Many smaller businesses outsource production and warehousing to reduce costs, so it may come as no surprise to learn that there exists print-on-demand programs that offer similar low-overhead models for availing entrepreneurs. Backed by giants like Amazon and smaller, dedicated third parties, the print-on-demand model allows entrepreneurs to focus on design and marketing and leave the production process to those best equipped.
However, if you’re outsourcing so much of the process, can you really make a significant amount from print on demand? Here are the details to consider before going all in.
What is Print on Demand?
“Print on demand” is a business model that outsources production of merchandise. In general, a person will upload a design to the printer or production company and choose which items they’d like to sell with that design. On the printer’s side, the company will make the products as they’re ordered by customers.
Notable companies that offer a print-on-demand service include Amazon’s Merch on Demand and Printful. On Amazon, you create a graphic design, upload the artwork to Amazon’s program, choose your product type and add your description. Amazon handles the production, shipping and customer service. Similarly, Printful is a third-party platform that handles the production and shipping for items listed on eBay, Etsy and e-commerce sites like Shopify.
How much can you make using an on-demand model?
Of course, the most important question is: how much can you make? Print-on-demand outsources the entire production process, which understandably cuts into your profit margin. On the other hand, you won’t have to buy the mugs, t-shirts, hoodies, etc. in advance, or a printer to print your designs on those products, or need to rent a warehouse space to store all the goods. And if you use a full-service print-on-demand like Amazon, you won’t have to deal with shipping and customer service either. In exchange for essentially automating the process, you’ll pay a higher portion of your potential profits.
Amazon Merch creators earn a royalty fee between 13% and 37% depending on the product type and listing price. Listing prices are chosen by creators from a range predetermined by Amazon, so you won’t be able to charge outrageous amounts for a simple t-shirt. To put it another way, if you charge $19.99 for a t-shirt and take home 26% of that sale price, you’ll have made $5.23 in profit. Larger items may allow a profit margin closer to the higher end of the range, since customers are generally more willing to pay higher prices for sweatshirts than a sticker.
With Printful, since the company is a production and shipping platform for third-party listings (say, for Etsy sellers), the amount you can charge is not restricted. Mind you, while it costs $0 to list a product on eBay, it does cost you $0.20 to list a design on Etsy, which should be taken into account when you calculate your costs and estimated profit.
Keep in mind the advantages and disadvantages to each sales platform. Selling through Amazon gives you access to the millions of customers who already shop on the platform, but you’ll also be competing with all the other Amazon sellers and have little to no control of your sales. On the other hand, if you sell on Etsy or eBay, you won’t have the benefit of the customer service help and ready demand that Amazon offers.
How entrepreneurs can take advantage
The model is simple and can prove highly advantageous for the right person. A print-on-demand service can be a perfect solution for influencers or marketers who offer branded merchandise in their social media stores, and it can also be a great idea for entrepreneurs who prefer to work with a low-overhead model (i.e. with fewer out-of-pocket starting costs).
Consider, too, that creating a print-on-demand business can generate passive income for you after you’ve finished with the design and marketing parts. Once you’ve listed that item for sale, customers can potentially keep ordering your design until the end of time, so long as it’s enduring and popular enough.
The Amazon Merch on Demand process is straightforward and easy for beginners:
- Create a design and save it as a PNG file (which is a high-quality graphic file format).
- Upload that design onto Amazon Merch on Demand.
- Choose a product type and add an appropriate description.
- Amazon creates a 3D rendering of what your product will look like in real life.
- Amazon generates a product listing using your description on Amazon.com, making the product available to buy.
- When a customer makes a purchase, Amazon handles the production, shipping and customer service.
It’s important to note that a print-on-demand business will take some time to generate profits, just like any passive-income business idea. A lot of customer interest will be determined by how trendy and attractive your designs are at any given moment. Quick keyword research through DS Amazon Quick View and Pretty Merch Google Chrome extensions can help.
And you don’t have to be a graphic designer to make fun, sellable designs either. Sites like Creative Fabrica and Vexels offer commercial-use illustrations that you can put together and use instead of drawing your own. Memberships cost $79 a year for Creative Fabrica and $29 a month for Vexels. You can use their in-house generators and mock-up templates, or you can head over to our favorite free graphic tool Canva.
Bottom line
“Print on demand” is a business model that can generate significant amounts of income for relatively little active “work” time – a solid passive income idea to build wealth. You can be the designer, allowing you to exercise your creativity, and leave the backend processes to the production pros. “Print on demand” frees up your time in exchange for a greater percentage of your profits, but if you persevere, this side hustle can turn into a big passive money-maker over the long run.
