Print-on-demand vs. dropshipping: key things to consider
Now you understand what they’re about, let’s learn more about these types of businesses and what to consider so you can decide which is best for you.
Initial costs
Not having to buy inventory means that you don’t need much money to start a print-on-demand or a dropshipping business. All you need is a good idea and dedication to your project.
When we eliminate stock, we’re not only cutting out the cost of the products themselves (which might not be recuperated) but also the cost of managing that inventory, like with warehousing space and employees.
Print-on-demand
For a print-on-demand business, you might need to hire a designer or invest in mastering your own design skills. In addition, ordering product samples to ensure quality and building a strong brand presence online can all add to the initial budget. While these costs are manageable, they play a crucial role in customer satisfaction and long-term success. A well-thought-out branding strategy can help a POD store stand out.
Learn more: 12 Emerging Print-on-Demand Business Ideas to Get Started with Right Now
Dropshipping
Reports show that ecommerce business owners that use dropshipping can increase their profitability up to 50% by lowering costs and investing that extra time and money in other things, like their marketing strategy.
Even though dropshipping eliminates the need for upfront inventory investment, many dropshipping companies end up investing in product testing, research tools, and advertising to find winning products. Since the stock levels and shipping are controlled by the dropshipping supplier, working with the right partners is essential to avoid unexpected costs related to refunds, delays, or poor-quality products.
Risk level
Since there’s not much money involved in the beginning for a dropshipping or a print-on-demand business, the risks are considerably lower. And more importantly, there’s room to make mistakes and learn from them without losing capital.
You can, for instance, explore niches that no one’s touched yet or launch new products quickly to test how your audience reacts to them.
Print-on-demand
In print-on-demand, risk is tied to the appeal and demand of the designs. If a product doesn’t sell, there’s no financial loss from unsold inventory, but the effort spent on design and marketing can go to waste. Additionally, print quality inconsistencies or extended fulfillment times can affect how satisfied your customers are, making it essential to choose a reliable POD provider.
Read also: 20 Critical Print-on-Demand Mistakes and How to Avoid Them
Dropshipping
The dropshipping model carries a different type of risk—supplier reliability. Because you’re selling products sourced from a dropshipping supplier, you have little control over product availability, quality, and fulfillment speed. A sudden stock shortage or shipping delay can lead to unhappy customers, refunds, and disputes. To minimize this risk for your dropshipping business, diversify suppliers and set clear customer expectations about shipping times and potential delays.
Inventory management
One of the main reasons many online stores choose print-on-demand and dropshipping is because neither of them require buying inventory in advance.
That said, inventory management still plays a crucial role in ensuring a smooth shopping experience. Since fulfillment is handled by a third-party supplier, business owners must rely on their efficiency, stock availability, and shipping speed. While POD and dropshipping share similarities in this regard, there are key differences in how each model operates.
Print-on-demand
With print-on-demand, products are made to order, meaning you won’t have to worry about stock shortages. Instead of storing pre-made items, suppliers print and fulfill orders as they come in, reducing the risk of overproduction. But this also means slightly longer fulfillment times, as each item is produced from scratch before being shipped.
It's essential to go for a POD partner that can maintain quality and consistently deliver on time. Remember: these are the people that will stock, pick, pack, and ship your items, so they’ll need to offer the best service—not only to you, but to your customers as well. A good supplier will have efficient production workflows, high-tech printing, and multiple fulfillment centers to speed up delivery times.
Take Printful, for example. Since 2013, Printful has fulfilled over 99.5 million custom products. With a wide catalog of apparel, home decor, and accessories, not to mention fulfillment centers all over the map, Printful helps online businesses sell personalized items in an easy and sustainable way.
Source: Printful
Dropshipping
In dropshipping, inventory management can be trickier. Since sellers rely on third-party suppliers to store and ship ready-made products, there’s always the risk of items going out of stock—especially if multiple businesses source from the same supplier. This can lead to unexpected delays, frustrated customers, and missed sales opportunities.
To minimize these risks, many dropshipping businesses use automation tools that sync supplier inventory with their online store in real time. This way, product availability is always up to date, helping sellers avoid listing out-of-stock items. Since dropshipped products aren’t customized, competition can be fierce, and many businesses end up competing on price.
Product selection
Both print-on-demand and dropshipping let you offer as many items as you want in your store since you don’t need to stock physical products. That means you can diversify as much as you like (while respecting your target market and strategy, of course).
Let’s imagine you want to start your own clothing line. You may think about adding some trendy apparel or seasonal designs. And thanks to the fact that you don’t need to purchase inventory in advance, you can experiment with a huge variety of items using both business models.
Print-on-demand
The success of a POD business depends largely on creativity and the demand for unique designs that can be printed on apparel, accessories, and home decor. To stand out, you need to be on top of trends and customer preferences, and create visuals that resonate.
Print-on-demand offers infinite design options. You can customize different types of products and make them totally original, adding extra value to every item. Plus, it’s easy to hop on the latest trends.
Want an example? Take Shakira. The singer found another way of making money off of her successful partnership with Bzrp by selling custom merch centered on one of her latest hits.
Source: X
Dropshipping
Dropshipping, on the other hand, provides access to a much wider range of products, from electronics to beauty products and home goods. The flexibility to sell trending items on your dropshipping store makes it an attractive option for those who don't want to stock physical products and want to experiment with different niches.
Be aware that many stores that use dropshipping focus on cheap options to be able to compete on price. As a result, many people associate dropshipping products with low-quality items. Alternatively, print-on-demand enables you to offer exclusive custom products that are often seen as higher quality.
This doesn’t mean that all dropshipping products are cheap. You need to find a supplier that delivers the quality your brand wants to offer. Choose a provider that displays all the information about their products, including what they’re made of and where they come from. You can also order samples. It’ll give you a better idea of the quality you’re dealing with.
Profit margins
Understanding profit margins is key to running a successful ecommerce business. Whether you choose print-on-demand or dropshipping, your earnings depend on product costs, pricing strategies, and how you position your brand. While both business models eliminate the need for inventory, they differ in costs and potential profit margins.
Print-on-demand
When selling POD products like t-shirts with your custom designs, your customer pays the retail price set in your store. However, your costs include not just the base price of the item but also the printing, packaging, and shipping services provided by your POD supplier.
Since these costs are bundled into the price you pay the supplier, your profit margin may be lower compared to handling fulfillment yourself. To maintain healthy margins, consider:
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Charging more for high-quality, unique products that customers truly value
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Focusing on a niche where customers are willing to pay a premium
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Enhancing the experience with custom packaging or small gifts (pack-ins)
Source: Printful
Plus, shipping costs play a crucial role in profitability. Many POD suppliers have fulfillment centers worldwide, so that items can be shipped from the closest location to your customer, potentially reducing shipping expenses.
Read also: How to Use Free Shipping to Increase your Average Order Value
Dropshipping
With dropshipping, you sell ready-made products (like Stanley cups) without holding inventory. Your supplier handles storage, packing, and shipping, and you pay them a wholesale price when a customer places an order.
In general, dropshipping offers higher profit margins when sourcing products at low costs, particularly from overseas suppliers. However, this comes with some tradeoffs:
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Price wars—Since many sellers offer the same products, competition can drive prices down
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Lower perceived value—Unlike POD, where designs add uniqueness, dropshipping products often compete on price alone
To counter these challenges, build a strong community focus, offering exclusive bundles, or improving the shopping experience with premium packaging.
Learn more: Dropshipping Products With High Profit Margin + Examples
Discover how to choose a niche that will resonate with your audience: How to Find a Niche for Your Online Store + 100 Niche Market Ideas
Customer service
Customer service can make or break an ecommerce business. Whether you’re running a print-on-demand business or dropshipping store, how you handle customer inquiries, complaints, and returns plays a big role in building trust and securing repeat buyers.
Print-on-demand
Compared to dropshipping, managing customer service in print-on-demand is usually more straightforward. Since each order is custom-made, you won’t have to deal with common inventory issues like running out of stock.
However, occasional hiccups—like minor printing errors, color variations, or longer-than-expected shipping times—can still happen. Returns and exchanges can also be trickier than in traditional retail, as products are made to order and often can’t be resold.
It’s a good idea to set clear expectations about fulfillment and shipping times right from the start. Partnering with a trusted print-on-demand provider can also make a big difference, helping you maintain quality and deliver a smooth shopping experience.
Dropshipping
Dropshipping can be more challenging when it comes to customer service, especially if you’re sourcing products from overseas suppliers. Shipping delays, inconsistent product quality, and incorrect orders are some of the most common issues dropshippers face. Since you don’t have direct control over fulfillment, handling disputes and refund requests may require extra time and effort.
To keep customers happy, focus on transparency. A well-structured refund policy, clear product descriptions, and proactive communication can help set the right expectations. Providing tracking updates and responding quickly to customer inquiries will also go a long way in building trust and reducing frustration.
While running a dropshipping business comes with its challenges, prioritizing customer support can help you stand out from competitors and turn potential setbacks into opportunities.
Marketing and branding
Offering quality products is a must if you want to stand out as an online business, but carefully-crafted branding is just as important. Everything from how your brand is represented to the experience your customers have matters when it comes to creating value and building loyalty. That’s what branding is. But how does it differ for dropshipping and for POD?
Print-on-demand
One of the biggest advantages of print-on-demand is the ability to personalize your products. Since each item is made to order, you can create exclusive designs and tailor them to your niche.
Plus, print-on-demand has the added benefit of allowing you to customize your products even further with:
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Exclusive designs
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Custom labels
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Inside labels
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Outside labels
Essentially, print-on-demand can help you hone your branding and make your business stand out.
Beyond product design, POD also gives you the flexibility to adapt to trends quickly. Whether you’re selling on your own website, a marketplace, or through social media, you can easily test new ideas and launch products.
Dropshipping
Dropshipping makes it harder to establish a distinctive brand since the products you sell are often the same as those offered by many other businesses. Unlike POD, where your designs add uniqueness, dropshipping relies on other strategies—like standout marketing, strong messaging, and customer engagement—to build a recognizable brand.
Some dropshipping suppliers may offer the option of customizing the package or adding package inserts (pack-ins like greeting cards or personal/thank you notes, coupon codes, small gifts like stickers or postcards, etc.). But that’s about it, since the product itself is the same for many businesses.
Read more: Private Label Dropshipping: What It Is and What to Sell to Succeed
Source: Sales Layer
Whether you have your own website, a storefront on a popular marketplace, or even want to sell products on social media, both dropshipping and print-on-demand products can work well for you. All you have to do is find a supplier that connects with your selling platform of choice.
In this way, you should think about the potential of social commerce in your marketing strategy. It’s easy to do with both print-on-demand and dropshipping businesses, and has been growing in popularity over the past few years.
Take TikTok, for example: 20.6% of consumers who frequently purchase on social media buy directly on this platform. In fact, 67% of its users admit they feel inspired to shop, even if that wasn’t their original plan.
You might also want to check out Why Social Commerce is a Must-Have Marketing Strategy
Competition
According to marketing guru Phillip Kotler, “If you’re not a brand, you’re a commodity.” What does that mean? If you don’t add personality to your products/services, your customers won’t see any difference between you and your competitors.
Print-on-demand
Print-on-demand gives sellers an edge by allowing them to customize their products. A plain white cotton t-shirt may not stand out, but a t-shirt featuring an original design or artwork does. Customers are often willing to pay more for something unique, giving POD sellers a competitive advantage that dropshippers don’t always have.
Dropshipping
Dropshipping tends to be more competitive because pricing is often the main factor that sets one store apart from another. If you search for a generic product—let’s say, a microwave—on an online marketplace, you’ll likely find multiple stores selling the same model. How do they compete? By lowering prices. While this benefits customers, it puts pressure on business owners, leading to slimmer profit margins.
Opportunities for growth
Steve Jobs used to say “start small, think big.” The message behind that? Use the tools you have now to start your project and find ways to scale it in the future. And that applies to both dropshipping and print-on-demand.
Imagine how challenging it would be to scale a business when you’re the one doing the production, packing, and shipping yourself. Even if you manage to do it, it’d probably affect timing and quality, resulting in a frustrating experience for your end customer and, honestly, for you too.
[Pull quote] Find out How Print-on-Demand Made Selling Online Easy for Illustrator Alice Potter
When you leave this part of the process in the hands of a POD or dropshipping supplier, the chances of growing your business are much higher, even if you just start selling a few items per month. The process is the same for 1 or 1K products—they’ll take care of production and fulfillment while you focus on marketing your business.
