Many beginners to dropshipping often wonder if they should dropship existing products sold by suppliers on AliExpress and other platforms, or whether to go the ‘print on demand’ (POD) route.
Since there are pros and cons with both business models, it’s crucial for the beginner to assess each business model on its own merits and decide for himself/herself which is suitable for them.
Dropshipping and POD are two sides of the same coin. And there are many marketers making good money with both models. So rest assured that both approaches are profitable. Now let’s see which one is right for you.
Are You Looking To Build A Brand?
The biggest differentiator between dropshipping and POD is that with dropshipping, you’ll be shipping pre-made products created by manufacturers.
For example, if dropshipping a sleeping bag, the manufacturer will decide the color, size, shape, etc. You’ll have no/very limited input and control in the process/designs.
While you could design a logo and ask the manufacturer to add your logo to the product, that’s about as far as you can go with the branding.
With print on demand, however, you’ll be able to create your own designs and/or outsource the process to professionals. Then it’s just a matter of getting your designs printed on POD products such as caps, mugs, backpacks, shirts and so on.
For branding, POD would be the way to go. You’ll build customer loyalty, and your repeat customers will look forward to what new products you have to offer.
Are You Concerned About Variety?
One downside to POD is that there are only a handful of items you can print your designs on. With dropshipping, you are spoiled for choice because there are thousands of products to choose from. Everything ranging from survival gear to baby care products are there for you to ship.
If you’re looking for variety, dropshipping is a better option.
Is Shipping Expediency A Concern?
This is a tricky issue. Generally, print on demand products need to be manufactured first before shipping out. If someone ordered a t-shirt from your POD store, the manufacturer would first need to print your design on the t-shirt before sending it out.
With dropshipping, the products will be held in inventory by the suppliers. So the moment the order comes in, the product can be shipped out. If China suppliers are used, the e-packet option will mean faster shipping times.
However, if you’re using dropshippers based in the U.S. for your POD products, your shipping time might be even faster than the dropshipped products from China.
So it all depends on the product, supplier, location, etc. You’ll have to assess the situation for yourself.
But you do need to factor these things into your decision before setting up your ecommerce store. Do note that both business models are NOT mutually exclusive. You can sell dropshipped products and POD products in the same store. Learning to do both will give you more flexibility and your store will have a wider variety of products. That’s probably the best way to go about it.
What About Product Costs and Profit Margins?
Generally, dropshipping products have higher profit margins and lower costs, because they’re manufactured in bulk. Furthermore, most dropshipping products are sourced from China, where the costs are lower. Of course, you’ll have less quality control this way, so be sure to routinely order an item from your own store and verify its quality for yourself.
So if you’re looking for higher profit margins, dropshipping might be a suitable option. However, there’s one downside, that’s competition.
How Competitive Are You?
The biggest downside to dropshipping is that you’ll be facing competition from other marketers. Since your product is not unique (unlike POD), you’ll be dropshipping products that other marketers are selling too.
This will not only mean overexposure to some products, but advertising costs could rise also, while profits decline as you’re forced to price aggressively.
