Before you choose a platform, a logo or a product, you need to decide how your store will get its products to customers. That choice affects how much money you need, the margins you can expect, how much control you have and how much work the business takes.
There are four common models for a new e-commerce business. Many stores end up combining two or more, but it helps to understand each one on its own first.
1. Dropshipping
You sell products that a supplier stores and ships directly to your customers. You buy each item only after it has been sold.
- Money needed: low. Mainly store costs and marketing.
- Margin: often low to medium, because many stores can sell the same products.
- Control: low over stock, packaging and delivery.
- Best for: testing niches, wide catalogues and bulky products.
Read more in What is dropshipping?
2. Buying wholesale stock
You buy products in bulk from a wholesaler or manufacturer, store them and ship orders yourself or through a fulfilment company.
- Money needed: medium to high. You pay for stock before you sell it.
- Margin: higher, thanks to bulk prices and cheaper shipping per item.
- Control: high over stock, packaging and delivery speed.
- Risk: unsold stock.
- Best for: products you already know will sell.
Many suppliers in our directory sell both wholesale and dropship: see wholesalers and distributors.
3. Print on demand
You create designs; a print-on-demand service prints them on t-shirts, mugs, posters, phone cases or books after each order and ships them.
- Money needed: low.
- Margin: medium. Unit costs are higher than bulk printing, but your designs are unique.
- Control: medium. You choose the products and designs; the print partner handles quality and shipping.
- Best for: designers, artists, authors, and creators with an audience.
Compare print-on-demand services.
4. Private label
You sell existing products under your own brand: a manufacturer makes them, and you put your label and packaging on them. Some private-label services, such as Blanka for cosmetics, also dropship with no minimum order.
- Money needed: from low (dropshipped private label) to high (custom manufacturing with minimum orders).
- Margin: the highest of the four, because customers cannot compare your brand directly with another store’s.
- Control: high over the brand; product quality depends on the manufacturer.
- Best for: building a long-term brand, especially in consumables like cosmetics, supplements and coffee.
The four models side by side
| Dropshipping | Wholesale stock | Print on demand | Private label | |
|---|---|---|---|---|
| Upfront money | Low | Medium–high | Low | Low–high |
| Typical margin | Low–medium | Medium–high | Medium | High |
| Stock risk | None | High | None | Low–high |
| Delivery control | Low | High | Medium | Medium–high |
| Brand building | Hard | Medium | Easy | Easy |
| Workload | Marketing and service | Logistics and stock | Design and marketing | Brand and marketing |
A common path
Many successful stores start with dropshipping or print on demand to find out what sells, then move their best-sellers to wholesale stock or private label to improve margins, while keeping dropshipping for the rest of the catalogue. This keeps early risk low and lets data, not guesses, decide where to invest.
Questions to decide
- How much money can you put into the business without needing it back quickly?
- Do you have a skill to build on: design, writing, a professional network, an audience?
- How important is it for you to own a brand rather than a store?
- How much time do you want to spend on logistics?
Once you have chosen, find suppliers for your model in the Dropshipping Deal directory and follow our step-by-step launch guide.
