set of 100-400 products. Even when adding all of the products of these print on demand companies together, we can’t have as many products as dropshipping.

On the contrary, there is a vast number of products for you to start selling. Basically, you can find all products to fulfill for your dropshipping store, from clothing, accessories to heath and beauty products, electronic gadgets and devices. The opportunities are endless.