The industry and its drivers
As we all know, over the past few years, the Print On Demand (POD) Industry has seen remarkable transformations. The POD market has continued to expand globally, embracing sustainability practices, and integrating cutting-edge technologies to streamline operations. While product customisation remains a driving force in the market, customer expectations for faster shipping and a broader product range have intensified.
The market potential of the industry remains strong. In 2020, the global print-on- demand market was estimated to be worth around $11.5 billion. The market is expected to grow at a compound annual growth rate (CAGR) of around 9% from 2021 to 2028 (source: Statista and Grand View Research). The main Product Categories remain Apparel, including Custom t-shirts, accounting for a significant portion of POD sales, followed by Home Decor, Accessories, and Promotional products.
We are seeing deeper e-commerce Integration: a growing number of e-commerce platforms, such as Shopify, WooCommerce, and Etsy, integrated with POD services, making it easier for entrepreneurs to start their custom product businesses.
Customisation remains key with personalised and custom-designed products continuing to gain popularity, with consumers seeking unique items that reflect their individuality.
We are also seeing the market becoming global: the POD market is increasingly expanding globally, with businesses collaborating with printing companies in different countries to offer international shipping options. Furthermore, Sustainability becomes a significant concern, with some POD businesses adopting eco-friendly practices, such as using organic and sustainable materials and offering carbon-neutral shipping options. This leads the POD market to become highly competitive, with numerous new entrants and established players vying for market share. Consumers are increasingly favouring brands that offer fast and affordable shipping options. The COVID-19 pandemic drove a surge in online shopping, benefiting the POD industry as more people turned to e- commerce for custom products.
Moreover, automation and technology solutions have become more prevalent in the industry, streamlining order processing and production management.
Industry Challenges
The print-on-demand (POD) marketplace has been experiencing several challenges.
- Quality Control: maintaining consistent print and product quality across various suppliers and production facilities is challenging. POD platforms often rely on a network of third-party printers, making it essential to ensure that the final product meets customer expectations. Customers have found that at times the quality (blank quality, print quality etc) has not been at the level expected. Some Print on Demand companies have seen their NPS (Net Promoter Scores) drop which might indicate that the overall quality has been further challenged due to cost pressures. This unfortunately impacted loyalty and top line revenue due to a backward trend on repeat purchase.
- Shipping Costs and Times: Customers increasingly expect faster and cheaper shipping options. POD businesses must find ways to offer competitive shipping rates and delivery times while keeping production costs in check. Recent focus on margins and production costs has also impacted delivery times. This unfortunately impacted loyalty and top line revenue.
- Product Diversification: Expanding product offerings beyond basic items like t- shirts and mugs can be difficult. Introducing new products often involves finding reliable suppliers and ensuring that the quality and customization options meet customer demands. Furthermore, Product diversification ties to an SEO strategy (google search) and is an active part of generating top line revenue for POD marketplaces. The lack of Physical Product Expansion has impacted top line revenue growth due to reduced offering.
- Third Party Printers financial stability: Mostly all print production companies are privately owned without full transparency on their financials. Some of them have experienced financial difficulties over the years. Some of them have been acquired. This has created stress in the supply chains leading to disruptions of service. Technology Platforms have the experience and the knowledge about the sustainability of those printer companies and are a good partner technology to leverage.
- Intellectual Property Concerns: Navigating copyright and trademark issues can be a significant challenge in the POD industry. Ensuring that designs and content used on printed products are legally sourced is crucial to avoid legal disputes. This has limited the supply of “printable content” and impacted top line revenue.
- Artists or Designers content: The POD market has become increasingly crowded with artists and designers whose artworks are being harder to find. Also Print on Demand Marketplaces have made the Designers participate more to the costs of running their business. This has resulted in artists doing their own storefronts and a loss of content for the e-retailers which then impacted revenue due to less appealing content.
- Competition: The POD market has become increasingly crowded, making it harder for new entrants to gain traction. Established players and larger e-commerce platforms also pose significant competition. This has unfortunately impacted market share for its player and reduced top line revenue and created price pressures impacting margins.
- Customer Service: Managing customer inquiries, returns, and complaints can be demanding, particularly for smaller POD businesses. Offering excellent customer service is crucial for building a positive reputation. We have seen in the industry a severe impact on response times and ability to provide responses in language which are key factors to drive loyalty and growth.
- Sustainability: Consumers are becoming more environmentally conscious, and there’s growing pressure on businesses to adopt eco-friendly practices. This includes using sustainable materials, reducing waste, and minimising the carbon footprint associated with production and shipping. Cost pressures are implying costs take forefront on the fulfillment algorithms at the expense of carbon footprint considerations due to a lack of access to additional sources of fulfillment.
- Marketing and Branding: Standing out in a crowded market requires effective marketing and branding efforts. Many POD businesses struggle with marketing strategies to attract and retain customers. Costs are high to acquire new customers.
- Technology and Automation: Keeping up with the latest technology and automation tools can be a challenge, particularly for smaller POD businesses. Automation can help streamline operations and reduce costs but implementing it effectively can be complex. Engineering teams that spend their time and efforts enabling supply chain solutions aren’t able to work on user loyalty projects, which impacts sales growth.
- Global Expansion: Expanding into international markets can bring new opportunities but also entails overcoming logistical and regulatory hurdles, including dealing with currency exchange rates, customs, and international shipping complexities. The lack of global expansion has impacted the ability to grow revenue through new markets and new content.
- Data Security and Privacy: Handling customer data and payment information requires robust security measures to protect against data breaches and cyberattacks.
- Supply Chain Disruptions: Events like the COVID-19 pandemic have highlighted the vulnerabilities in global supply chains. POD businesses need to be resilient in the face of disruptions that may impact their ability to fulfill orders.
The print on demand (POD) marketplace has experienced remarkable growth over the years, reshaping the way custom-printed products are created, marketed, and delivered to customers given the more recent challenges faced.
One critical aspect of this industry’s success is the evolution of supply chains. From its humble beginnings as a niche market to becoming a prominent player in the e- commerce landscape, the POD supply chain has undergone significant changes. In this next paragraph, we will explore the evolution of supply chains in the Print on Demand space.
Evolution of Supply Chains
- The Early Days: A Fragmented Landscape
In its nascent stages, the POD marketplace was characterised by a fragmented supply chain. Third Party Printers and entrepreneurs often operated independently or through small, localised print shops. This fragmentation limited scalability, product diversity, and geographic reach. Customers faced longer delivery times and limited customisation options. - The Rise of Digital Printing
The emergence of digital printing technology was a game-changer for the POD industry. Unlike traditional methods like screen printing, digital printing allowed for high-quality, cost-effective, and on-demand production. This innovation enabled POD businesses to expand their product offerings and cater to a broader customer base. It also reduced the need for large inventories, making supply chains more agile. - Integration with E-commerce Platforms
As e-commerce platforms gained popularity, POD businesses began integrating with online marketplaces and website builders. This shift transformed supply chains by enabling seamless order processing and fulfillment. Through application programming interfaces (APIs), customers could design and order custom products directly from e- commerce websites, triggering automatic production and shipping processes. - Globalization and Diversification
The growth of e-commerce and advancements in logistics facilitated the globalisation of the POD supply chain. Businesses started partnering with printing facilities worldwide, allowing them to offer international shipping options. Diversification of product offerings also became a trend, with businesses expanding beyond apparel to include items like home decor, accessories, and promotional materials. - Just-in-Time Manufacturing
The POD supply chain has also embraced the principles of just-in-time (JIT) manufacturing. JIT allows businesses to produce products only when there is demand, reducing excess inventory and storage costs. This lean approach improves overall supply chain efficiency while minimising waste and environmental impact—a critical consideration in today’s sustainability-conscious world. - Automation and Technology
Automation has played a pivotal role in the evolution of the POD supply chain. Businesses have adopted technology solutions that automate order processing, artwork preparation, and production management. These advancements not only enhance efficiency but also reduce human errors and lead times. - Sustainability Initiatives
As environmental concerns mount, many POD businesses are taking steps to make their supply chains more sustainable. This includes using eco-friendly printing materials, minimising waste, and exploring carbon-neutral shipping options. Sustainability initiatives are increasingly becoming a competitive advantage in the POD marketplace.
Likely Future Implications for the Industry and the Supply Chain: The Role of Print-on-Demand
Supply Chain Technology Platforms
We do expect to see a rise in the use and access of Print on Demand Supply Chain Platforms.
Print-on-demand Technology platforms emerged to streamline the supply chain further. These platforms serve as enablers, connecting POD businesses with a network of trusted printing partners. They offer centralised order management, production tracking, and quality control services. This approach minimises the risks associated with print quality and shipping reliability, creating a more consistent customer experience.
The approach to the supply chain is clearly evolving. By taking a technology platform standpoint, supply chains can evolve in a sustainable and optimised manner. This comes in contrast to a traditional approach that adds a technology layer to a fulfillment network. As an analogy, this is similar to the value of a CRM software that works for the sales team as opposed to a layer of technology added to a sales pipeline.
Furthermore, technology platforms are ready to plug in AI capabilities while traditional fulfillment algorithms can not scale to.
Those technology platforms allow POD e-retailers and marketplaces to focus on their core skill sets and core value propositions. Demand generation and content generation are the core values, not the supply chain with the following benefits:
- Order Flow Management
- Adaptive Order Routing Logic
- Managed, vetted global Fulfillment network
- Global Logistics through all major carriers
- Vast Merchandise library
- Product Sourcing capabilities
- Quality/Global Compliance
- 360-degree view dashboards for internal team
- Shift massive overhead costs from e-retailers and marketplaces (personnel costs, systems, engineering support)
- Provides more consistency in quality control and sustainability due to scale
- Ability for the POD supply chain platform to negotiate better costs
- Immediately provides access to a broader range of physical products and categories (increased revenue, increased SEO)
- Immediately provides access to a broader range of geographies (increased market access)
- Reduction in Carbon Footprint
Benefits and Implications for leaders strategic thinking in this space
For the CEOs/boards:
- Enable their teams to more quickly reach their goals by reducing the friction of experimentation, and eliminating the cost of growth
- Allow their supply chain teams to seamlessly scale while staying true the core value propositions for your business (value, customer acquisition, trends, artists, etc)
- Support their teams in achieving the impossible tasks needed to quickly grow by arming them with tools that expand to fill any gaps
- Future-proof their business, strategically position their company to thrive during an economic recovery while capitalizing on cost efficiencies to improve profitability in the present
- Mitigate their risk if a node goes down, a key leader leaves, a major supplier goes under, etc, Insurance for worst case scenarios
For Supply Chain leaders:
- Prioritized support from a dedicated team focused on Engineering, order routing, quality, etc- key value prop of partnering with a third-party technology provider
- Direct control on logic used for order fulfillment, manage dynamically throughout the year
- Scale up or down based on demand, support existing team to be more efficient
- Test new products or markets through existing fulfiller network
Conclusion
The Print on Demand Marketplace has come a long way from its fragmented beginnings. The evolution of its supply chain, driven by technological advancements, globalization, and a focus on customer experience, has transformed it into a thriving industry. As POD businesses continue to innovate, adapt, and adopt sustainable practices, the future looks promising for both entrepreneurs and customers seeking personalized, on-demand products.
About the Author
Arnaud Deshais is Chief Executive Officer at Caravella Consulting. Being of service as a Consultant to Industry Leaders for the main actors in the Print of Demand Industry for the last 3 years, I believe it would be useful to share my thoughts as to where I see this industry moving towards, and my views on the implications for the evolution of its Supply Chain Technology and Innovation.