Dropshipping vs Handmade Products Which Online Business Model Reigns Supreme

Isaac Hill
Sep 26
3 min read

When you think about starting an online business, two popular models often come to mind: dropshipping and handmade products. Both options have their advantages, but they cater to different needs and values. Let’s dive deeper into each model to help you decide which is the best for you.

What is Dropshipping?

Dropshipping is a retail fulfillment method where an online store does not keep products in stock. Instead, when a store makes a sale, it buys the item from a third party and has it shipped directly to the customer. This means the seller never handles the product directly.

The allure of dropshipping is its simplicity. Entrepreneurs can launch an online store with minimal upfront investment in inventory, making it accessible for many.

Pros of Dropshipping

Low Upfront Cost: One of the biggest benefits of dropshipping is the low initial investment required. You don't need to buy inventory upfront, which can save new business owners thousands of dollars.
Easy to Test Products: With the dropshipping model, you can quickly test a variety of products to see what your customers like. For instance, if you launch five products and one sells 40% more than others, you can quickly adjust to focus on what works.
Huge Variety of Products to Sell: You aren’t limited by inventory, allowing you to offer an extensive range of products. For example, an online store could stock products across multiple categories—from electronics to home decor—attracting a broader customer base.

Cons of Dropshipping

Longer Shipping Times: A significant downside is the potential for longer shipping times, especially if suppliers are located overseas. On average, customers might wait 14 to 30 days for their orders, which can lead to dissatisfaction.
No Quality Control: Since you don’t handle products, you can't ensure quality. Reports show that 20% of dropshipping customers report issues with product quality, which can result in negative reviews.
Lower Brand Loyalty: Customers can easily find the same products from various sellers online. This can lead to less brand loyalty. In fact, brands with strong followings see an average of 25% more repeat purchases than brands relying solely on competitive pricing.