Which is Better: Dropshipping or Print on Demand?

Hey, I know you’re interested in starting an e-commerce business, so let me break down two popular fulfillment models – dropshipping and print on demand – POD – (which is actually a type of dropshipping).

They both have their pros and cons, so we’ll have a look at the main differences (and similarities) so you can figure out which one is best for you.

Before we get to that, though, here’s the quick answer to the main question – so you don’t have to wait:

Dropshipping is typically higher risk, higher reward, and print on demand is now getting over-saturated. However, print on demand is a better decision for some people instead of dropshipping.

We’ll get to why later, but for now we need to know: what exactly are dripshipping and print on demand?

What is Dropshipping (and POD)?

With traditional dropshipping, you partner with a supplier to sell their pre-made products. You list the items on your online store – or even centre your entire website around it – and when an order comes in, you purchase the product from the supplier who then ships it directly to the customer.

You never touch the product, which is both a pro and a con at the same time (but most of the time, it’s a good thing). The reasons why it’s a pro are obvious, but it could also be a con because of quality issues or delivery times.

With print on demand, it works in a similar manner to dropshipping, except you create custom designs, patterns, slogans or something else that are printed onto blank products like t-shirts, mugs, tote bags, and more by a print provider. The products are only made once they have been ordered, so there is no waste (and therefore no cost associated with it).

Print on demand is fundamentally a form of dropshipping, but has the key twist of having custom designs. Therefore no product is exactly the same, leading to no proper competition – and you can charge whatever price you want. Don’t go crazy though – most people won’t pay £200 for a shirt.

That’s also not completely true, as some designs are very similar and some people just don’t care what they wear.

How Does the Money Work?

The main appeal of both models is you don’t have to invest in inventory upfront or handle any shipping logistics. Your profit comes from marking up the wholesale price you pay the supplier/printer. The wholesale price is the cheap price that the manufacturer offers – your customers pay the retail price (whatever you charge).

For example, if a print provider charges £8 for a t-shirt, you might list it on your store for £15-20. You pocket the difference minus marketing and operating costs.

For dropshipping, the prices can be ridiculous – on both ends – and some dropshippers can make up to 1,000% markups on the products. That usually only happens when customers massively overestimate a product’s worth, though.

Is Inventory Really Not Required?

One key thing is that with traditional dropshipping, the product selections are limited to what suppliers have available. With print on demand, you can create custom designs for virtually any type of printed merchandise. That’s because most print on demand suppliers keep thousands or even millions of stock readily available.

However, some dropshippers choose to order product samples to take photos, or purchase a small inventory of popular items. But inventory is generally not required for either model.

Despite that, I still recommend that you do order a few of whatever you sell for both models, as it allows for better photography and quality control. Also (especially for dropshipping), it is easier to make good adverts for your product.

I didn’t do this, mostly because I didn’t have a lot of funds, but it would definitely be better to do this if you can.

Which Products Sell the Best?

I’m going to break this down for dropshipping first, then we’ll focus on print on demand.

Generic products from traditional dropshipping suppliers may face more competition and price wars. Products should also have an element of coolness or interestingness, as this works well for ads and marketing.

Also, obviously, you should avoid niches and products with more competition, especially when there are players in the game who have been there a long time.

Here’s how to choose the best product for dropshipping:

It must be useful or fix some type of problem.
It needs to be good for marketing, so it needs to look or sound cool or interesting.
It needs to be different and not have any (or many) competitors – let’s be honest – as you won’t win against them.

Now let’s have a look at what to look for when you are finding/making designs for print on demand products.

You need to make the design interesting, vibrant (unless deliberately otherwise), and within your niche. When you have a website, you will have a niche (for example, this website’s niche is “Making money as a kid”), which you should focus on – don’t do something unrelated to your niche.

Make sure to include text, but keep it short and sweet.

Here’s how to make the best design for POD:

Make the design interesting.
Include colours, unless your design needs it to be bland.
Keep the design in your niche.
Add text – make it short and catchy!

How much money do they both make?

Print on demand, particularly now – because of how overcrowded the space is becoming now – is generally less profitable than traditional dropshipping.

However, POD does not usually rely as much on ads, and therefore it is typically lower risk – and requires less capital to start. That said, though, both are really cheap options if you want to start a business.

What are the Main Pros and Cons?

Like any business model, both dropshipping and print on demand have their advantages and disadvantages to weigh. Here’s normal dropshipping:

Pros:

Low startup investment and overhead costs
Don’t need to manufacture, store, or ship products yourself
Can be run from anywhere with just an internet connection
Easier to test product ideas with less risk
(Usually) decent profit margins

Cons:

Competitive with many resellers of same items, but this can be avoided
Quality control and shipping issues are not in your control
You are reliant on the supplier

Now here’s POD:

Very low startup investment and overhead costs
Don’t need to manufacture, store, or ship products yourself
Can be run form anywhere with just an internet connection
OK profit margins, depending on the supplier and your price