When you’re starting an online retail business, purchasing inventory up front and finding ways to store those items requires time and money. For business owners who prefer not to take on that level of investment, there are a few different ways to get your business off the ground without having to manage or invest in inventory.
Here’s what you need to know about those print-on-demand, dropshipping, and made-to-order business models.
Option #1: Print-on-demand
Print-on-demand is one of the most popular options for people selling online without the space or the bandwidth to manage inventory. Here’s how it works: You offer your customers a range of items customized with artwork you select, whether original designs, your logo, or a custom catchphrase. The items that feature your designs can be the core products of your business, or they can be merch created to help market your main business (like band t-shirts, or mugs with a memorable quote from your podcast). Each time a customer purchases something from your shop, your print-on-demand partner physically prints your design onto a specified item.
Instead of buying items wholesale or printing everything you plan to sell in advance, each item is created in response to a sale. That may free you up to release new designs whenever inspiration strikes, in response to trending topics or based on seasonality. In addition to eliminating inventory, print-on-demand also may reduce your risk as a business owner because it may tie your costs directly to your sales. Reducing excess spending — and avoiding complicated financial calculations — is another reason that print-on-demand is such a great option.
Option #2: Dropshipping
While print-on-demand is a production-focused option, the dropshipping model focuses on fulfillment. A dropshipping partner may store and manage your inventory for you. Each time a customer makes a purchase on your website, your dropshipping partner will package and ship the items to the customer on your behalf. Some drop-shipping companies allow you to customize your packaging and labels to give your customers a fully branded experience.
Many companies offer both print-on-demand and dropshipping services. Going the two-in-one route means that instead of holding your inventory, your partner can physically create each item when you make a sale and ship packages out to customers for you. From your customer’s perspective, visiting your website, placing an order, and receiving their shipment will be one complete interaction with your business. From your perspective as an online seller, every step that comes after making the sale is completed by third-party partners on your behalf.
Whether you’re working with a print-on-demand company, a dropshipping service, or one entity that does both, make sure to set up your website so it communicates directly with your partners. When you create your online store with a Squarespace Commerce subscription, you can choose from a library of Extensions that integrate print-on-demand and dropshipping services directly with your website. That makes for seamless, headache-free transactions for both you and your customers.
Option #3: Made-to-order
Running a made-to-order business is a little like being your own print-on-demand partner. The idea is that instead of creating an inventory of items you need to store until someone purchases them, you create each item based on the orders that come in. The details of production may change if you’re working with a manufacturing partner or creating the goods yourself, but the sales-first structure is the same.
There are a lot of ways to run a made-to-order business. For artists, for example, one possible model would be creating based on commission. Instead of running a print series, you might paint each portrait or print each photograph based on individual commissions from clients. In other industries, like clothes or crafts, for example, a pre-order structure might make more sense. You can create a single unit of the item you want to sell, photograph it, and list it on your website; then your customers can purchase the item even though you haven’t physically created it yet.
You can wait until you reach a specific number of sales, or count how many sales you’ve made within a particular time frame. Since you won’t start making the items until you already have a closed list of orders, you’ll know exactly how many you need to produce. The made-to-order model avoids inventory because you can ship off each item as soon as it’s ready instead of having to store it until someone makes a purchase after the fact.
Ready to start an online store without inventory?