In the world of ecommerce, you can quickly get lost in the industry jargon. If you’re just starting out, it can be intimidating – with the abundance of choice between different business models and service providers, you may find yourself wondering what it is that you actually need. There are many companies that offer seemingly similar, but often slightly different, services and you need to grasp these differences to choose the best partner for your business.
To make this a bit easier, in this blog post I’ll go over these two topics:
- Drop shipping
- Print on demand
We’ll take a look at what each of them means and what their pros and cons are.
Ready? Let’s get started!
What is drop shipping? Drop shipping is a business model in which a store doesn’t keep an inventory of the products it sells, but purchases them from a third-party supplier who then ships the products directly to end-customers.
The way drop shipping works is that you have your online store, a customer visits it and buys something from you. When you receive the order, you then pass it on to your drop shipping partner, essentially buying the product from them on your customer’s behalf. The drop shipper then takes the product, packages, and ships it to your end-customer.
Pros of drop shipping?
- You don’t need huge investments to start your business. Since you pay for products only when a customer orders something, you don’t need to buy inventory beforehand and you’re not risking much if the product doesn’t sell.
- It’s easier to experiment. You can add new products to your store much more easily to test their popularity.
- It’s easy to add new products. When a new craze takes over the world (we all still remember fidget spinners, right?), you might want to jump on that train too. It can take a long time to start manufacturing something new on your own. A drop shipper could get the coveted product much sooner.
- You have lots of options to choose from. There are many drop shippers selling a variety of products. If you’re ready to dig in and do proper research, you’ll be able to find the perfect fit for your store.
- You have more time to focus on your store and your own brand. You don’t have to worry about maintaining stock, packaging and shipping orders, communicating with suppliers, etc.
- There’s no hassle with order fulfillment and shipping. The drop shipper will take care of that! Plus, working with drop shippers gives you access to much more appealing shipping prices than you’d be able to get for yourself.
- Your brand still stands out. Usually drop shipping companies are white label, which means that their branding never appears on any of the packages that end customers receive. Every order will look like it came directly from you.
Cons of drop shipping?
- You lose control over the order fulfillment process. Since you’re not handling the products yourself, you have to completely trust the drop shipper to do their job responsibly and maintain high standards at all times. This applies both to the order fulfillment and the product quality too.
- Smaller profit margins for you. Every order has two transactions – your customer buys the product from you, which you then in turn buy from your drop shipper. The difference between your retail price and the price that the drop shipper has set will be your profit. If you sell your own inventory, you get keep the entire amount your customer paid.
- It may be harder to emphasize your own brand. Most drop shippers will often offer you ways to promote your brand, but you might always want a little more. For example, you might want to use some custom packaging or add promotional items to your orders. Depending on the drop shipper, your choices in this area may be limited. Plus, your drop shipping partner also becomes responsible for representing your brand, which again means losing some control for you.
- There’s more competition. If you’re using a drop shipper to sell a product, it means that there are other sellers out there who are selling the exact same product purchased from the same drop shipper. This means you’ll need to find your unique selling point for the product.
Who is drop shipping for? The drop shipping model is ideal for stores that are starting out since it doesn’t require as much capital as you doesn't have to order your own stock. This model gives you freedom to experiment more, but keep in mind that it also means smaller profit margins and giving up some control over the product quality and the entire fulfillment process
Print On Demand (POD)
What is print on demand? With the print on demand (POD) model, your designs are printed on products only as orders come in and only in the quantity that the order asks for. Similarly to the drop shipping concept, POD means that you don’t need to buy large quantities of products when you get started – each order is printed as it comes in.
What are the pros of POD?
- You don’t need to print anything in bulk. In POD, the emphasis is on the “on demand” part – the printer will only print the product once it’s ordered. This means you don’t have to gamble with your money – you won’t end up with a huge stock of t-shirts with a design that doesn’t sell as well as you’d hoped.
- You don’t need to buy printers yourself. Your POD partner (i.e. BlankCo) takes care of all the technical parts of the printing process – you don’t need to buy any printing machines, which can be very expensive. And you don’t need to learn how to print a product either.
- You can experiment with designs easily. POD also lets you take more risks with the designs you offer – you can come up with something more unusual and see if your customers dig the new thing. Since products are printed on demand, you’re not making a huge investment on a thing that might not sell in the end. If a design isn’t as popular as you might like, you can easily remove it from your store.
- It’s easy to customize your designs. You can offer more customization options for your customers – for example, your customers can incorporate something unique of theirs, like their name. With POD, you can print just that one t-shirt, and you won’t be stuck with a whole bunch of shirts that have someone’s name on them.
- You can experiment with different products too. You can experiment not only with designs, but with types of products too. Adding new ones to your store will take just a few steps. If you’re already selling T-Shirt with your artwork, how about adding some Phone Case? Or even Baby Romper if you’re thinking to expand your target audience base.
Cons to the POD model:
- You lose control over the fulfillment process and quality of the products. The same as with drop shipping, POD means that you don’t see each product itself, so you just have to trust the printer to do their job properly. This is why it’s important to test your products before you start selling to see how they look.
- You depend on your printing partner for products and their availability. POD companies work with different suppliers to source products. This means there are a lot of moving parts, and sometimes products may go out of stock or become unavailable.
- Order fulfillment takes longer. Since every product is printed on demand, it takes longer to fulfill orders than it would if you already had available stock. Our average order fulfillment time is 3 days, and shipping times go on top of that. As a store owner, you have to manage your customers’ expectations – let them know that each product is printed on demand and that this takes a bit longer than sending out an already made product.
Who is POD for? POD, just like drop shipping, is ideal for entrepreneur who starting out a store, designer who creating their own brand, influencer who strive to produce some products. It’s also great if you want to grow your business and test new products. POD gives you the freedom to experiment with new ideas with ease. But keep in mind that the POD model means that order fulfillment takes longer – it’s something you don’t have to worry about if you have a stock of already printed products at your disposal.
Now it’s your turn!
This more or less covers what drop shipping and print on demand is all about. Now the ball is in your court – take a look at your business idea. Give it careful consideration – what is it that you want to do exactly? Once you’re certain of your goal, you can start looking into the means of achieving that and finding the right partner that can help you.
Whoever you end up choosing as your partner – be it BlankCo or someone else – make sure you do proper research beforehand. You’ll want to commit to a partner that’s really able to help you with all that your business requires.
Do you have any questions about drop shipping or POD? Or maybe you’d like to tell us about your experience with these methods? Feel free to share it all in the comments below!