My immediate reaction to learning about T-shirt drop shipping was, I am so opening a business! Little to no overhead? No stressful meetings with the bank? No leasing a brick and mortar? I could create a website and start selling products today. Right now. Why wouldn’t I?
Unfortunately, for all the advantages of drop shipping, there are also several disadvantages that every entrepreneur should take into account.
First things first- what is drop shipping?
If you’re like me you hear ‘supply chain’ and your mind wanders to what you’re having for dinner or when is a socially acceptable time to have a glass of wine. Simply…
Drop shipping eliminates the need for inventory and allows businesses to order through a third party who then delivers directly to the customer.
Needless to say, this isn’t a great business model for those wanting a physical location because the customer will never handle the product before the purchase. Imagine walking into an empty shop with a lone computer in the middle of it, making a purchase online and leaving. Drop shipping eliminates the need for inventory thus eliminating the need for a physical location.
It’s perfect for an e-commerce business model. Ever scrolled through social media and found an awesome T-shirt about running or drinking or your favourite show? Imagine that entrepreneur deciding to open his/her T-shirt business the week before. Drop shipping can make that a reality.
And in our current economic climate, where the market is constantly changing, drop shipping allows new business owners to worry less about the product and more about keeping up with the competition.
Ready to start designing your T-shirt? Already brainstorming domain names for your website? Hold up one minute. There are some areas that could cause you some trouble. Let’s dive in, shall we?
Shipping
Keep in mind that the world wide web is exactly that- worldwide. Meaning you could end up fulfilling an order halfway around the globe increasing your shipping costs and diminishing your profit margin.
I’ll just charge the customer for shipping.
That is definitely an option. Keep in mind you could quickly price yourself out. Not a lot of consumers will follow through with a purchase if the shipping is more than the product itself. In fact, a 2016 cart abandonment study found that 63% of online shoppers say highly priced shipping caused them to cancel their order.
The good news is the same study found that 94% of online shoppers took steps to attain free shipping. This could certainly be used to your advantage. For example; you could use it as an incentive to gain subscribers or set a specific price they must reach for free shipping.
Inventory
Drop shipping eliminates the need to carry an inventory, but it also means you lose control of fulfilment.
Imagine having someone place an order, you contact your third-party vendor only to learn they are on back order and now you’re tasked with explaining the mix up to your customer hoping they don’t cancel.
Not having an inventory saves you the initial overhead and relieves you of having to store or maintain it. However, having the product in hand ensures that when a purchase is made your business is able to fulfil it in the time promised. Relying on someone else to do the job is always risky.
Speaking of keeping promises…
Compliance
[content_band bg_color=”#E8F6D2″ border=”all”] [container]Do you have your very own T-shirt brand? Would you like to delegate the production and inventory stuff – for free? That’s right, Printsome’s Print on Demand services are free for a limited time. Join now![/container] [/content_band]Inventory and compliance go hand in hand. One of the benefits of drop shipping is that you can eliminate overhead by ordering the product as the purchases come in. But if your supplier messes up the timing, inventory, shipping or the product itself the consumer has no one else to blame but you.
When you choose drop shipping you’re trusting that your third-party vendor will always have the supply, always be on time and always be available if a problem arises. It’s a high expectation and a high risk.
Competition
Remember that worldwide internet we talked about? Imagine how many other people have the same idea and will utilize drop shipping. But suppose they have more staff or more money or a T-shirt business already… so they can offer a lower price or free shipping or free returns. Maybe they have customer support to handle any compliance issues. Maybe they can afford to offer big discounts.
For example; I just saw a ‘Harvard Law Just Kidding’ T-shirt that I found hilarious. I googled the phrase and found nine sites offering the shirt.
How will you gain my business? Can you offer a lower cost, free shipping and a guarantee it will be to me in 3-5 business days? All things to consider.
Low-Profit Margin
To compete with other business you’ll need to offer lower prices and free if not low shipping. All of this causes your profit margin to get smaller and smaller. Meaning you’re making less on each sale. Meaning you’ll need to sell a lot to sustain your business. It may take time to build your customer base enough to support yourself. With such low profits on each sale, you’ll need to increase the number of transactions. The point being, don’t expect to quit your day job anytime soon.
Conclusion
Okay, so you’ve read the disadvantages of drop shipping and feel a bit daft for thinking you could become an entrepreneur overnight. Fret not! There are still plenty of reasons to dive in. Low overhead costs, easy setup and the ever-growing e-commerce market make opening a T-shirt business completely pliable.
From 2012 to 2016 online revenue in the UK increased from £33.24 billion to £67 billion.
That’s a 98% increase!!
Great Britain is among one of the highest for online revenue and Europe’s 2023 online retail revenue is predicted to be 483,8 billion in US dollars. I’d say there is plenty of room for your young and budding business.
How Printsome Can Help
Here at Printsome, we’ve always supported creative endeavours which is why we’re proud of our print on demand in Europe service.
Thanks to our five years of experience in the T-shirt printing industry, we were able to design a platform to cover a T-shirt fulfillment service catered towards the needs of artists, designers,
‘Print on Demand’ allows you to order one T-shirt or twenty instead of in bulk models that most third-party vendors offer.
The first step is to connect your Shopify Store. From the moment you connect your online shop with our Shopify T-shirt fulfillment platform, anyone can buy one of your designs. We deliver all over the UK, Europe and the rest of the world. T-shirt drop shipping has never been this easy!
Why worry about inventory or logistics when we can take care of that? We deal with the boring stuff so you have more time to do what you love. To find out more, simply visit our brand new website.
Text: Sarah Loughry
