Online shopping is skyrocketing
The many benefits of print-on-demand
Printful, in collaboration with Digital Commerce 360 in 2021, did a survey of 66 retailers and brands about their top priorities and main challenges in increasing ecommerce revenue.
POD fulfillment, in which products are produced only after a customer orders them, can help retailers and brands increase revenue, test new products without risk, and more.
Only a fifth of responding companies are either using or testing POD. That’s likely to change as more consumer-facing companies recognize how POD can meet the demands of today’s market.
Orbis Research projects sales of POD software will grow at a compound annual growth rate of 32.4% from 2021 through 2026.
The on-demand production is already helping businesses grow.
For example, Kornit, a manufacturer of printing equipment, reported a 67% revenue growth in 2021, while the leading POD fulfillment provider Printful said its sales grew by nearly 80% in 2020, and the value of merchandise it produced during the 2021 holiday season hit a record $1B.
Global fashion brand Ralph Lauren embraced the concept of on-demand.
In May 2021, it announced to produce a polo shirt only after it was ordered, allowing shoppers to customize shirts with their monogram and the features they want.
The on-demand approach eliminates overproduction, so it appeals to the growing number of consumers concerned about the environment.
A 2021 survey of more than 1K US consumers found that 68% were willing to pay more for sustainable products, up from 58% when the same question was asked just 2 years earlier, according to the Wharton School’s Baker Retailing Center and First Insight.
POD fulfillment is ideally suited for retailers and brands selling online. Because it’s easy to offer products to customers worldwide, there’s no need for inventory space, and the orders are fulfilled and shipped from the fulfillment center nearest to the customer.
React to trends fast
While minimizing inventory risk
Make more money
Given the 50.5% increase in US online sales in just the last 2 years, it’s no surprise that 98% of surveyed retailers and brands said that increasing ecommerce revenue is their main priority.
Offer new designs in minutes
Since most retailers order large quantities of products months in advance from factories that are often thousands of miles away, it’s nearly impossible to quickly react to trends, minimize inventory risk and investment, offer product customization, etc.
Test new products and ideas risk-free
Surveyed retailers and brands said that the pandemic highlighted the risk of long supply chains and not being able to respond quickly to changes in consumer tastes.
Since new products don’t always work out, the desire to test new products comes into conflict with the goal of minimizing inventory risk. And 68% of companies surveyed say they’re trying to keep a tight rein on inventory.
Strategies for expanding product assortment
Dropshipping is one way how companies can balance the need to minimize losses from unsold inventory while expanding the product catalog.
By using dropshipping, the retailer doesn’t have to stock inventory and only buys an item after it’s ordered.
55% of the surveyed companies said they rely on dropshipping, including 31% who view it as an important part of their inventory strategy.
Dropshipping can be an effective way for a retailer to expand its assortment. But it requires the retailer to have good visibility into the supplier’s inventory. What’s more, dropshipping doesn’t solve the problem of quickly responding to new trends and doesn’t address the need for many consumers to have products customized to their tastes.
Some surveyed retailers are responding to that wish for customization, with 35% offering personalized products today and another 17% exploring that idea.
Of those who offer customized products, two-thirds handle the customization internally, while the rest outsource the work.
Relatively few retailers are taking advantage of POD fulfillment, in which products are produced only after a customer makes a purchase. Only 24% of the retailers surveyed had ever tried POD, although another 8% plan to investigate the technology in the coming year.
The flexibility to test new ideas
Markus Uehleke and Alexander Sel, co-owners of The Philosopher’s Shirt, appreciate the flexibility POD gives them to respond to political issues with new t-shirt and hoodie designs. As for the products that don’t catch on—they can be removed from the store.
“That’s the kind of unlimited flexibility a retailer has when they don’t have to worry about moving unsold inventory,” Uehleke says.
Markus Uehleke and Alexander SelCo-owners of The Philosopher’s Shirt
Carlos Ugalde, the owner of Latin-themed apparel retailer House of Chingasos, is grateful that the POD option allowed him to get started without any significant investment. He only pays a fee when a customer makes a purchase. “I like the idea of only getting charged when something sells. That’s quite different than having to spend money upfront to get a large order of apparel produced by a conventional factory,” he says.
Carlos UgaldeOwner of House of Chingasos
Turning all production and fulfillment work over to Printful is a big deal for Dean Malka, founder of Swish Embassy. “I don’t have to worry about the labor, machinery, downtime, misprints, consumables, all the things that go into doing that,” Malka says. “Having done that myself, I know how much that can eat up your time and money.” In addition, he says, a company like Printful can invest in the kind of top-quality equipment “that would not be economical at my scale.”
Dean MalkaFounder of Swish Embassy
Entertainment, politics, and sports offer opportunities for POD fulfillment
There are other scenarios that can lead to products being red hot or ice-cold, and POD fulfillment enables retailers to quickly respond without taking the risk of producing products in advance.
“Unexpected developments in entertainment, as well as the impossible-to-predict outcomes of sporting events and elections, are all examples of opportunities for retailers that produce products on-demand,” says Reinis Grikis, global strategic account executive, Printful.
With POD, retailers can sell the product immediately and get it to customers within days, wherever in the world they’re located.
“If Disney or Netflix releases a new series and it unexpectedly blows up, like Squid Games, suddenly everyone wants merchandise related to that series. But no one has the merchandise, and it takes at least 2 to 4 weeks to get goods produced and into warehouses. By then, you’ve lost most of the buzz and maybe hundreds of millions of dollars in sales,” he says.
How POD can help your business
No wasted inventory and lost money
POD allows you to produce only the amount of items your customers purchase.
Easy to test new ideas
A retailer or manufacturer can try out new concepts using POD, then place large orders for styles that catch on.
Speed to market
POD allows you to offer new products that capture the latest memes on social media, sports championships winners, suddenly popular TV shows, etc.
Sell to global consumers
POD suppliers like Printful, with production facilities around the world, can quickly fulfill and ship online orders to customers everywhere, minimizing delivery time and fees.
No need to mark down unsold inventory
When you only produce what customers already have ordered, there’s no stock to sell at a discounted price.
Ability to personalize products
Retailers can offer customers product personalization. That’s significant, as 84% of retailers surveyed in late 2021 and early 2022 called personalization important to their business, and 43% said it would be an area of increased investment in 2022.
Appeal to environmentally conscious consumers
Brands can demonstrate their commitment to social values like sustainability—which 82% of retailers in the survey said was an important goal for 2022—by letting shoppers know that they only produce merchandise when it’s ordered and thus make no inventory that ends up in landfills.
An extensive color palette
Digital POD technology allows designers to create graphics using a variety of colors.