Trying to pit drop shipping vs affiliate marketing? Want to establish which model is the best business model for you? Well, you can find out all of the answers right here on this page. The route to go down may actually end up surprising you.
Drop-shipping vs Affiliate Marketing
In this section, we are going to give you a very, very quick overview of the comparisons between drop-shipping and affiliate marketing. We hope that by giving you the pros and cons, you can make a more informed decision as to which business method is right for you. In most cases, this is probably going to be drop-shipping, but it is still worth reading through this list.
- Cheap to get started. No cost for inventory.
- A business model where you have a relationship with your customers. This increases opportunities to make sales later on down the line.
- It is up to you to convert people to purchase. This means you have more of an opportunity to get people to part with their cash.
- It can generate a lot of money.
- Drop-shipping is easy to learn, and business can easily be scaled up.
- Lots of competition
- Difficult to find reputable suppliers to work with.
- eCommerce advertising can be expensive
- Industry changes rapidly, which needs constant tinkering of your plans
- You need a website.
Affiliate Marketing Pros:
- Cheap to get started
- No website required
- Lots of affiliate marketing programs you can join
- Cheaper to gain traffic than eCommerce
- Can make a lot of money
Affiliate Marketing Cons:
- Cannot build up a direct relationship with your customers.
- Lots of competition
- Tough to get ‘big’.
- Need a constant source of new traffic
- Lets profitable than drop-shipping
What is Drop-shipping?
Drop-shipping is an e-commerce business model. With a drop-shipping business, you are selling physical products direct to customers. The difference with a normal e-commerce business? Well, with drop-shipping, you are not holding any products in stock. You do not need to do so. With drop-shipping, a customer can place an order with you. You can then zip on over to the drop-shipping warehouse you are working with (you will probably work with several), pay for the product, and that company will send the items directly to your customer. You are really just the ‘middle man’. If you want to find out more about drop-shipping, and discover what it actually entails, then head on over to our ‘what is drop-shipping’ article.
Is Now a Good Time to Start Drop-shipping?
Absolutely! As we write this, we are in the midst of a pandemic. Jobs are being lost around the globe and those that are able to keep their jobs are looking for some sort of side hustle to boost the amount of income they are making. Not to mention the fact that a lot of people can only buy products online nowadays. It can reasonably be argued that this is probably one of the best times ever to start a drop-shipping business.
Remember; getting started in drop-shipping is not that expensive. All you really need to begin a drop-shipping business is a website. You can invest in some advertising, but even that is not necessary if you can get traffic from other sources. That is it. It really is a fabulous way to make money with very little cash outlay on your part which is, of course, something that you may not have if you have been caught up in the pandemic job losses.
So, what is affiliate marketing? Well, it is a different business model to drop-shipping in many ways. With affiliate marketing, you do not run an e-commerce store. You do not have any links with drop-shipping warehouses or anything like that. Instead, you promote links for people. If your link promotion turns into a sale for a store, then you can collect a commission on it. You do not build up a relationship with a customer. Instead, you are drawing somebody in with content or newsletters. You then tell them about something awesome they can buy, and then they head on over to an actual eCommerce website to pick up the digital or physical product. There are a lot of affiliate marketing programs out there, which means you shouldn’t really have any shortage of products to promote. In fact, if you can name a product, there are probably countless affiliate marketing programs that allow you to promote it.
Affiliate marketing is easy to get into. You could start up a website right now, post a couple of links, and make money pretty soon after. Not huge amounts, but if you source traffic in the right places, you can make money fast. For the long term, however, it does take a while to build up the same amount of income.
Affiliate marketing also has the opportunity to deliver a rather sizeable amount of income when it is done properly. It can be an easy business to scale up once you have found a method of promotion that works for you. However, finding that method that works can be a difficult proposition.
The major con with affiliate marketing is that you tend not to build up a relationship with the traffic that you gain. After all, your aim is to shuttle them off to a different website almost as soon as they have arrived. This means that if you want to continue to make money, you will need to keep getting more and more traffic. This is a massive comparison to drop-shipping where, if you do a good job, the same customers will keep returning.
In the world of affiliate marketing, there is a lot of competition too. While, with drop-shipping, it can be easy to stand out from the crowd, even when you are all selling the same products, this is going to be nigh on impossible with affiliate marketing. Everybody is promoting the same products in the same way. This means that you need to either find an untapped niche (pretty hard) or get lucky if you want to make a ton of cash.
Generally speaking, commissions are going to be a lot lower than they would be in drop-shipping too. This means that you need even more traffic to earn the same amount of income that drop-shipping does. Basically, it is expensive.
If you want a business model that is cheap, but also offers a huge amount of potential, then drop-shipping is always going to be the way to go. Affiliate marketing is for those who want smaller gains in cash, and a more ‘hands-off’ approach to running their business.