Earn Money With a Print-On-Demand or Dropshipping eCommerce Business: 5 Facts For Beginners

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Is a Print-on-Demand or Dropshipping eCommerce Business Right For You?

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A print-on-demand or dropshipping eCommerce business have changed everything — you no longer need to have items physically in stock for your customers to buy them. Now you can order them from third-party suppliers as and when your customers want them. You can even get your own custom designs printed on t-shirts, bags, and pretty much anything else — and you only pay for the printed stock once an order is made. (Want to make your own products? Check out these easy DIY projects you can sell online).

A dropshipping eCommerce business is a fantastic business model for anyone looking for a part-time (potential full-time) side hustle. While you don’t have to worry about product manufacturing and logistics, you can focus your efforts on marketing and customer experience instead. Here is what you need to know about dropshipping in order to decide whether it’s the one for you!

What exactly are print-on-demand & dropshipping?

Print-on-demand is what it sounds like: you have an item that’s printed ONLY when you demand it. Easy. It’s a great way to monetize your graphic design skills, but you don’t need to be a designer (or even that creative) to make this one work. You could buy designs from elsewhere or create cute slogan tees instead.

Dropshipping is where you employ a third party company/individual to produce your goods and then ship them directly to your customers – you don’t hold items in stock and you are not responsible for distribution. Dropshippers are often manufacturers or wholesalers of goods and will work with a range of businesses at the same time. A big marketplace like Alibaba.com is a good place to get a feel for the kinds of items you could sell on your dropship store.

Both these models are low-cost ways of getting started to make money from home — perfect for the budding entrepreneur who doesn’t want the burden of financial risk.

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Fact 1: There are no upfront order costs

It makes sense really: if you are ordering your goods on demand then you would expect there to be no upfront order costs. And that’s why a dropshipping eCommerce business is such a great business model for the scrappy bootstrapper.

Your goods under a print-on-demand & dropshipping system operate on an “as and when required” basis, meaning that you are only subject to order costs once an order has been actually made.

Pros

Lower starting costs for starting a business
Lower overheads throughout the duration of your business

Cons

Stock is an asset with a cash value; no stock means fewer assets and a lower overall value for your business
You don’t get to see the order prior to being shipped to your customers (so order plenty of samples in the beginning)
Tighter profit margins as you’re paying out every time someone makes an order.

While there are some downsides to using a print-on-demand and dropshipping system, the low level of financial commitment is a real upside. If you’re savvy you can apply this approach throughout your business, using an open-source CMS to build your online store, royalty free images for your brand, and not pay for any marketing or advertising.

Fact 2: Distributors have different shipping timescales & costs

There’s no hard and fast rule on shipping: one distributor may charge $5 and ship an item in 1 week, another may charge $10 and ship the same item in 2 weeks.

What’s absolutely crucial when you are operating a print-on-demand & dropshipping model, is that you check the different shipping costs and timescales between companies.

You need to be clear with your timescales, consider where your shoppers are based, where your orders are likely to be shipped, and whether you or your customers are going to absorb the cost of shipping. It’s important that you have this stuff figured out before you start selling, as you don’t want to lose out financially.

Pros

You don’t have to ship your goods yourself
Tracking of orders is handled by the dropshipping or print-on-demand company you employ

Cons

Employing a dropshipping or print-on-demand company based in the wrong region can eat your profits
You may have to use longer delivery timescales than your customers desire

Fact 3: These models are on the rise

While dropshipping & print-on-demand are not new models, with Zappos employing dropshipping since 1999; they are on the rise, and The Wall Street Journal has argued that 2017 was the year they went mainstream.

This surge in popularity means that dropshipping now accounts for 33% of the entire eCommerce industry, making it not just a simple way of starting a business, but a successful way of doing so too.

For anyone just getting into dropshipping now, the key is to differentiate and create a brand that has a good story and a bit of longevity built into it. You don’t want to end up as ‘just another generic dropshipping store’. One key way to do that is to invest in a quality brand that fully encapsulates your niche.

Take fitness — a popular niche right now with plenty of tie-in products for dropshippers. You may want to supplement your store with free workout videos on YouTube, run Instagram Stories with fitness fans, guest blog on fitness blogs, or post motivational fitness pictures overlaid with text on Pinterest. Little touches like this can help you massively increase sales.

Pros

Dropshipping eCommerce businesses & print-on-demand models are growing in popularity
The low overhead and costs mean that your business can grow rapidly

Cons

Increased popularity means greater competition. This makes selecting the right niche market even more important
There is a risk of duplication (any number of companies could be using the same third-party dropshipping & print-on-demand company as you). This means that there is a real emphasis on demonstrating the uniqueness of your products

Fact 4: Brings greater flexibility and agility to your business

One day you might be selling t-shirts emblazoned with healthy living slogans, the next you might decide to sell sweatshirts with cartoon animals on. The point is that with dropshipping & print-on-demand you are not tied to a specific product.

This means that you can make your business more flexible and agile than you could if you produced and sold your own goods, where shifting with the times might cost you countless dollars in obsolete stock.

It’s a safe route to entrepreneurship, and it doesn’t require expensive and complex financing or paperwork. You can easily run a dropshipping business on the side and keep up with the demands of a full-time job, as so much of the process is automated.

Pros

You can change the products you sell without having to worry about losing money on outstanding stock
You can be fluid and move with the market if you see something is trending (seasonal products and merchandise are a great example of this)

Cons

There are limits on the types of products you can sell in dropshipping – not everything is available to you
Being too flexible and agile risks leaving you with an unclear brand identity

Fact 5: The buck still stops with you

All this lack of responsibility might sound wonderful – you don’t need to produce your goods, don’t need to send them, and don’t need to concern yourself with anything other than your company’s bank balance. Not quite.

While you are not physically producing or sending the goods, they are still technically produced and sent by your company. That means that you are answerable to your customers and are responsible for any faults that occur.

When it’s ‘just’ your side hustle, it’s a good idea to invest in some help. This can come from either automation apps or VAs. Both can help you answer customers even when you are not physically around.

Pros

You still retain control over your business
Changing a supplier is easier than changing employees

Cons

Any problems caused by the dropshipping & print-on-demand company you use will need to be resolved by you
Using the services of another company to distribute your products mean that there is an added importance on the working relationship you have with them

A print-on-demand or dropshipping eCommerce business has opened up the market for people to start a business without having any stock. Both concepts make eCommerce a more flexible industry and are growing in popularity every year.

If you are interested in dipping your toe into eCommerce, then this is the perfect place to start. It’s low-risk and low-cost, and there are dozens of great products you could stock. Invest time and effort in building a brand that people are going to want to get to know.

Victoria Greene is a branding consultant and freelance writer. On her blog, VictoriaEcommerce, she shares tips on eCommerce and how entrepreneurs can develop their businesses. She is passionate about using her experience to help fellow entrepreneurs do better.