What is Drop shipping, POD, and Warehousing & Fulfillment
If you’re just starting out in the world of e-commerce, it can be intimidating and it’s easy to get lost in the industry jargon. There are a lot of choices out there, from choosing between different business models to deciding which service provider to go for, it can be overwhelming and you’ll find yourself asking which one do you really need.
In this blog we will go over these topics and their pros and cons:
Print on demand
Drop shipping
Warehousing and fulfillment
Print on demand
What is print on demand?
With print on demand (POD), there’s no “inventory” as products are only made when there is an order and quantity and design depends to what the order asks for.
What are the pros of POD?
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You don’t need to invest on printers yourself - buying printers can be very expensive, good thing about this model is that your POD partner takes care of all the technical stuffs, so you don’t really need to learn how to print a product yourself.
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No need for bulk printing or stocking up - your POD partner will only print a product once there’s an order.
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You can easily experiment designing different products - you can try out different styles to put on your products and see which one attracts your customers. You can check out pixoprint.net and get an idea with how easy it is to setup your own shop and how to design your own products. Since, products are printed on demand you’re not gonna shell out a huge amount and you can easily add or remove products from your store.
Cons of POD
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Depending on your printing partner for quality and availability of products.
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Loosing control over the fulfillment process - order fulfillment might take a bit longer than the usual as products are made per order.
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Handling customer returns can be tricky - make sure to setup a return policy that is reasonable financially to you and ideally works with your POD partner’s policy.
Who is POD for?
POD, is ideal for stores that’s just starting out and wants more freedom in doing product testing.
What is drop shipping?
Drop shipping is somehow similar to POD, in which you don’t need to keep an inventory of the products you’re selling. You purchases products from a third-party supplier who then ships the products directly to your customers.
What are the pros of drop shipping?
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You don’t need huge investments to start your store - You only pay for products when a customer orders.
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You can easily experiment on products to sell - since you’re not required to have an inventory, you can experiment on products by adding them to your store quickly without the need of stocking.
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No hassle with order fulfillment and shipping - your supplier or the dropshipper will take care of sending the ordered products to your customers.
Cons of drop shipping?
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No control over the order fulfillment process.
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Smaller profit margins for you - There’s two transactions – your customer buys the product from you, which you then in turn buy from your drop shipper and may incur additional transaction fees.
Who is drop shipping for?
It is ideal for stores that are still starting out.
What is warehousing and fulfillment (W&F)?
With W&F services (commonly known as third-party logistics or 3PL) you get to keep a stock of your products at a warehouse of your partner who fulfills incoming orders and sends them to your customers.
What are the pros of W&F?
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A 3PL partner will take care of packing and shipping products for you - you’ll have more time to study or market your products.
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It’s a space saver - Storing your products at a warehouse can solve the issue of not having enough storage space for your stocks.
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You get access to better or lower shipping rates.
Cons of W&F?
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It’s not suitable for startups or smaller stores. Depending on your fulfillment partner, there are several things you’ll have to pay for like storage, fulfillment, shipping.
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Once again, you lose some amount of control over what happens to your products. If you keep your stock at your own place, you’re always in control over what happens to it. Make sure you find a 3PL partner that you can trust 100% to handle your products with the same care as you would.
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Moving your products can be a hassle. Although 3PL companies will let you know about your product inventory and when you’re running out of stocks, delivering your items to their warehouse in time can still be an issue in terms of having it there on time and safe.
Who is warehousing & fulfillment for?
W&F is a great help for stores that are already established and has a steady stream of orders.
Do you have any questions about POD, drop shipping or W&F?
Feel free to share it all in the comments below!
