Both dropshipping and print-on-demand represent different ways to fulfill products, and they’re both popular business models. They also don’t require holding inventory or investing in upfront costs, making them great options for both small and large-sized businesses.
The main difference between them? How involved you want to be in the development of the products and the customer experience with your brand. But that’s just the tip of the iceberg. There’s much more you need to know before choosing which one will work best for your business.
In this article, you’ll learn everything you need to know about these concepts, and how to use them to grow your online store. Are you ready?
Dropshipping is a fulfillment method and a business model that allows stores to sell products without worrying about holding inventory since it’s handled by a third-party supplier. Usually, you’re selling ready-made products that will be sent to your customers without modifications. When a customer makes a purchase, the dropshipper selects the product from their stock, then packs and ships the item directly to the customer on behalf of the brand.
Print-on-demand, or POD, is also a fulfillment method and business model in which products are only printed after they’re ordered. This allows business owners to sell exclusive, personalized items like custom t-shirts, accessories, posters, and mugs, for example, with no inventory and no minimums. When you get an order into your ecommerce store, your POD supplier will pick out the product from their stock, customize it, pack it, and ship it to your customer.
Read more: 23 Bestselling Print-on-Demand Products
As you can see, in both cases the supplier ships products directly to your end customer. With print-on-demand, though, you have the added benefit of being able to personalize the product with exclusive designs, which adds value to your brand.
Here are some examples of generic products you can sell with dropshipping:
Health and beauty products
Learn more about what products work well with dropshipping in the article: Profitable Dropshipping Niches: How to Find Them + Top Picks
Here are some examples of custom products you can sell with print-on-demand:
Printful offers a range of premium products for print-on-demand. Source: Printful
Now you understand what they’re about, let’s learn more about these types of businesses so you can decide which is best for you.
Print-on-demand and dropshipping have a lot in common. Maybe that’s why so many people tend to confuse the terms. In this section, we’ll assess where they overlap.
One of the main reasons many online stores choose print-on-demand and dropshipping is because neither of them require buying inventory in advance.
You can set up a store using an ecommerce platform or marketplace, add the products to your storefront, and start working on your marketing strategy to attract customers and drive sales. In both cases, you only pay for a product when you sell it.
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. In fact, companies that use dropshipping as their business model can increase their profitability by up to 50% for lowering costs and investing that extra time and money on other things, like their marketing strategy.
Find out more dropshipping stats with our Top 10 Dropshipping Statistics You Need to Know in 2023
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 to test how your audience reacts to them. More on how that works in our next point.
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.
Cute example of a seasonal embroidery product. Source: Printful
Unless you’ve worked in this industry before, it’s possible that you don’t know much about production, packaging, and shipping. This is also common ground for both dropshipping companies and print-on-demand suppliers: they have the know-how you need to avoid beginner mistakes in your business.
When you pair up with a POD or a dropshipping partner, you borrow their experience by having their professional teams working for your brand. And the best part? You only pay when you sell something, so no need to worry about dealing with payroll.
Here’s another similarity between dropshipping and print-on-demand: they’re both trending. How do we know? We checked the search intent for each term on Google Trends, considering the past 5 years for the United States.
As you can see from the graphics below, both terms have upward trends. That’s a good sign that these models are becoming more and more popular, even as the ecommerce boom of 2020 has started to cool down. The steady growth also tells us that these business models won’t fade away any time soon.
Pro tip: you can use Google Trends to research the niche you’re interested in and will have more chances of succeeding in your dropshipping or POD business.
Whether you have your own website, a storefront on a popular marketplace, or even want to sell products on social media, 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.
Source: Sales Layer
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
Unfortunately, this is another thing that POD and dropshipping have in common. Whether you’re selling t-shirts with your own custom designs (using POD) or something like Stanley cups (via dropshipping), when your client buys a product from your store, they pay you the retail price.
Then, you’ll need to have it printed (in the case of the t-shirt), packed, and shipped. The price you pay your provider includes that service, not just the item itself. What’s leftover from what your customer paid for each product (your profit margin) might be a little less than if you were handling the entire process by yourself.
One way around this? Charge more by selling high-quality items as well as products that potential customers truly value (and are willing to pay more for). Working within a specific niche will raise your chances of achieving that goal.
Learn more about how to choose a niche that will resonate with your audience: How to Find a Niche for Your Online Store + 100 Niche Market Ideas
Another way to boost your profit margin within print-on-demand or dropshipping is by offering a unique experience through custom packaging or sending heartwarming gifts (pack-ins) with your products. More on that later.
Last but not least, work on your brand by growing a community that relates to your online store and products so much that they’d gladly pay more.
Another similarity? With both dropshipping and print-on-demand, relying on a solid, trustworthy supplier is essential.
We’re sure you’re planning every detail of your own brand carefully, so product quality is super important. Whether you’re thinking of selling custom products or not, when you work with a dropshipping and/or print-on-demand provider, you’re giving up control on many parts of the process.
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.
Here are some tips on how to choose the best supplier:
Research: since this is a growing market, you’ll find many different POD and dropshipping services out there. Don’t settle on the first one that comes your way.
Compare: make a list of all your options and compare them based on their expertise, reach, rates (product prices and shipping costs), customer service, etc.
Listen: what are other people and companies saying about their services? Take time to read comments and testimonials.
Test it out: place an order as a regular customer to get to know their products and services before you seal the deal.
Printful, for example, is a print-on-demand supplier trusted to deliver over 62.5M items across the globe since 2013. With a wide catalog of apparel, home decor, and accessories, not to mention fulfillment centers all over the map, Printful helps online businesses sell premium custom products in an easy and sustainable way.
Did you know that 90% of consumers say they’d buy more if a store offers free shipping? Yes, that’s how important shipping costs are for your business, and it doesn’t matter if it’s dropshipping or POD.
Why? Simply because print-on-demand and dropshipping suppliers can ship the products straight to your end customer since they usually have multiple fulfillment centers (so it’s possible to use the one that’s closer to your customer). Many also have more power of negotiation with the delivery companies—meaning lower shipping costs.
Pro tip: Don’t forget to take shipping costs into consideration when defining your product prices.
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.
When you leave this part of the process in the hands of a POD or dropshipping provider, 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.
Now that we know what POD and dropshipping businesses have in common, it’s time to understand where they differ.
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.
This is important to think about since dropshipping stores usually sell the same products. That’s why the competition is tougher among dropshipping stores compared to businesses that choose to work with print-on-demand products.
To see what I mean, just look for a default product on the marketplace of your choice. Let’s say, a microwave. You’ll probably see the same option of brand in different stores. How do stores compete? By slashing prices. The user will most likely pick the cheapest option, or the one with the lowest shipping costs. That’s great for the user but it means even lower profit margins for business owners.
The fact that POD allows you to customize your products gives you an advantage over your competitors. What would you pay more for, a plain white cotton tee or a t-shirt with original art? Most of us would happily pay more for a unique statement than something you can find anywhere.
Many people associate dropshipping products with low-quality items. That’s because many stores that use dropshipping focus on cheap options to be able to compete on price.
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 and all POD providers offer high-quality blank products. 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.
While both POD and dropshipping offer the opportunity to sell a large range of products, dropshipping is usually more limited in terms of offering unique items. As we mentioned above, many businesses end up selling the same products, which makes it harder to stand out.
What about print-on-demand? It offers infinite options. POD allows you to customize different types of products and make them totally original, adding extra value to every item. Plus, it’s much easier 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.
This is one of the major differences between dropshipping and print-on-demand businesses. With dropshipping, you can sell an enormous variety of items your supplier has in inventory—but so can your competitors. That means there’s no differentiation in terms of the products themselves. Print-on-demand is different though. It allows you to get creatively involved and come up with truly original pieces.
How does it work? Instead of just picking a product from stock, packing and shipping it to the end customer, the POD supplier will customize it with your design. This brings extra value to your offering and your brand, especially if you know your audience well and can deliver what they’re interested in.
Check out ND Renegade. The brand’s designs are focused on neurodiversity, which is not a topic we usually see big retailers tackling. Thanks to POD, designer and entrepreneur Sally Willbanks uses her custom products to raise awareness, and help customers do the same.
Read more about her story in ND Renegade: an Ode to Neurodiversity.
How can you create original products?
To customize an item, you’ll need a design that’ll be applied on a white-label product of your choice. You can hire a professional designer, use online tools, or start designing yourself. If you don’t know how to use Photoshop, for example, there are other options out there. You can create custom products online in just a few minutes with Printful’s free Design Maker. Learn how it works in this informative video.
Different techniques and products can bring different results. If you want to start a clothing brand, for example, experiment with DTG, all-over print, or embroidery. If you’re more inclined towards home decor, think about including posters, canvases, and flags in your collection. The world of POD is your proverbial oyster!
Get more inspiration from our article: 50 T-Shirt Design Ideas for Every Occasion
Offering quality products is a must if you want to stand out in ecommerce, 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?
If you choose dropshipping as your business model, that mission gets harder because, as we mentioned before, there’s not much room for personalization.
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.
Alternatively, print-on-demand has the added advantage of giving you room for personalizing your items in detail using:
Essentially, print-on-demand can help you hone your branding and make your business stand out.
Source: Sticker Mule via Unsplash
As usual, every case is different, so there isn’t one correct answer. You need to assess your profile as an entrepreneur, your business motivations and goals, how much time and effort you want to put into your project, etc.
Print-on-demand is the ideal business model for people who want to sell custom products without having to worry about inventory and upfront costs. It’s perfect for artists, influencers, companies, and bands who want to sell merch online.
Dropshipping is the best choice for businesses that want to sell online without buying inventory or getting creatively involved with the development of the products. It’s perfect for upcoming, practical entrepreneurs with little time and experience.
In general terms, print-on-demand and dropshipping are great, cost-effective, and competitive solutions that can help your business succeed. So, what’s best for you? We hope this article has helped you find the answer you’re looking for!
Questions? Leave them in the comments!
Gabriela is a creative copywriter, professional blogger, and passionate content marketer with experience in publicity agencies and international companies. She loves sharing her ideas and new trends to bring inspiration to everyone around her.