When starting an eCommerce business, choosing the right fulfillment model is crucial for profitability and long-term success. Two of the most popular business models are dropshipping and print-on-demand (POD). Both allow entrepreneurs to sell products without holding inventory, but they have key differences that impact costs, profit margins, and scalability.
So, which one is more profitable? Here we look at the differences between dropshipping and print-on-demand, compare their advantages and disadvantages, and help you decide which model is best for your business.
Contents
Understanding Dropshipping and Print-on-Demand
Before comparing profitability, let’s define how each model works.
What is Dropshipping?
Dropshipping is an eCommerce fulfillment method where you sell products without holding inventory. When a customer places an order, you purchase the item from a supplier, who then ships it directly to the customer.
How Dropshipping Works:
- You create an online store and list products from a supplier.
- Customers place orders on your website.
- The supplier fulfills and ships the order directly to the customer.
- You keep the profit after covering the supplier’s cost.
Popular Dropshipping Suppliers: AliExpress, Spocket, CJ Dropshipping, Zendrop.
What is Print-on-Demand (POD)?
Print-on-Demand is a business model where custom designs are printed on products only after an order is placed. This eliminates the need for pre-made inventory.
How Print-on-Demand Works:
- You create and upload custom designs.
- A customer purchases a product featuring your design.
- The POD supplier prints the design on the product and ships it.
- You earn a profit after production and shipping costs.
Popular Print-on-Demand Suppliers: Printful, Printify, TeeSpring, Redbubble.
Dropshipping vs. Print-on-Demand: Profitability Comparison
Now that we understand how each model works, let’s compare them based on key factors that impact profitability.
Profit Margins
| Factor | Dropshipping | Print-on-Demand |
|---|---|---|
| Product Costs | Lower (wholesale pricing, bulk discounts) | Higher (custom printing increases costs) |
| Profit Margins | 20%-50% | 10%-30% |
| Pricing Control | Can price competitively due to lower costs | Limited pricing flexibility due to high base costs |
Verdict: Dropshipping generally offers higher profit margins because wholesale pricing is lower than custom-printed items.
Product Customization and Branding
Branding is crucial for long-term profitability. Let’s compare how each model handles customization.
- Dropshipping: You sell pre-made products from suppliers, limiting customization unless you use private labeling.
- Print-on-Demand: You have full creative control over product designs, allowing for unique, branded merchandise.
Verdict: Print-on-demand wins for branding and customization, making it ideal for building a unique brand identity.
Shipping Times & Fulfillment
Faster shipping improves customer satisfaction, reducing refunds and increasing repeat business.
- Dropshipping: Shipping can take 10-30 days if suppliers are in China (unless using local warehouses).
- Print-on-Demand: Production adds extra time, but many POD services have U.S. and EU fulfillment centers for faster delivery.
Verdict: Print-on-demand offers more reliable shipping times, especially when using domestic fulfillment centers.
Scalability & Marketing Costs
Marketing costs directly impact profitability. Let’s compare scalability and advertising expenses.
- Dropshipping: Since products are widely available, competition is high, leading to expensive ad costs.
- Print-on-Demand: Unique designs reduce competition, making it easier to stand out with organic marketing.
Verdict: POD has an advantage for long-term brand building, while dropshipping requires aggressive paid advertising to stay competitive.
Which Model is Best for You?
The best choice depends on your business goals and skills.
- Choose Dropshipping if: You want higher profit margins, access to a wide variety of products, and are comfortable running paid ads.
- Choose Print-on-Demand if: You have design skills, want to build a brand, and prefer lower competition.
Can You Combine Dropshipping and Print-on-Demand?
Yes! Many successful eCommerce businesses use a hybrid approach:
- Sell trending products via dropshipping.
- Offer exclusive branded merchandise through print-on-demand.
- Test product ideas with POD before committing to private labeling.
Both dropshipping and print-on-demand can be profitable if executed correctly. Dropshipping offers higher margins but faces stiff competition, while POD provides better branding opportunities with lower direct competition.
The best approach? Choose the model that aligns with your skills and long-term vision. Whether you want to build a fast-scaling store with trending products or create a long-lasting brand with unique merchandise, both options have the potential for success.
