Print on Demand, Dropshipping and Warehousing & Fulfillment: Which one is the better business model?
The E-Commerce sector in India has recorded a steady growth since the last decade. In fact, the Indian E-Commerce industry is predicted to transcend the US with a catapulting progress by being the 2nd largest E-Commerce market in the world by 2034.
Considering the plenteousness of choices among contrasting business models, you are most likely to get perplexed in the industry jargon. In order to catch the differences, Vendorboat will help you to comprehend the three juxtaposing business models which are Print on Demand, Dropshipping and Warehousing & Fulfillment and find out which one is the better business model.
Analyzing Print on Demand or POD:
In the true sense of the term, products are customized or printed as per the designs of the customer as soon as the order strikes in. Print on Demand is also known as On Demand Printing. Under this format no stock inventory is required as printing is done only after ordering.
Advantages:
- Less storage space is required as there will be no excess inventory. You don’t have to keep any product in bulk. Products are usually produced in small quantities.
- More creative liberty to experiment is provided by the modern digital printing. If your personalized design doesn’t create much traffic, you can simply move to trying another design.
- Technical requirements are reduced since your main focus will be on the demand part. Your Print on Demand partner will be responsible for the printing process and reinforcing the exact technology for it.
Obstacles:
- The crucial part of this model is reliant on your printing partner and his availability. If your partner does not meet the required delivery and quality of the products, your business might place in peril.
- Print on demand consumes a lot of time for the products to be ready before delivery. Delays are slightly treated with disdain in this business.
- Return policy or management, here, requires more attention. It should be reasonable enough and you should be able to communicate better with your customers.
To read more elaborately about Print on Demand business model, read this blog on Vendorboat.
Analyzing Dropshipping:
The Drop shipping E-Commerce model allows a store to avoid the stocking of products. Instead, the products are purchased from a third party supplier and then shipped directly to the customer. Thus, a physical inventory is not at all needed.
Advantages:
- Capital requirements are less in launching a Drop Shipping business. There is no expense for inventory.
- It is pretty much easier to experiment with and afford a wide variety of products with minimal risks.
- Since drop shippers take charge of the shipping and order fulfillment, you get more time to put emphasis on your store.
Obstacles:
- Like Print on Demand, you lose control over the demand fulfillment process and the quality of the products as you have to trust the drop shippers with that.
- Your business efficiency might get jeopardized due to some fault on the drop shipper’s part, thus, ruining your brand name to your potential customers.
If you want to start a Drop Shipping business of your own on Vendorboat, click here.
Analyzing Warehousing and Fulfillment:
Under the Warehousing and Fulfillment business format, you get to store a stock of your products at your own warehouse or at the warehouse of your partner from where the orders are shipped to your end-customers. It is often referred to as third-party logistics or 3PL.
Advantages:
- Your 3PL partner remains responsible for packaging and shipping the products, resultantly, providing you more time to concentrate on marketing strategies, customer care etc.
- Unlike other models, it is a lot cheaper and a space saver because you get to keep the stock at a warehouse, thus, there will be no extra cost for an office and employees. Plus, you get reasonable shipping rates.
Obstacles:
- Similarly like Print on Demand and Drop Shipping, you don’t get to keep some amount of tab on your products. They are completely handled by your 3PL partner.
- You are left with an underused inventory in case a product fails to function well. It can incur a huge loss for your business.
Your Preference: Print on Demand, Dropshipping or Warehousing & Fulfillment.
If you are willing to launch a start-up in the field of E-Commerce, Print on Demand and Dropshipping would be the ideal models to kick off with. You will be devoid of any surfeit of inventory. Although, there is a little less profit margin in Print on Demand, but you can steer clear of any big losses. Under Drop Shipping, you will be able to set your own profit margin by efficiently handling your brand and also the investments are low. Both Print on Demand and Dropshipping are somewhat similar models.
In case you are a well-established firm and keep on receiving a great deal of orders from your customers then Warehousing and Fulfillment services would prove to be very beneficial for you. You can spare a lot of valuable time to your business plans other than packaging and shipping.
Given the pros and cons of all the models, it narrows down to your business mindset. Make sure to do a proper research work to find which one among Print on Demand, Dropshipping and Warehousing and Fulfillment, works the best for you. Do not forget to visit our website for more such E-Commerce content.