Weighing Dropshipping Pros and Cons: The Ultimate Breakdown

Here’s the big question: to dropship or not to dropship? (With apologies to Shakespeare.)

If you’ve landed on this article, you must be considering launching an online dropshipping store and asking that question to yourself. With around 27% of online retailers using dropshipping for their businesses, it’s clear that this is a viable way to run a store. But would this approach work for you?

The best way to answer that question is to consider dropshipping pros and cons. Once you have the whole picture and you’ve looked at this business model from both sides, you can decide if you want to try it.

So, let’s see what the advantages and disadvantages of dropshipping are. But before that, here’s a quick intro to what dropshipping is.

How does dropshipping work?

Although the name might seem deceptively long, the dropshipping business model works in a simple way. It consists of 3 steps:

1. The customer places an order on your online store and pays you the retail price you’ve set

2. The order goes to your dropshipping supplier, who charges you their wholesale price for the product

3. The dropshipping company fulfills and ships the order to your customer

Source: Printful

At the end of this cycle, your profit is the difference between the price you set on your store and the wholesale price the dropshipping business charged you. The dropshippers fulfill orders, while you are responsible for all customer interactions, sales, marketing, and maintaining your ecommerce store.

Read more: What Is Dropshipping? The Ultimate Guide to Selling Without Inventory in 2024

Now that the basic principles are clear, let’s compare the pros and cons of dropshipping.

The pros of dropshipping

Let’s start with the positives—here are some reasons dropshipping stores are profitable and beginner-friendly ecommerce choices.

No need for inventory

Let’s say you want to start an online store selling t-shirts. If you choose not to use the dropshipping model, you’ll need to buy and keep the blank shirts at home or in a storage space. You find your supplier and buy the t-shirts in bulk, and now you have to print and fulfill all customer orders as they come in.

It might sound manageable if you sell smaller items and don’t get more than a few sales per day. However, holding your own inventory can quickly become a nightmare if you deal with bigger products and large order volumes.

Source: Printful

Imagine you want to sell custom framed prints, for example. How much space would you need to store frames alone for different print sizes? And we’re talking only one type of product here. Your online business will probably sell more than just one item (although that depends on your store’s concept).

When you work with a dropshipping business, they handle all inventory management and order fulfillment. This means you don’t have to worry about storage space, storage costs, or anything else to do with the physical products—your main concern is to sell products and handle customer care.

Working with a fulfillment company also means your dropshipping store is easy to scale. No matter the order volume you get (and you’ll be aiming big, of course), your dropshipping partner will handle it.

Low startup costs

Since you don’t have to buy inventory upfront or take care of order fulfillment, you don’t need a large investment to start your own online store. This makes the dropshipping business model very appealing to budding online businesses.

It’s not just about inventory costs, which we already discussed. If you want to offer customized products, like printed or embroidered apparel, you’ll need to buy the equipment to create your items. That’s a big-ticket expense that very few beginners can afford. Working with a dropship business like Printful lets you avoid these costs altogether.

Source: Printful

The low upfront expenses make dropshipping profitable from the very beginning of the process. You still need to consider your overhead costs, like investment in marketing, your store’s ecommerce platform, etc. But, removing the costs for buying, storing, and manufacturing the products from this equation makes dropshipping one of the business models with the lowest barrier for entry.

Learn more: How Much Does It Cost to Start Dropshipping in 2024: Breaking It Down

Wide range of products

If you fulfill orders yourself, you’re limited by the number of different products you can offer on your store—sourcing and storing them alone will take up heaps of your time and space. This problem completely disappears with dropshipping suppliers because they let you go wild when it comes to product variety.

Since you don’t have to work with the products yourself, you don’t need to worry about fulfilling, storing, and handling the items with special care. You can mix and match your suppliers’ offerings however you wish.

For example, if you choose Printful as your print-on-demand dropshipping partner, you get 383 premium products in various categories, from apparel to accessories and home decor.

And you can always expand your network of partners. If your current supplier doesn’t carry an item you’d like to add to your store, see what other dropshippers offer.

Read more: 160+ Best Dropshipping Products and Where To Find Them

Easy to set up

Another reason why dropshipping is preferable to traditional retail when you’re a small business starting out is that it’s easy to set everything up.

Most dropshipping companies, including Printful, offer integrations with top ecommerce platforms. The way it works is you set up your online store on the ecommerce platform you prefer. When your store is ready, connect it with Printful, pick the products, add your designs, push them to your store, and start selling.

Source: Printful

When customers place an order on your store, your fulfillment partner receives and fulfills it automatically.

Depending on the ecommerce platform or marketplace you’ve chosen, the setup might take a bit longer (while Shopify or Etsy is relatively easy, for example, an Amazon integration will be for more seasoned pros). But no matter your experience level, you can find the right tools to set everything up and running in no time.

Low-risk business model

We all know how things go in business. The demand fluctuates, tastes and trends come and go, and what is popular today might not be popular tomorrow. Working with dropshipping suppliers means you don’t get stuck with heaps of unsold items if the trend you jumped on goes away. You’re free to experiment with new ideas and designs.

Dropshipping companies like Printful regularly add new items to their product catalog. Your brand can grow by quickly adding new products to your store and showing your customers you’re up to date with the latest trends.

This also means that compared with traditional retail businesses, your online store can launch new products much quicker. If your fulfillment partner has an item you like, all it takes is adding it to your store. You don’t need to research third-party suppliers, negotiate deals, test everything, etc. Your dropshipping supplier will have done it all for you.

More time to grow your brand

With so much of the technical side of things taken off your plate, you’re left with many more opportunities to focus on growing your online business. You can spend more time on building your store, marketing efforts, customer care, and other aspects of your business.

Instead of talking to manufacturers, you get more time talking to your buyers. You can put more effort into creating designs, adding products, developing sales strategies, and everything else.

If you have to juggle all the responsibilities of fulfilling orders on top of that, your attention is constantly split, and your brand might not grow as quickly as you’d like.

Read more: 10 Tips on How to Grow Your Dropshipping Business

The cons of dropshipping

Having looked at the main benefits that dropshipping offers, let’s discuss some hard truths. Although there are many pros, there are several cons of dropshipping that you need to take into account before you take the plunge.

High competition

There’s a reason why the global dropshipping market is estimated to exceed $300 billion in 2024. The demand is huge, and there are many dropshipping platforms to choose from.

Source: Statista

However, this also means that the competition is fierce.

All the best dropshipping suppliers work with other sellers just like you, selling the same products. This means you need to find profitable dropshipping niches with unique selling points.

Read more: Top 10 Dropshipping Statistics You Need to Know in 2024

You’ll have much better luck by selling unique, well-designed custom products—that’ll help you stand out from the crowd and position your products in the market better. One way to achieve this is by working with a print-on-demand company like Printful, which offers dropshipping services. In this case, you can customize each item with your unique design.

The fight for survival in the dropshipping landscape can be challenging, but your business can flourish if you find your niche. So make sure to do proper market research to turn your small business into a success.

Lower profit margins

Although you avoid upfront costs and other expenses related to inventory management and fulfillment, it comes with a price. And this price is low profit margins compared to what you could get if you made or sourced products in bulk from a third-party supplier.

This means you must carefully consider how you price your products on your store. Your profit margins need to be high enough to justify having your own store, but the prices cannot be too high for your niche. Otherwise, customers simply won’t shop on your store.

There’s no single correct answer for pricing your items. It all depends on what your store sells, who your customers are, how much they’re ready to pay, how your competitors price their items, and other factors. You must also consider other aspects, like incorporating shipping costs into your price, to entice customers with free shipping. People also enjoy sales, so your profit margins need to be healthy enough to allow for the occasional special offer.

Read more: How Profitable Is Dropshipping In 2024?

No control of the supply chain

Although having a dropshipping business gives you a lot of freedom for experiments, at the end of the day, you’re still reliant on your suppliers’ catalogs and quality standards. Your store’s best-selling product might suddenly get discontinued by your supplier, leaving you high and dry.

To avoid this, don’t rely on just one product; offer a diverse selection of items. Then, a change in one item won’t disrupt your entire store. You can also find dropshipping suppliers that offer the same or similar items and use them as a backup.

Your suppliers are also businesses that deal with different problems. They might run out of stock because their partners have issues, equipment can break down, etc. In the global supply chain, one broken link can disrupt the business for many participants, so you must prepare for such a situation in advance.

Source: Printful

When working with a dropshipping partner, check how transparent they are in their communication about specific issues. For example, if you sell with Printful, you can always check the Recent updates page, where you’ll find the latest fulfillment times and other news that might affect your store.

Limited control over quality and branding

Since you’re not handling the orders and you don’t see each item before it’s shipped to your customer, you need to have absolute trust in your fulfillment partner that their product quality is top-notch. This means taking your time to find truly reliable suppliers that won’t let you down.

Before you settle on a supplier, get some samples to test their quality and the entire order process. This will let you experience the customer journey from start to finish, and you can rest easy later, knowing that you’re working with a dropshipping business that knows how to take care of things.

Another aspect to consider is that working with a dropshipping supplier means you get fewer branding options than if you made the products yourself. Dropshipping companies are usually white label, meaning their branding never appears anywhere on your customer orders. However, the options for adding your branding to the products can be limited.

Source: Printful

See what your supplier offers in this regard and how much it costs. The extra expense can be worth it if it means growing your brand awareness.

Check out the branded dropshipping options available with Printful, including inside and outside labels, custom pack-ins and packaging, and more.

More complex customer care

Since you’re not handling orders yourself, this can sometimes mean more difficulties if your customers have questions about their purchases. You’ll often need to contact your fulfillment partner before answering your customers’ questions. This kind of three-way communication can take up more time than if you had all the answers at hand immediately.

So make sure to always manage your customer expectations beforehand by clearly communicating expected fulfillment and shipping times.

Online shopping also means buyers don’t see the item until they’ve bought it and it has arrived at their homes. It can make people more hesitant to buy, especially from new stores. Detailed product descriptions that address possible questions before they’re asked will be invaluable to you.

You also need to know your dropshipping products in and out to be able to answer any questions about them. The best way to do that is by getting your own sample orders. But if you can’t afford to order each product for yourself, carefully read the reviews other people have left on your dropshipper’s page to learn more about each item.

Remember that although someone else handles the orders, the buyers purchased the product from your store, so it’s up to you to ensure customer satisfaction.

Shipping times and setup

Depending on where you, your buyers, and your suppliers are located, the shipping process may take quite some time, not to mention the shipping fees people will have to cover.

Ideally, your dropshipping partner should have many facilities worldwide to reduce shipping times and expenses. Working with a partner with only a single location can result in unexpectedly high shipping costs for your buyers.

This is something you’ll want to avoid. Unexpected extra costs like shipping fees are the most frequent cause for cart abandonment—48% of people name it as the main reason why they decide against the purchase at checkout.

Another potential problem is shipping delays. If you source your items from a single location, depending on where it is, your buyers might have to deal with long shipping times and customs delays.

When researching your potential partner, check how extensive their fulfillment network is. For example, here’s a map of Printful’s locations, which ensure global coverage.

Source: Printful

Another way to avoid this problem is to work with different suppliers around the globe. However, in this case, it’ll be much harder to juggle the available shipping methods on your page, and the entire setup might become too complex to outweigh the benefits.

All the cards are on the table—now’s your turn

So, is dropshipping worth it?

That’s a question you’ll need to answer for yourself, taking into account all the factors we’ve outlined in this article. Before settling on dropshipping as your ecommerce business model, do proper research into the available suppliers and the niche you’ve chosen to ensure success.

The main thing to keep in mind is that even when you’re working with a dropshipping supplier, you’re the one who’s responsible for a great customer experience on your store.

So, choose your fulfillment partners wisely, and starting a dropshipping business should be smooth sailing. 

Read more:

• How to Start a Dropshipping Business in 2024
• Unlocking White Label Business Opportunities