Supply chain management matters
Print on demand vs. dropshipping
Supply chain management (SCM) is the operational model which helps a retail business organize how its products are moved around and get to the customer. Usually, this is about an item being shipped from a warehouse to a production point and then to another warehouse or shipping point and then delivered to the buyer’s address.
Dropshipping allows small businesses to save their inventory costs and operate without a warehouse. when using this SCM model, a company sells products which it does not own but which its partners have in stock. When a buyer prepays an item, it is immediately purchased from a third party and is delivered by it directly to the customer. There is less organization, management and risk on the seller’s side.
Plain print-on-demand (POD) business means that the seller either owns ‘empty’ product items or knows how to quickly get them, and has a variety of prints to offer as well as a production facility (i.e. printing equipment) to fulfill the print. The latter can be either owned or outsourced.
Whenever POD uses dropshipping while also outsourcing the printing service, one can say that a hybrid model is used.
Print on demand and dropshipping differences are considerable. Whenever an organizing inventory-based business, print on demand companies purchase arts and items to print on from local suppliers. It means investing into inventory and covering storage costs on a monthly basis. When demand increases (e.g. during the holiday season), a bulk purchase is needed. Inventory forecasting may be time consuming and costly. When the forecast is incorrect, delivery delays are possible or costs will be frozen in extra stock. In addition, inventory levels are associated with higher risks and less environmental friendliness.
To remove the above the above-mentioned cons, dropshipping can be used. Both products with ready prints and other souvenirs, gifts and stuff can be resold from third-party providers via dropshipping platforms. This allows both customers to benefit from a high range of items offered and businesses to avoid excessive overpricing and reduce production waste as well as makes the process more environment-friendly due to absence of excess inventory. In addition, the optimal logistics is achieved because suppliers deliver the products directly to the customers.
The dropshipping model of business works best when there are many suppliers at hand. Ideally, the same product can be found in different places which reduces the risk of inability to deliver it after the customer’s payment is received. Large platforms, like AliExpress, Shopify, and WooCommerce, help to deal with this issue as well as make the business very comfortable for its owner. From the founder’s perspective, dropshipping makes location flexible so that he can run business from anywhere with a stable Internet connection. In fact, only e-marketing knowledge is needed to promote the store and nothing else.
Yet, it would be too simple to say that dropshipping is the most comfortable and easiest way of doing business because this is not true. Customers know that they can order on AliExpress directly and the biggest wholesalers fail to generate personalized supply. So, print on demand’s unique feature is to offer authentic print designs and create demand which does not exist on the mentioned platforms. A branded shop can update design templates on a monthly basis which, in market terms, means creating new items endlessly without the need to find a new supplier for them. Either having their own printing equipment or outsourcing the production process, manufacturing products which are branded and recognizable means attracting more customers, too. A person will see a friend’s cup with a cool phrase and want it, too. Of course, this will be a targeted demand because the cup’s brand will lead the person to the shop’s branded website as no one else can offer the same item. One day, some designs can even become internationally famous and recognizable boosting the brand even higher. A branded seller always wins the greatest market share.
Whenever a print-of-demand also involves the client into the design creation process and empowers to create himself, the resulting products become even more unique. It is a good idea to make people buy by triggering an emotion, Medium writes. Such an emotion can be called for by suggesting to design your own t-shirt or cup or personalize one for your birthday-celebrating friend.
Ultimately, not everyone wants to invest into their own printing facilities and manage production schedules for the incoming blank items, so the hybrid model of print on demand dropshipping is another good option to choose. Best print on demand services and software solutions allow both finding suppliers for the inventory and outsource the printing process, too. In this case, advantages of both plain business and dropshipping are combined, allowing to work with overseas producers and delivering worldwide. It is also about producing all possibly customizable items to sell and store, making their delivery faster and easily trackable. The direct delivery allows reduced waiting time for the end customer who will never know where the items are actually travelling from.
Both business models as well as a hybrid approach have their pros. Dropshipping businesses require almost zero investment, while the print on demand is about higher customization and brand identity. Both rely on advertising and promotion to compete with their rivals and increase customer awareness. Both offer scalability opportunities and allow adding more items without much additional efforts. Both usually require collaboration with third-party partners to cover international markets, decrease risks, and cover force-majeure situations.
To conclude, print on demand vs. dropshipping is an endless debate about business success in the souvenir market. Customers will not realize which shopping model is used as they obtain the same results after all. Their need is about high quality, wide range of designs and products available, and a suitable speed of delivery. However, business founders will notice the difference as these are two different supply-chain-management (SCM) models. They impact order processing, management and communication, and require different risk mitigations. Ultimately, the choice impacts profitability of the business as the margin may be different. There is also a different print on demand return policy to apply depending on who is responsible for the print.
All in all, now it is clear why print on demand and dropshipping are sometimes equaled or fully confused - the end customer does not feel the difference at all. Suppliers ship their products directly to the customer or collaborate with third parties to do that from different platforms. The final result is the same - the client gets his purchase with a desired print.
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