A print-on-demand service greatly minimizes (and often eliminates) the need to carry inventory. It also allows businesses to experiment with new products without any financial risk. Customers love unique, personalized merchandise — everything from shirts to mugs to wall art. With a print-on-demand service, business owners can create endless designs ready to sell.
Understanding a Print-on-Demand Business
A print-on-demand business is a model that allows you to create custom products, such as t-shirts, mugs, books, and more, without having to maintain a large inventory. The primary benefit is the elimination of risk and cost associated with stock handling.
In this business model, a customer places an order for a specific product featuring their design of choice. The order details are then forwarded to a third-party supplier. Using digital printing technology, this supplier prints the design onto the product and ships it directly to the customer.
This type of business is ideal for entrepreneurs, artists, and designers seeking a low-investment venture. Usually, the upfront costs are minimal. Which also makes it one of the best online businesses for beginners to start. It’s also a way for authors and publishers to print books only when a customer orders.
However, the business operator must remember that while they don’t handle physical products, they are still responsible for customer service. This includes dealing with returns and complaints. Moreover, the quality and delivery times are reliant on the third-party supplier, which can affect customer satisfaction. Another disadvantage to consider about this option is the lack of control. Using this model, you may lose control over your product quality and may not have access to full sales reports.
If you already have a core business, a print-on-demand service may be a great add-on. As a side service, you may be able to generate more revenue with minimal risk and costs. Let’s take a look at how this add-on can impact your business in a positive way.
1. Increase Profits
With a print-on-demand service, your business can expand its product line to include one-of-a-kind, custom designs without investing in bulk inventory upfront. You pay for each product when it sells, and a supplier handles the rest, including digital printing, order fulfillment, shipping, and even the return process.
This means that your brand can offer more unique products like hats, tote bags, or even hoodies with your branding on them. Also, a POD solution allows your brand to target specialized niche markets for more profitable sales.
For example, your brand can focus on t-shirts and hoodies popular with people who love fitness. You can do the same with individuals who like camping, grumpy cats, or true crime. This strategy can help your brand stand out among the competition, especially if you use SEO and other marketing tactics to boost your visibility online.
2. Eliminate Inventory Risk
Managing physical inventory can be a huge headache for small businesses. Even with the best planning, unexpected events can wrench your plans. Whether it’s a sudden sales surge or a natural disaster, the consequences of miscalculating your inventory needs can be devastating. With a POD service, you’ll only pay for products after they sell, eliminating the risk of buying in bulk or losing money on inventory that sits around and doesn’t move.
It’s also an excellent way to test new designs or merchandise for your business without spending too much money upfront. But if you’re considering this option, it’s essential to understand the pros and cons of the POD model. This will help you determine if it’s the right fit for your business.
3. Increase Customer Satisfaction
Print-on-demand services allow businesses to explore new designs and products without inventory risk. Small businesses, authors, and entrepreneurs can test their ideas in a low-risk environment and tap into a niche customer base. As customers place orders through an e-commerce storefront, the POD service prints and fulfills each order as it comes in. This eliminates the need to invest in inventory and saves on storage costs.
When it comes to ensuring customer satisfaction, good communication is key. Keeping your customers up to date on the progress of their orders is essential to build trust and loyalty. This can be accomplished by setting realistic delivery expectations with your customers and using automated notifications to keep them up-to-date on the status of their orders.
4. Increase Brand Recognition
Unlike traditional supply chains, print-on-demand services allow businesses to react to real-time market trends. If a product doesn’t sell, you can change it to one that does or even make new products entirely. This flexibility is invaluable, especially when it comes to marketing.
For example, if customizable t-shirts sell well, branching out into other products like long-sleeved shirts or hoodies is easy. This demonstrates your brand’s versatility and increases customer satisfaction. It’s also important to choose a print-on-demand company that values quality. Many companies cut corners to save on costs, which can reflect poorly on your business and ultimately impact sales. Check out reviews on social media or the company’s website to see what other customers have experienced.
5. Reduce Costs
You can choose a print-on-demand service offering lower shipping and production fees to decrease costs and increase sales profits. However, it will also require that you focus more on sales and marketing.
6. Increase Passive Revenue
Since production and shipping are handled by a third party, this increases the amount of passive revenue a business can generate. Passive revenue for many businesses is important. Especially for businesses that make money by offering services on an hourly basis. Income from a print-on-demand service allows businesses to re-invest income and scale easier.
For example, let’s say you create customer-standard T-shirts as a print-on-demand service. The average fee royalty on print-on-demand services is between 10%-25%. You decide to charge $19.99 per shirt and make a 25% royalty fee per sale, equaling $5.00 in profit. Amazon keeps the rest. Selling 20 items a day on many platforms is very possible. That would be nearly $3,000 in extra revenue per month.
The print-on-demand business model is an excellent choice for businesses needing more capital to invest in large amounts of inventory or the flexibility to test new products quickly without financial risk. For example, self-published authors can use a print-on-demand service to create books that are only printed when ordered, reducing expenses and eliminating the risk of waste. This may not be an issue if you use the print-on-demand service as a supplement or side business, but it is essential to remember this when choosing a printer.