Print on Demand Business or Aliexpress Dropshipping Model?
In the e-commerce world, there are many industries and niches, which allow sellers and suppliers to sell products worldwide, provided there’s a fast and stable Internet. Starting a business from scratch doesn’t require significant investments, as it was in the 2000s: its viability has become higher, and development is faster. Due to the increased technical literacy, many entrepreneurs know how to sell, develop marketing strategies, and optimize a website.
However, due to ever-changing demand trends, the retail market evolution, and the huge variety of niches, entrepreneurs are often faced with a business model choice. Read further in this article on how to choose between print on demand and dropshipping.
Table of contents
How does POD work?
Recently, it has become popular among entrepreneurs to take on an almost ready-made business that doesn’t require any investment. Print on demand is just such an option, which consists of sequential steps:
- Registration and payment of the order.
The buyer who paid the order on the website doesn't notice the difference between manufacturer and seller since the last one offers goods at favorable prices and the minimum delivery cost.
- Printing a certain number of products by the manufacturer.
In turn, when the second party takes over the production, the seller pays it a commission on each sale.
- Sending the goods to the client.
After the item is ready, it’s to be sent directly to the client through a delivery service.
Such actions involve several additional operations related to management. While starting a print on demand business, it can be difficult to keep track of everything that happens - e.g., control delivery, manage reports, charge invoices, manually send hundreds of emails with company news digest, and thanks for the purchase, etc. Therefore, experienced print on demand companies often use frameworks that automate all business model operations.
This model of cooperation is beneficial for each sales unit. Sellers who offer a wide range of products don’t need to delve into production processes. They order a certain quantity of products from suppliers who don't risk losing revenue due to unsold goods. Through the possibility of quick execution and delivery (e.g., using one-day Amazon delivery) and low transport companies tariffs, the clients solve their problems and remain satisfied with the service.
What is print on demand business benefits:
- You don't need to print anything in bulk.
Print on demand means that the printer starts working only after the payment receipt. You don't risk losing money since you won't be left with a huge stock of things with ready-made designs.
- You don't have to buy an equipment.
Your partner will take care of new print on demand equipment purchase and its depreciation. In addition, you don’t have to delve into the study of printing technology.
- Freedom to experiment.
You can implement all your wildest ideas and track consumer reactions. Since you’re not investing significant amounts of money in the product, releasing bad designs won’t have dire consequences, like retail outlets in physical locations. In any case, unwanted products can be excluded from the assortment.
- Ease of product personalization.
Authenticity and individuality are those iconic features on the market, thanks to Generation Z and TikTok. Any events that occur locally and globally affect the demand for goods and consumer behavior. E.g., the face masks used only within the hospital a couple of years ago have become a common thing. Imagine how sales skyrocketed when quarantine began. So, you can always track trends, feed on ideas from your audience, and create unique products.
- The ability to implement all kinds of products.
If you can't pick a niche, create a few brands with different target audiences. You’ll track which products are being bought the most for specific audience segments, which tactics generate the most revenue, the user experience, etc.
Note! If you’re determined to occupy more than one niche, you’d equally give both of your attention. To balance and automate processes at different print on demand sites, you can use the PodZa framework.
How does Aliexpress dropshipping work?
Aliexpress dropshipping is a business model similar to POD in that you, as a seller, don’t need a warehouse, while the supplier will keep the assortment of goods. As in print on demand, the supplier from Aliexpress sends orders to consumers. Such a sale implies the presence of an online store or physical points of sale.
Interestingly, when receiving an order, an entrepreneur sends information to a partner and buys a particular product on behalf of the client. In turn, the dropshipping company takes care of the packaging and goods shipping.
Let's analyze the advantages of such a business:
- You don't need to invest a lot of money to launch the process.
Aliexpress, as in print on demand business, doesn’t require a lot of investment. You pay for the product only when there is an order from your customer.
- It's easy to experiment with an assortment.
Like in the print on demand store, you can easily remove unwanted products, introduce new designs and watch their conversions. To improve the user experience, use Google Trends - this way you can track the latest fashion tendencies and the interests of your target audience.
As soon as spinners appeared among dropshippers, there was a widespread tendency to sell them. And this idea burned out - as a result, 19 million copies were sold in the first six months after launching on the market!
- Consumers will see only your brand when they buy products.
Since dropshipping companies operate on a white-label basis, the consumer will never know that you’re the seller but not the manufacturer.
Which option is more profitable?
We considered two options for business models that you can quickly implement in practice. But the main issue that remains unresolved in the Aliexpress vs. print on demand competition is their profitability.
In general, we tend to favor print on demand rather than regular delivery. It's more likely to benefit, in particular for the following reasons:
Dropshipping is highly competitive
Dropshipping implies a minimal investment and low entry barrier, which means a lot of competition, with the most popular markets suffering more than others. It turns out that a huge number of rivals, both beginners and those of long-standing experience, will "gnaw out" each prospect. E.g., on Amazon, you can find an abundance of the same goods from different sellers and at completely different prices. Conversely, the sale of personalized products involves the possibility of purchasing them by different segments of the target audience. So the likelihood of selling them will be higher, and the competitive landscape - more loyal.
Generic products have strict profit margins
Some stores allow dumping, which gives a clear advantage over competitors. Best companies, on the other hand, set their prices, which the market aspires to. In most cases, consumers choose brands they know and trust. And often, even a high price for a product is justified by the fast delivery, things integrity, quality manufacturing, and meeting expectations. Therefore, for each online store, it's essential to increase the authority and visibility on the network, which, as a result, will be reflected in high brand awareness.
The delivery speed of POD products is higher than those that arrived from China
Of course, delivery from China is difficult to accelerate, and it often takes a long time. However, it’s more profitable for POD services to build a local business within one country.
There is no universal approach to scale your business. Perhaps you should mix both models and analyze which one is most effective in your case.
This article is a guide to choosing the best business model. We’ve compared the work principles and discussed the benefits of both dropshipping and print on demand models, and you can probably already give yourself an answer to the question of where to begin.
The profitability of both areas directly depends on localization, delivery prices, and competitiveness - in this case, POD takes the leading position. Of course, you shouldn’t neglect direct sales - by developing a client base, introducing local points of sale, and following trends, you can increase sales turnover and profit. Try to mix both types of business - this way, you can balance and find the best solution.