Over the past few years, two ecommerce business models have become quite popular. Those two are print on demand and dropshipping and for good reason as well. The success stories that have come from these business models are undeniable.
From Grand View Research’s reports, the global dropshipping market was valued at $225.99 billion in 2022 with a compound annual growth rate (CAGR) of 23.4% until 2030. As for print on demand, Strait Research reports show that the market was valued at $6.3 billion and expected to grow up to 25.3% CAGR by 2031.
These statistics are undeniable but most people wonder which one is the right business model for them. Both are quite similar with one or two key differences, so I want to explore which one is better in this article. So let’s see who is the true winners: print on demand vs. dropshipping in a head-to-head comparison.
Print On Demand and Dropshipping Defined
Since print on demand and dropshipping are the same in how they execute, they are quite different in how they operate. So before we head on to the comparisons, let’s first define what exactly print on demand and dropshipping are:
Dropshipping
Dropshipping is a business model where the order and fulfillment of a product are handled completely by a third party. This third party is usually a manufacturer of the product or a wholesaler who resells such products.
The store is where all the products are showcased. Dropshipping also does not require a traditional brick-and-mortar store to operate. It can be run on an ecommerce platform like Shopify where the store is used to hold the catalog of the products that customers order from.
Once the store gets orders for a certain product, the dropshipping store sends that order to their partnered supplier or manufacturer of the product. They handle the orders and ship the products to the customers themselves. This way, the store acts as the medium between the customers and products without needing to hold inventory on hand.
Print On Demand (POD)
Print on Demand (POD) is another innovative retail model that has gained popularity in the e-commerce space. Traditional retail methods or business models have the products pre-manufactured and stocked ahead of time. But unlike that, POD allows businesses to create custom-designed products only after a customer places an order. This eliminates the need for holding inventory and the associated upfront costs.
The process begins by setting up an online store, typically using platforms like Shopify. The online store showcases designs on various products such as T-shirts, mugs, phone cases, and even stickers. The key feature of POD is the ability to offer a wide range of customizable products.
Once a customer places an order, the design is printed or embroidered on the selected product and shipped directly to the customer. This print on demand production model allows for greater flexibility and personalization, as customers can choose from different designs, colors, and sizes.
The designs can be printed by an in-house team or a third-party vendor or supplier. The printing only starts after a customer places an order in your store.
Print On Demand Vs. Dropshipping: 9 Head-To-Head Comparison
Now that we’ve seen the differences between print on demand and dropshipping, it is time to do a head-to-head comparison. Through these comparisons, I’ll determine a winner to see which one is better in that specific criteria. So let’s see who is the true winners: print on demand vs dropshipping.
Comparison #1 Initial Investment And Required Experience
For dropshipping, the initial investment and required experience needed for business is very minimal. Most of the initial cost required is needed for setting up the shop. The rest of the cost is handled by the supplier who handles the production and shipping of the products to the customers.
For print on demand, it is much the same. The initial investment is mostly for setting up the store and the catalog. A bit more experience is needed when it comes to product selection but otherwise, the experience needed is quite similar to dropshipping.
Winner: Tied
Comparison #2 Product Range And Uniqueness
For product range, dropshipping has more range than print on demand. This is because the dropshipping model allows your business to switch products to a new one very easily. Print on demand has a wide variety of products that you can customize but dropshipping has way more range.
But when it comes to uniqueness, print on demand is far more unique. Each product is unique to the customer who wants a customized design. The dropshipping model is not unique as other dropshipping stores will sell similar products to your business. When you combine the product range and uniqueness, print on demand has a slight edge ahead of dropshipping.
Winner: Print on demand
Comparison #3 Production And Quality Control
The dropshipping model allows for production to be handled completely by the suppliers. This means production is not handled by your business. However, that means you also have no control over the quality of the product.
Print on demand is a bit more versatile on production. Your business can either handle the production or let it be handled by a supplier. If it is handled by your business, then you can ensure that the quality is maintained for your customers. That makes it a bit more expensive on the production side but ensures quality is maintained. Better quality products mean customers are more likely to shop at your store again.
Winner: Print on demand
Comparison #4 Shipping And Order Fulfillment
Dropshipping allows for swift order fulfillment since the products are directly shipped to customers by your suppliers. You can even reach international customers with a supplier that caters to different markets.
Print on demand takes a bit more time on shipping and order fulfillment. That is because the printing and designing of the product take a bit longer to do. The order fulfillment is a bit slower as a result. Even if you allow a third-party supplier to handle production and shipping, print on demand will be slower as it will take time for the products to be printed. So overall, dropshipping has the added benefit of faster shipping and order fulfillment.
Winner: Dropshipping
Comparison #5 Branding And Competition
About 30% of ecommerce stores use the dropshipping model according to Yaguara. That means competition is very high in dropshipping. With competition being so high, it becomes difficult to stand out from the rest. This makes branding for dropshipping stores more crucial but increases the difficulty of being a unique brand in dropshipping.
The role of personalization and storytelling in brand building is very important in print on demand business. Branding and marketing your product is much easier as you can stand out from the crowd and create a unique marketing strategy specifically for your store. Print on demand has fewer competitors which makes branding much easier. This allows a print on demand business to a niche market more effectively. Branding for the niche market is much easier and allows you to stand out from the competition, which is much more difficult in the dropshipping model.
Winner: Print on demand
Comparison #6 Costs And Profit Margins
Costs and profit margins favor dropshipping model over print on demand. Since the production and shipping costs are all handled by suppliers, there is more room for profit especially when stores get bulk orders from customers.
For print on demand, product costs are much higher which reduces the profit margins. This is because custom designs on products raise the cost of production. Add to that if businesses also handle shipping, profit margins are much lower. However, if you let a third party handle production and shipping, the profit margins can be improved but only slightly.
Winner: Dropshipping
Comparison #7 Customer Engagement And Satisfaction
In dropshipping, customer engagement and satisfaction are often neglected. The neglect comes from the model itself as customer satisfaction is when the customer gets the product on hand. There is little to be done in customer engagement as the dropshipping business acts like a middleman. As long as customers get the product, there is not much to do in terms of customer satisfaction.
In print on demand, the satisfaction comes from making sure you get the customer’s design on print. A good quality product will ensure that customers are happy. There is more customer engagement involved as you have to talk to the customer to finalize the design. There is more scope for customer service as a result and makes it much easier for customers to engage with your store. Thus customer service is much more important as customers are a part of the whole process.
So overall, it depends on making sure the customer gets the product that they are looking for. As long as they get the product they want, customer satisfaction can be ensured. That makes it harder to fulfill for print on demand businesses than in dropshipping. Print on demand requires more effort in customer engagement and ensuring that they are satisfied with your services all the way through. The dropshipping model is much easier as long as the customer is happy with the product they get.
Winner: Dropshipping
Comparison #8 Risks And Challenges
There are many difficulties in product customization businesses like print on demand and for a dropshipping business model. that both dropshipping and print on demand have to face. The main difference is where the supposed risk is higher. Both models allow suppliers to handle production and shipping to help reduce costs to the business. However, if suppliers fail to deliver on time or produce low-quality products, the risk is much higher for dropshipping. The whole business model relies heavily on suppliers. So when there is a supply chain issue, it directly impacts dropshipping businesses.
For print on demand, there is a scope to reduce those risks by moving production in-house. The costs might be higher but the quality of the products can be maintained to ensure customer satisfaction. Combining this with other challenges such as high competition and limited branding score in dropshipping, print on demand is a much safer alternative.
Winner: Print on demand
Comparison #9 Future In Ecommerce
As I mentioned in the beginning, the market size for both models means a bright future in the ecommerce space. Both businesses are easy to scale as you can offer a wide range of products for customers and you can cut costs with the right suppliers.
However, the main difference lies in the amount of saturation in the market. There is a lot of competition in dropshipping and that will only be more of a problem in the future. More and more businesses will likely choose dropshipping because it is much cheaper than other models.
But that means differentiating from the competition is much harder to do. According to Cloudways, dropshipping businesses have a 90% failure rate. A main contributor to that is the high competition. In print on demand businesses, a business can target niche markets. This allows print on demand businesses to be unique and have a better future in ecommerce.
Winner: Print on demand
So the overall winner out of the two is print on demand. It is much more flexible with branding and has a lower competition that allows the focus to be shifted to marketing your products. Even if it is the winner in a head-to-head comparison, both business models have their advantages and disadvantages. Ultimately, it depends on what type of business you want to run that will determine which model is better for your business.
Upgrade Your POD Business With A Product Personalizer On Shopify
If you are looking to get into the print on demand business on Shopify, adding a product personalizer app for your online store is one way to make your business stand out from the rest. Here is an example of a POD business using a product personalizer on Shopify:
On the left side, you can see all the customization options available. It allows customers to upload their files like a logo and choose the color of the products to their liking. There is also the ‘browse design ideas’ where customers can see predefined templates which they can take inspiration from.
On the right side, you can see everything related to the order of the product itself. There is dynamic pricing which allows customers to see price changes in real-time. Since personalized products tend to cost more, this type of transparency shows customers that the designs have no hidden costs. The quantity box allows customers to choose what size they want the product and how many they want to order. And finally, the note to the designer section helps add customer engagement. The customers can give notes on the design to the designer so that the final design can be more to their liking.
A product personalizer app like this allows customers to design the final product to match their liking. Customers can design the product the way they see fit. There is no need to go back and forth on a call with a designer to design the product based on vague descriptions from the customers. This makes it so that there is a greater chance for the customers to be satisfied with the end product. Once the customer is happy, they are more likely to return to your print on demand store or recommend your store to others.
Bottom Line
So who is the true winner: print on demand vs. dropshipping? Both have the characteristics of great business models for startups and cater to different markets. However in the head-to-head comparison, print on demand is the winner because of how easy it is to be unique in the face of competition. Ultimately, it is for you to decide which business model will suit your business the best.
