Both affiliate marketing and dropshipping are great ways to make money. They both make for a very effective side hustle, which may eventually lead to a business.
If you’re looking for a good business model, with a minimum amount of effort, then the affiliate model is best for you.
If you’re looking to build your own online business and brand, dropshipping will be better suited to you.
In this article, we have compiled all of the information you need for an ultimate guide to affiliate marketing vs dropshipping.
If you’re interested in getting started in either of these, read on to find out which one will make you more money!
What Is Affiliate Marketing?
Affiliate marketing is a process through which publishers can earn a commission. They earn this by promoting a product or service that is made by a different retailer.
They will make these sales using an affiliate link, and they will be rewarded for any sales made by the retailer.
In some cases, you will not only be rewarded for sales but also leads, free-trial users, and clicks to a website.
In most cases, affiliate programs are free, and there are no startup costs.
If done correctly, an effective affiliate marketing strategy can become a successful and profitable online business. They often start as a side hustle.
What Is Dropshipping?
Dropshipping is a method of order fulfillment. It means that the business in question doesn’t keep the products that it sells in stock.
Instead, the seller will purchase an inventory as it is needed, usually from a manufacturer. This will be used to fulfill any orders that are placed.
In dropshipping, the seller doesn’t own the stock. Instead, they act as a middleman between the manufacturer and the buyer.
A drop shipper is a person or business that uses this model. They buy inventory from a third party instead of shipping the products themselves.
A drop shipping operation may be managed by a group of employees or a single business owner.
Advantages Of Affiliate Marketing
Easy To Get Started
To become an affiliate marketer, you will just need to sign up for an affiliate program.
Other than this, there are no specific certifications that you need to join the program.
In lots of cases, affiliate marketers will use social media platforms or websites to promote their products.
No Customer Support Needed
When you take up affiliate marketing, you won’t need to deal with any customer support issues.
For instance, you won’t be responsible for inventory management, customer orders, or delivery processes.
You are also able to promote your products on lots of different platforms, helping you to build up an audience.
All you need to do is to encourage your target audience to buy your products.
This will allow you to focus on establishing a good promotion, rather than dealing with customer queries.
Small Start Up Expenses
When you join an affiliate program, you won’t face any upfront costs. The only expenses that you face will be the marketing costs.
Running an ad campaign may cost some money to set up.
Great Side Hustle
As you can earn money at any time from anywhere with affiliate marketing, it is a great way to generate some extra cash.
It may, after a while, earn more of a solid income. First, you can enjoy the extra income.
Finding the right platform and promotion ads for these products or services is essential.
Disadvantages Of Affiliate Marketing
Slow To Start
It will take some time to get started. To begin with, you may have to spend some money on advertising campaigns, which can cost quite a lot.
This will take away from your earnings. Some programs will only allow you to cash out when you reach a certain number of sales.
In this case, you might not be able to get paid straight away.
Don’t Control Pricing
When you promote products that are from other brands, you don’t have any control over the product or the price of the product.
Limited With Certain Companies
As you have signed up with a certain company, you may find that they restrict the way that their products are promoted.
Some companies will not allow you to promote on some social media platforms which will reduce your earning potential.
Advantages To Dropshipping
Build Your Brand
With Dropshipping, you will be able to build your brand. As you are the store owner, you will have complete control over the pricing.
This will benefit your business in the long term as you can improve customer loyalty.
High-Profit Rates
With control over the pricing of your product, you will have the chance to achieve higher profit rates.
Even when you factor in marketing costs, this can result in more income than an affiliate marketer.
If you do raise the price of the product, it is important to ensure that you have chosen a reasonable and competitive price.
Instant Payment
With drop shipping, you will get your payout as soon as the customer pays for your product. This means that as soon as you earn this money, you can withdraw it.
This will greatly improve your cash flow, meaning you will be fully in control of managing your business.
Disadvantages Of Drop Shipping
Customer Support
With the dropshipping model, you will be in charge of providing customer support to your client. This is to ensure that the order is successful.
If there are any problems with your order, it will be up to you to ensure that you chase up the order and communicate with the customer.
No Control Over Quality
You won’t have any control over the shipping service as you won’t be in charge of keeping the stock.
This can cause problems as there may be some product defects.
Many suppliers will deliver the products when it suits them, meaning your customer’s product will not always arrive on time.
Receiving complaints about this may result in poor customer reviews.
Price Competition
Lots of people are starting their dropshipping businesses because it is a very low-risk business model.
This means that the industry has become very competitive, and you may find that lots of different merchants are selling the same products as yours.
This means that you will need to keep your prices fairly low when it comes to pricing. This can result in less profits being made.
Dropshipping Vs Affiliate Marketing
Both dropshipping and affiliate marketing are great business models that allow you to make money online.
They are suitable for everyone who wants to start a new business on a limited budget. You must choose the right one for your goals and needs.
The key difference between the two is that affiliate marketing involves you promoting products from someone else’s company, whereas dropshipping lets you sell these products with your brand name.
Affiliate marketing is easier to start than dropshipping, and it doesn’t cost any money.
Dropshipping also provides higher profit margins, as you can decide your selling price. Affiliate marketing is a fixed price.
While both have a similar earning potential, dropshipping provides a more steady income.
Final Thoughts
So, there you have it! If you want a good business model, with minimum effort, then an affiliate model is the best option for you.
If you want to build an online business, dropshipping is better suited for you.
No matter which one of these you opt for, they both will need hard work to be successful. Choose carefully and get started today!
