Print-on-Demand vs. Inventory: Your Ultimate Guide for 2025

Choosing between print-on-demand (POD) and managing your own inventory is one of the most important decisions for an online store. Each model has its advantages and trade-offs, impacting costs, control, scalability, and more.

If you’re unsure which suits your business goals best, this guide will walk you through a detailed comparison of POD and traditional inventory management. 

Print-on-demand vs. inventory: the ultimate comparison

The fundamental difference when comparing print-on-demand vs. inventory lies in production and stock management practices. Let’s break down how these two approaches differ across the key aspects of running an online business.

1. Process

In the print-on-demand model, a business partners with a fulfillment provider who handles printing, packing, and shipping as orders come in. Since products are only produced when a purchase is made, there’s no need to store inventory. This system removes the burden of managing logistics and doesn’t require a large investment. 

However, because the production process starts only after a sale, delivery times can be slightly longer than with pre-stocked items. 

On the other hand, businesses using an inventory model must purchase and store their products ahead of time. This means warehouse upkeep, managing stock levels, and fulfilling orders directly or through a third-party logistics provider. 

While this model allows for immediate shipping and hands-on quality control, you need to carefully manage inventory to avoid overstocking or running out of popular items.

2. Upfront costs

Print-on-demand offers a more accessible entry point for sellers since it eliminates the need for bulk purchasing. With no upfront investment in stock, businesses can start selling without financial risk. It’s especially beneficial for small businesses or startups that want to test new products or markets without tying up capital. However, because each item is produced individually, per-unit costs are often higher. 

In contrast, traditional inventory models demand a substantial initial investment. Businesses must purchase inventory upfront, which can be costly, especially when demand is unpredictable. Bulk purchasing can reduce the cost per item, but it comes with the risk of unsold stock sitting in storage. 

Having stock also requires warehouse space and inventory management systems, adding to the operational expenses. If a product doesn’t sell as expected, businesses may face financial losses due to unsold products.

3. Profit margin

Profit margins play a crucial role in deciding between these two business models. 

Print-on-demand typically has higher per-unit costs since products are made to order. However, without the need for upfront inventory investment, businesses avoid the risk of unsold stock, making it a lower financial risk. While this can lead to smaller profit margins compared to buying in bulk, POD businesses save on warehousing, inventory management, and potential losses from excess stock—helping to offset lower margins. 

Additionally, POD businesses selling premium items, like embroidered custom apparel, can command higher profit margins. Embroidered products can often be sold for higher retail prices thanks to their perceived quality and durability. For example, an embroidered hoodie might cost $30 to produce via POD. If sold at $60, the gross margin per sale would be 50%, before factoring in additional business costs like marketing and platform fees.

Valuable read: Print-on-Demand Niches to Watch in 2025

Traditional inventory models, on the other hand, offer higher potential profit margins per item because buying in bulk lowers costs. When businesses purchase large quantities, the per-unit price drops, allowing them to sell competitively while maintaining a strong margin. 

However, this comes with added financial risk, as unsold inventory can lead to losses. Businesses must carefully balance demand forecasting and production planning to ensure they maximize profits while avoiding overstock.

4. Production control

Managing your own inventory allows you to see, touch, and inspect your products before they reach your customers. This hands-on approach enables you to maintain high quality standards, ensuring that each product meets your specifications. Plus, customers receive a level of assurance and consistency that serves to enhance brand loyalty.

In a print-on-demand model, you give up some control over the manufacturing process. As you don’t physically see or inspect the products before they’re shipped, you’ll need to rely on your fulfillment partner’s quality standards.

Ensuring consistent, high-quality results in print-on-demand means choosing reliable suppliers and clearly defining your quality expectations.

When working with Printful, you get an in-house team of experts who will ensure your product meets the highest standards. Printful provides premium quality products to customers worldwide and service consistency regardless of products, designs, or fulfillment location.

5. Time spent

In essence, print-on-demand saves business owners time by outsourcing production and fulfillment. Since printing, packaging, and shipping are handled by the fulfillment partner, business owners can focus on other critical aspects like marketing, customer engagement, and product design. This is ideal for entrepreneurs who prefer a hands-off approach to logistics and want to spend more time growing their brand. 

Managing inventory, on the other hand, is more time-intensive. Business owners must oversee purchasing, warehousing, and order fulfillment, which needs ongoing attention. Keeping track of stock levels, coordinating with suppliers, and handling returns are daily tasks that can take up time and money.

While having in-house inventory provides greater control over operations, it also demands a high level of involvement in logistical processes. It’s therefore less suitable for sellers who’re looking for a simple, streamlined business model.

6. Scalability

Scalability is an essential consideration for long-term business growth. 

Businesses with a print-on-demand model are very easy to scale since there are no inventory limitations. Sellers can expand their product catalog at any time without worrying about storage or excess stock. This makes it easy to test new designs and adjust to market trends quickly. 

Because fulfillment is handled by a third-party provider, businesses can quickly respond to increased market demand without any additional infrastructure. However, since each item is customized on demand, production and shipping speed can be slower compared to pre-stocked inventory. 

Scaling an inventory-based business requires more planning and resources. Businesses must purchase additional stock, expand warehouse space, and optimize logistics and staff to handle higher order volumes. 

While this approach allows for faster fulfillment and better profit margins at scale, it also increases financial risk and makes operations more complex. The downside is that expanding too quickly without accurate demand forecasting can lead to overstocked products and wasted capital.

7. Risks

The risk factor is pivotal in deciding between print-on-demand and inventory business models.

Unsold inventory is one of the primary concerns for traditional inventory businesses. When you buy items in bulk, there’s always a risk of being unable to sell them, leading to dead stock and financial losses. It’s a key consideration, particularly for businesses with limited capital or those operating in dynamic markets with high overhead costs.

In contrast, using print-on-demand services like Printful eliminates the risk of unsold inventory. That’s because you only produce items when there’s a confirmed order. This approach is advantageous if you’re concerned about financial risks and want to minimize losses. However, it does come with the risk of potential production delays if the print-on-demand supplier experiences high demand.

8. Product variety and flexibility

Offering a diverse product range and remaining flexible is key to adapting to customer preferences.

Print-on-demand allows businesses to offer a wide variety of products without needing to pre-purchase stock. Sellers can capitalize on trends quickly by introducing limited-time designs featuring viral catchphrases or seasonal colors. 

For example, during the holiday season, a POD store can launch a Christmas-themed sweatshirt collection with trending designs and phrases, adjusting inventory in real-time based on demand. This allows businesses to maximize profits while minimizing financial risks, making POD a great option for trend-driven business owners.

Valuable read: Best-selling Print-on-Demand Products

POD also makes it easier to offer product personalization, which has seen growing consumer demand. According to a recent survey, 81% of shoppers prefer companies that offer a personalized experience. This makes POD an ideal model for businesses offering unique products, including custom mugs, phone cases, or apparel with individual designs.

Source: Printful

On the flip side, businesses with a traditional inventory model must carefully plan product offerings. Since each variation requires physical stock, expanding a product line involves additional investment and storage considerations. 

With in-house production, you have full quality control, but it limits the ability to test new product ideas quickly. For example, a sportswear company might hesitate to introduce a new yoga leggings design if it means ordering thousands of units upfront without knowing whether it will sell.

Product variety is essential for staying competitive, especially when it comes to running an online store. Understanding the advantages and trade-offs of print-on-demand vs inventory can help you choose the best approach for your business needs.

9. Environmental impact

The fashion industry alone is responsible for approximately 92 million tons of textile waste annually, much of it due to overproduction. Print-on-demand helps mitigate this by ensuring that every item produced has a buyer. This way, you’re eliminating the issue of excess inventory. This model also reduces the need for large storage facilities, lowering energy consumption.

Additionally, many POD providers, including Printful, are incorporating more eco-friendly printing methods and product options in their product catalogs.

Alternatively, in-house production often results in surplus stock that may go unsold, leading to waste. Plus, warehousing and bulk production contribute to higher carbon footprints and resource usage. 

Businesses aiming for a more eco-friendly approach may find print-on-demand more in line with their values. 

Which business model should you pick for your online store?

Now that we’ve explored these business models from A–Z, which one should you pick?

Here’s a quick breakdown to help you decide.

Choose print-on-demand if you:

• Seek a low-risk business model

• Want more time for creative and strategic aspects

• Are testing new markets or product concepts

• Prioritize sustainability and reduced waste

Choose in-house inventory model if you:

• Are confident in the demand for your products

• Have the capital for upfront costs

• Prioritize quality control and a hands-on customer experience

In the end, the decision between print-on-demand vs. inventory hinges on your unique business needs, financial capacity, and objectives.

Print-on-demand is your best bet if you’re just starting out or want a flexible, low-risk approach. However, if you’re willing to invest upfront, have more control over the production process, and are eyeing potential market expansions, the inventory model could be your path to success.

When using Printful, you’re met with flexibility, consistent quality standards, and global reach, making it an excellent choice for custom printing businesses of all sizes. 

And that’s a wrap—time to create your products and sell online!

Read next: Print-On-Demand vs. Dropshipping: Which Is Better?