February 11, 2022
The Pitfalls of Dropshipping T-Shirts: why print-on-demand isn’t all it’s cracked up to be
By: Peter Gregory
February 11, 2022
By: Peter Gregory
If you’re in the early stages of setting up a t-shirt design business, then you will have heard of print-on-demand t-shirts, or t-shirt dropshipping. This tempting business model promises to save your business lots of time and money, but is it really as good as it sounds?
With print-on-demand, you don’t have to invest in a batch of tees up-front. Instead, you wait until a customer buys a single t-shirt, then you get their design printed onto a blank and get it sent out to them. This on-demand model keeps your costs very low, but it makes it much harder to grow a valuable long-term clothing brand.
In this week’s article, we’re going to show you why print-on-demand is not the best way to start a new business. We’ll explode some of the common myths of dropshipping, and show you how you can succeed much faster, and build a much stronger brand, if you tackle the t-shirt printing and posting work yourself.
Print-on-demand might sound like a great way to start a t-shirt business. In theory, you have low financial risks, immediate profits and very little work to do day-to-day. In practice, there’s a lot more to running and growing a successful t-shirt design business.
Here are our 10 reasons why not to launch a t-shirt business with dropshipping:
The biggest myth with dropshipping is that it requires no money up-front. This isn’t true. You need enough cash on hand to pay for the production and postage of each t-shirt you sell, and it can take a week or longer to get paid.
Just to explain, with print-on-demand, each sale happens in two transactions. First, your customer buys a t-shirt from your business. Second, your business buys that t-shirt from your dropshipper, who makes and sends it for you.
If all card payments were instant, then there wouldn’t be a problem with this business model. Money would flow neatly from the shopper to the designer, who would take their profits out and send the rest of the money on to the printer.
In reality, it can take a few days for your shopper’s card payment to land in your account (see our guide to card payments here). This means that there’s often a gap of 2-5 days between when you pay your printer for a tee and when you actually get paid for that same tee.
If you’re only selling one or two t-shirts a day this isn’t a problem, but if a product suddenly goes viral, you’ll need to lay your hands on lots of cash at short notice. Cash flow management can become a nightmare with little or no warning.
Your t-shirt should at least have a neck label with your brand on it. We’re a woven labels business, so you might be thinking, “of course they’ll say that!”. The reality is, if you don’t have a label in your shirt, your loyal customers aren’t going to be able to buy another garment from you. In years to come, they just won’t remember where they bought their favourite t-shirt from, and you’ll make life much harder for your business in the long run.
There aren’t many print-on-demand shirt companies out there that will print your logo on the packaging, never mind relabel your garments for you. Those that do offer a relabelling service will charge a premium for the service, because relabelling is often just too fiddly for them and they don’t want to get involved in it.
If you want to build a valuable, legitimate fashion brand, you need to add at least one custom label (woven or printed). It’s non-negotiable. Labels drive repeat sales, improve brand perception and help you build your business into a long-term enterprise. Our T-shirt labels explained article covers it all in more detail.
A great t-shirt product is not all about the graphic design. The way a t-shirt feels against your customer’s skin is an important part of the buyer experience. If you want to have any control over the fit, size range, colour, thread count or even the basic fibre content of your blank t-shirt, then dropshipping isn’t going to work for you.
When you work with a third-party print-on-demand service, you have to use the stock t-shirt that they have chosen … and the quality of this shirt is often determined by price and profit margin, rather than cut or comfort.
You can’t surrender this much control over the quality of your product — it’s just too important. You need to have some say over the blank t-shirt that you’re printing on. We have a guide to picking the right blank t-shirt which will help explain some of the factors you need to consider.
Print method affects everything about the finished t-shirt, from how the t-shirt feels and breathes against the skin to how long the product will last after multiple washes. If you can’t control whether your t-shirts are made with dye sublimation, heat transfer vinyl, screen printed plastisol or a digital DTG printer, then you can’t control the fundamental performance of your t-shirt over time.
This is a problem for anyone trying to build a business with dropshipping, because most print-on-demand shops are set up to offer one or maybe two t-shirt printing methods. If you don’t like the way in which they apply your designs to your blank t-shirts, there’s not a lot you can do. Customers that should have fallen in love with your brand will fall away if the quality of your products is poor. Your customer reviews and your returns rate will be much worse, too.
Dropshipping forces you to sell your t-shirts at a higher price than you might feel comfortable with. The main benefit of dropshipping is that another business has to purchase, print and post your goods for you. That third-party business has to make its own profit, so they mark up the price of every step of the production process. You’ll have to pay a higher price for the blank t-shirt, the print materials, the shipping — everything — and then you’ll have to try and add enough of a margin to your retail price so that you can make a profit yourself.
In the UK, a high quality custom printed t-shirt from a dropshipper typically costs around £10. When you factor in the costs of running your own business (your labour, postage, branding, website costs, marketing and so on), the cost of each shirt increases way beyond this price point. You have to price your tees at a high price just to make even a small profit.
This pricing/profits problem could get even worse if we see a lot of inflation in future. Every time your dropshipper’s prices go up, you have to either shoulder the cost yourself (and make a smaller profit) or increase your own price (potentially pricing yourself out of the market).
This might come as a surprise, but it’s actually harder to go full time with a print-on-demand model than it would be if you were just bulk-buying, bulk-print and shipping your own stock yourself. Your costs per-t-shirt are much higher than they would be if you bought and printed your own stock, so you have to sell a lot more t-shirts before your business has enough extra cash to pay a wage.
If you place a bulk order for t-shirts — even if it’s just a short run of 20 or 50 tees — the cost on each item can halve, depending on your supplier. This massively increases your gross profits on each sale. Granted, you run the risk of getting stuck with a few hundred shirts that don’t sell very well, but if this happens, you can afford to offer them in a clearance area of your site at a deep discount. Depending on how much you spent and how many you have to sell, you could find yourself still making a small profit.
Customer service is all about taking pride in the quality of your product and your standards of service. It’s hard to offer a great customer service experience when your t-shirts are being shipped out by a third party, because you have no control over either quality or service standards. And dropshipping does expose your business to a greater risk of delayed shipments and quality issues.
Delays are common with print-on-demand, because you are just one of many businesses who have to share a busy production queue. If your dropshipper’s printing equipment breaks down or if the dropshipper gets in more orders than they can handle, then your t-shirts could take days to make it off the printer pile and into the packing room. Goods can be delayed in the packing room, too. If there’s a queue of parcels to ship out and your parcels miss a mailing deadline, then your shipment can be delayed by a further 24 hours. In today’s climate, customers expect next-day delivery as standard. It’s just not acceptable for a shopper to have to wait a week or more for their purchases to arrive.
Product quality is a common issue with dropshipping, too. There’s not enough personal responsibility. If you’re a business owner shipping your own goods, then you’ll check every product you send out to make sure that the design looks good, edges aren’t frayed and so on. A busy warehouse operative in a print-on-demand factory is not going to give your product the same level of attention.
Packaging is such an important part of the way your brand is perceived. When an online shopper’s parcel arrives on their doorstep, it’s often the first time that they have any tactile, 3D sensation of what your business is all about.
There are so many great ways to customise your packaging if you do it yourself (we’ve written an article about sustainable packaging here). If a faceless fulfilment centre handles the packaging for you, then you don’t have any control over your customer’s first face-to-face experience of your brand.
Dropshippers also won’t stuff your packaging with anything other than your product. In other words, you can’t add a coupon or voucher to encourage repeat business (this is a must when you’re starting out), nor can you add any special freebies. In-parcel freebies are a great way to grow your brand. If you’re in need of inspiration, take a look at our branded freebies guide!
Here in the UK, shoppers have a legal right to return goods bought online. If a UK customer buys just about anything from a website, then they have 14 days to change their mind, send it back and get a full refund. Clothing customers are also fully entitled to return items if they don’t fit correctly or if they don’t like the feel or colour (source: gov.uk).
UK returns laws are a big problem for British t-shirt designers who rely on a dropshipping model:
Returns are an unavoidable part of running a clothing business. Print-on-demand makes it so much harder to meet your minimum legal obligations and still stay profitable. It’s much easier to just ‘bite the bullet’ and set yourself up to store and ship stock yourself from day one.
When you’re a startup, you need to be able to move fast. A designer who has even the most basic screen printer and heat press will be able to experiment with new products and designs in a matter of minutes. If, on the other hand, you rely on a third party printer for everything you sell, then it can take a week or more just to see if a new t-shirt idea is going to work.
When your business has everything it needs to make products on-site, you have complete freedom as a designer. You can work day or night, work weekends, produce freebie products for local charities, try a line of bags or tea towels, whatever you want. Your business can bend and flex to suit the market you’re in. If you take your designs to a local market stall and you sell out at 10:30, you can have more stock on the racks by lunchtime. There really is no stopping you. Setting yourself up with production tools might cost a little more up-front, but it’s worth it in the end.
That’s it for this week! I hope we’ve convinced you to avoid starting your business with a faceless dropshipping model.
If you’re serious about building a valuable, respected brand, then you need to value and respect the product you’re making. You need to look closely at what you do and figure out how to make it the very best that it can be. You have to have control and oversight of the thing you’re making and selling, otherwise your business is going to struggle to get off the ground.
Our advice is to do what you can to invest up-front. When you have properly branded stock on your own shelf, you’ll ship better quality goods and deliver a better standard of customer service. You’ll also sell everything at a better profit margin. Happier customers, more money and more control … what’s not to love?
Good luck with your new t-shirt business! Let us know how you get on.
Thanks for reading!