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1. Understanding the basics of print on demand

Print on demand vs. inventory: What's best for your business?

When it comes to starting your own online store, knowing the best approach to deliver your products to your customers is crucial. Today, we explore two prevalent options: print on demand and the traditional inventory model. Both have their merits and drawbacks, with factors like initial investment, scalability, and risk playing significant roles in the decision-making process. By understanding these two methods, you can make the best decision for your business.

Main takeaways from this article:

  • Print on demand (POD) and traditional inventory models are two main options for online stores. POD is more recent, customizable, and doesn't require physical inventory, while the Inventory model needs upfront investment and inventory management.

  • POD benefits include reduced risk, unlimited product variety, easy customization, cost-effective startup, scalability, global reach, and high-quality products.

  • The traditional inventory model has been there for longer and involves buying products in bulk, storing, and selling over time. It requires significant initial investment, involves capital risk, and requires intensive inventory management.

  • A comparison between the two shows POD has lower upfront costs, is more time-efficient, and is scalable according to demand. The traditional inventory model, although more hands-on, allows for potential growth in new markets.

  • Choosing the right model depends on your business needs, financial capacity, and business model. 

  • Gelato's print on demand platform offers flexibility, quality, and global reach, making it an excellent choice for businesses of all sizes.

Understanding the basics of print on demand

02_Understanding the basics of print on demand

Let's start with a relatively newer player in the field - print on demand. It's a method that answers the consumers' desire for personalized items coupled with the convenience of online shopping.

Print on demand (POD) has revolutionized the way businesses approach customization. With this innovative process, you have the ability to work with a third-party supplier to create and sell white-label products that are customized with your own designs. Whether it's books, clothing, or home decor, POD allows you to offer a wide range of personalized items to your customers.

So, how does print on demand work exactly?

What is print on demand?

Print on demand is a process where you collaborate with a third-party supplier to customize white-label products with your own designs and sell them on a per-order basis. The beauty of this method lies in its name - you only print what your customers order. Gone are the days of mass-producing products and hoping to sell them on your own website at retail price. With POD, you can create unique designs and bring them to life as customers place orders.

Now, let's dive into the process of print on demand.

The process of print on demand

Imagine this: a customer visits your ecommerce store and falls in love with one of your custom designs. They proceed to place an order, eagerly anticipating the arrival of their personalized item. Behind the scenes, the order is seamlessly forwarded to your POD supplier, who takes care of the rest.

Once the order reaches your supplier, they begin the production process. Using state-of-the-art printing technology like DTG, they transfer your design onto the chosen product.

After the printing process is complete, your supplier carefully packages the product, ensuring it is well-protected for its journey to the customer. The package is then handed over to the shipping carrier, who takes charge of delivering it to your customer's doorstep.

What sets print on demand apart is the elimination of the need for you to hold any physical inventory. With traditional business models, you would have to invest in stock, store it, and manage the logistics of shipping. However, with POD, you can focus on what you do best - creating designs and marketing them to your audience - while leaving the production and fulfillment to the experts.

Benefits of print on demand

The print on demand model offers numerous advantages for businesses, both big and small.

  • No inventory management: With print on demand, there's no need to maintain stock, freeing up time and resources for other areas of your business.

  • Reduced risk: Since products are only made when an order is placed, the risk of unsold inventory and capital loss is significantly reduced.

  • Unlimited product variety: You can offer a vast range of products and designs without worrying about stocking each variation.

  • Easy customization: Print on demand allows easy customization, offering customers a unique and personalized product experience.

  • Cost-effective startup: The initial investment is low as there's no need to purchase and store inventory upfront.

  • Scalability: It's easy to scale your business with print on demand, as you can effortlessly adjust to changes in demand without worrying about overstocking or understocking.

  • Global reach: With platforms like Gelato, you can sell products worldwide, increasing your market reach and potential customer base. 

  • High-quality products: Despite the lack of inventory, the quality of print on demand products, especially with services like Gelato, remains high and consistent.

Exploring the traditional inventory model

03_Exploring the traditional inventory model

Now that we understand the POD model, let's delve into the traditional inventory model – a system that's been there for ages.

What is the traditional inventory business model?

The traditional inventory model, also known as the stock holding method, is a more traditional way of doing business. It involves purchasing your products in bulk and selling them over time. Essentially, you buy low, store, sell high, and repeat the process.

Considerations for the inventory business model

The process of maintaining an inventory involves buying in bulk, storing the goods until they are sold, and managing the stock levels to ensure you're never 'out of stock'. 

However, there are certain things you need to consider when opting for the inventory model.

1. High startup costs

Launching a business with an inventory model requires a significant initial investment. These costs include purchasing the inventory, warehousing, and potentially staff to manage the inventory.

2. Intensive capital requirement and risk

Maintaining an inventory demands constant capital influx for restocking. Additionally, there's an inherent risk of unsold stock that can lead to financial losses.

3. Difficulty in inventory management

Managing an inventory involves time and effort. Accurate tracking, stock rotation, and avoiding product spoilage or obsolescence are persistent challenges.

4. Wastage and losses due to obsolete inventory

Products in stock risk becoming obsolete or going out of style, leading to potential losses. This is especially true for industries with rapidly changing trends.

5. Limitations on product variety and customization

Inventory businesses might limit their product range due to stocking constraints. Moreover, customization options may be less flexible as each variant would require a separate inventory.

6. Demand forecasting challenges

Inventory-based businesses have to accurately predict demand to avoid stockouts or overstocks. Incorrect forecasts can result in lost sales or wasted inventory.

7. Logistics and storage issues

Physical inventory requires storage space and efficient logistics. This can be a significant burden, especially for small businesses or startups with limited resources.

Comparing print on demand and inventory

04_Comparing print on demand and inventory

Now that we've explored both models, let's compare them head-to-head to see how they square off in various business aspects.

Print on demand (POD) and Inventory are two popular models for businesses looking to sell physical products, like t-shirts, wall art, phone cases, mugs, photo books, etc. Each model has its own advantages and considerations, and understanding the differences between them is crucial for making informed decisions.

Cost comparison

When considering the cost, the POD model demands a significantly lower investment upfront compared to the inventory model. This is because, with POD, you don't have to spend money on purchasing and storing inventory or worry about high shipping costs. Instead, you only produce items as they are ordered by customers. 

On the other hand, the cost per unit in the inventory model tends to be lower when purchased in bulk. By buying in larger quantities, businesses can take advantage of economies of scale and negotiate better deals with suppliers.

If you have limited capital and want to minimize risk, POD may be a more suitable option. However, if you have the resources to invest upfront and are confident in the demand for your products, the inventory model could be a viable choice.

Time efficiency comparison

In terms of time efficiency, the POD model wins with its hands-off approach. Businesses can focus more on their marketing tactics and designs, leaving the tedious process of printing and shipping to the supplier. With POD, you don't have to worry about managing inventory levels, packaging, and fulfillment. This allows you to allocate more time and energy toward growing your business and developing new product ideas.

On the other hand, the inventory model requires more hands-on management. You need to keep track of inventory levels, manage storage space, and handle the packaging and shipping process. While this may require more time and effort, it also gives you more control over the entire customer experience. You can ensure that products are packaged with care and shipped in a timely manner, which can contribute to customer satisfaction and repeat business.

Scalability comparison

In terms of scalability, both methods present different opportunities. POD is excellent for testing products and scaling with designs that work. Since you only produce items as they are ordered, you can easily introduce new designs and test their market demand without the risk of holding excess inventory. If a design becomes popular, you can quickly scale up production to meet the demand.

On the other hand, the inventory model allows potential growth in new markets if you have the budget to invest. With a stock of inventory readily available, you can quickly fulfill orders and expand into new markets without any production delays. This can be especially beneficial if you have identified untapped markets or anticipate a surge in demand.

Determining what's best for your business

05_Determining what_s best for your business

After comparing both models, let's now look at how to decide on the best model for your unique business situation.

Assessing your business needs

Firstly, look at what your business needs. Identify your target market, analyze their preferences, and see what kind of products they're likely to buy. Are you targeting a specific demographic? Are they more inclined to purchase customized products, or are they satisfied with generic options? These are important questions to consider when determining the best model for your business.

Evaluating your financial capacity

If you're starting and operating on a tight budget, POD (Print on Demand) might be a better option for you. With POD, you can minimize upfront costs as products are only manufactured when an order is placed. This allows you to avoid the expense of maintaining inventory and reduces the risk of overstocking. 

On the other hand, if you have the financial reservoir and can afford to take on more risk, an inventory model could offer more profitability.

Considering your business model

Are you starting a passion project and hoping to grow slowly and steadily, or are you eager to break into the market with a wide range of products? Your business plans and targets would play a crucial role in choosing the right model.

If you're starting small and testing the market, POD can be a great option. It allows you to launch print on demand products under your own brand without significant upfront investment and gives you the flexibility to adapt and refine your offerings based on customer feedback. On the other hand, if you're aiming for rapid growth and have a clear product roadmap, an inventory model might be more suitable.

Grow your online store with Gelato's print on demand platform

Whether you're a seasoned entrepreneur or just starting out, Gelato's print on demand platform can be a game-changer for your business. Gelato eliminates the need for inventory, enabling you to focus more on your core competencies rather than logistics and inventory management.

With Gelato, you have the flexibility to offer an unlimited range of products, all customizable to your customers' preferences. No more worrying about unsold inventory or being restricted by storage space. You simply create and sell products according to demand, while also incorporating your brand-specific packaging to give your customers a personalized experience.

But it's not just about ease and flexibility. Gelato's platform offers a distinct edge in terms of quality. Each product is printed with attention to detail, ensuring your customers receive only top-notch goods. Plus, with Gelato's global network, your business isn't confined to local or regional markets. You can scale your business globally, reaching out to customers anywhere in the world.

So why wait? Propel your business forward with Gelato's print on demand platform and unleash a new world of possibilities. Sign up for Gelato today.

POD vs. inventory FAQs

1. What is the key difference between a print on demand and an inventory business model?

In a print on demand model, products are created as orders come in, eliminating the need for inventory. An inventory model requires you to pre-purchase and store products, predicting what will sell.

2. How does print on demand help reduce business risks compared to an inventory model?

Print on demand significantly reduces risks related to unsold inventory, capital loss, and product obsolescence, as products are created only when a customer places an order.

3. Can print on demand offer the same quality as inventory-based businesses?

Yes, with platforms like Gelato, print on demand businesses can provide high-quality, customizable products that match or even exceed the quality of inventory-based businesses.

4. How can print on demand support the scalability of my business?

With print on demand, you can easily scale your business to match demand. You don't need to worry about running out of inventory or having unsold stock. Additionally, services like Gelato allow you to reach a global market.

5. Can I offer a wide variety of products with the print on demand model?

Yes, print on demand gives you the freedom to offer a vast variety of products. As there's no need to have your own inventory, you can provide as many designs or variations as you like.


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