Let’s take a deep dive into the topic: Affiliate marketing vs. dropshipping. If somebody wishes to make money online, one of the first things they will do will be to consider the various options they have available.
Perhaps the most popular options are affiliate marketing and dropshipping.
Both of these ways are in which a person can make money from somebody else’s products, but both have differences.
Here, the two of these will be compared to see which is the best money-making option for you.
Affiliate marketing is easily one of the most popular methods when it comes to making money online.
With affiliate marketing, a person will be promoting products on behalf of another company.
If they sell, then a commission will be collected. It is a ridiculously simple way to make money, and the business can be scaled up.
In fact, it can be scaled so well that there are affiliates earning millions per year.
Sure. A person will unlikely ever hit millions, but it can certainly amount to job-replacing income.
Competition in affiliate marketing is high, however. It is often the first way that people make money online, which means that there are a lot of websites out there.
It is likely people have stumbled across an affiliate marketing website before.
If they land on a website with Amazon reviews and links, this is likely an example of an affiliate marketing website.
Finding a Niche
It can be ridiculously tough to find a niche that isn’t crowded.
That being said, there are now more ways than ever before to promote products.
Gone are the days when SEO was the only way to drive traffic to a website.
Somebody could start up an affiliate site today, promote it via paid ads or social media, and then make money tomorrow.
The biggest pro of affiliate marketing is that there is probably a product to promote in almost every single niche imaginable.
It doesn’t take too long to hunt them down, either.
For example, for physical products, there is Amazon Associates.
For digital products, a person may want to check out sites like Commission Junction or Clickbank.
Many affiliates will create several different websites promoting different products and through different affiliate networks.
This means they will not put all their eggs in one basket.
Affiliate Marketing Competiton
It can be tough to break through with affiliate marketing, however. As mentioned previously, most niches are crowded, making SEO difficult.
However, good quality content and building up a reputation in a niche can go a long way towards making a lot of money online.
The best way to get started is to find a niche that isn’t too competitive but still gets search queries.
Using a keyword tool to do research is your first step, and you can do this for free using the Google Adwords tool.
There are paid options, such as Ahrefs and Keywords Everywhere, which will give you better results.
It should be remembered that affiliate marketing can take months to see a return on investment, and that is only if the right niche is selected.
Many people will need to work their way through several different niches to find one that suits their needs.
This is why it’s important to pick a niche that you are actually interested in because it just makes the whole affiliate marketing process a whole lot more enjoyable and easier.
Think of it this way: if you love what you do, you will tend to stick around for the long haul as an affiliate marketer and eventually build yourself the business of your dreams.
You will also eventually be able to generate a lot more money online if you are interested in the products and topics you are discussing and promoting as an affiliate marketer.
Work doesn’t really seem like work when you actually enjoy what you are doing.
Dropshipping VS Affiliate Marketing
When we look at dropshipping vs affiliate marketing, dropshipping is ‘roughly’ the same.
With dropshipping, a person will be collecting a commission on a product sold and advertising products on behalf of somebody else… although, this is not quite the full story.
Dropshipping is very much eCommerce. A person will sign up for an ecom solution such as Shopify, get a domain name, and build out their store.
They will then add products and when a product sells, the supplier is notified and the order is dispatched.
The dropshipper or supplier in this case, will essentially act as a warehouse and handle all the shipping.
The retailer (you) will not keep any products in stock. The system can be partially automated, but good customer support is essential for the longevity and reputation of the business.
Making money through dropshipping is essentially done the same way as making money through affiliate marketing.
This means promoting the website through whatever means necessary e.g., SEO, social media, paid ads, etc. This does take a lot of work, however.
That being said, once a company gains a reputation and its brand is recognizable, five or 6-figure months are possible with this business model.
Starting a dropshipping store can prove to be lucrative, although profit margins are usually around 20-30%.
This is because one will have to account for advertisements, platform costs, any outsourcing help, chargebacks, and so on.
Since the initial days of running an eCommerce site will essentially be earning very little or just breaking even, this will be a dead cost for the first month or so until that “winning” product is found.
So, it is a business model that will suit people who have a bit more money to spend on building up their business.
For those with a daily budget of at least $20 to test products on, it could be for them.
This is another great source of information about dropshipping.
If you want to learn more about the dropshipping business model and get answers to every question that you may have about dropshipping in general, this link is helpful. Titled The webs most searched questions on dropshipping
Perhaps the most popular options are affiliate marketing and dropshipping.
Let’s dive deep into the world of Affiliate Marketing and Dropshipping, two popular online business models.
I’ll outline their benefits and drawbacks and then give my opinion on which model suits which kind of entrepreneur.
Affiliate Marketing Vs Dropshipping
- Low Startup Costs: You don’t need to invest in inventory or worry about overhead costs.
- Passive Income Potential: Once your affiliate links are set up, they can generate income around the clock.
- No Customer Service Hassles: You’re not responsible for handling customer complaints or returns.
- Flexibility: Work from anywhere, anytime, as long as you have an internet connection.
- Wide Range of Products: You can choose products from countless niches to promote.
- Dependency on Third Parties: Your earnings depend on the affiliate program’s terms and conditions.
- No Control Over Competition: The market can be saturated, making it hard to stand out.
- Income Can Be Unpredictable: Earnings fluctuate based on traffic and conversion rates.
- SEO and Content Creation is Key: Requires strong skills in content creation and SEO to drive traffic.
Affiliate Marketing VS Dropshipping Benefits
- E-Commerce Store Ownership: You have more control over your store, branding, and customer experience.
- Higher Profit Margins: Potential for higher earnings per sale compared to affiliate marketing.
- Scalability: Easy to scale by adding more products and suppliers.
- Data Access: Direct access to customer data for future marketing and sales strategies.
Affiliate Marketing VS Dropshipping Drawbacks
- Customer Service Responsibilities: Handling returns, complaints, and other customer service issues.
- Reliance on Suppliers: Dependent on suppliers for inventory and shipping, which can be unpredictable.
- Lower Control Over Inventory: Risk of stock shortages or delays from suppliers.
- Initial Investment: Requires more upfront investment in setting up a store and marketing.
My Opinion on Which Model Is Right for Whom
- Affiliate Marketing: Ideal for individuals who excel in content creation, SEO, and social media marketing. Perfect for those who prefer a hands-off approach regarding inventory and customer service. It’s best suited for bloggers, YouTubers, and social media influencers who can leverage their audience.
- Dropshipping: Great for entrepreneurs who want more control over their business, from branding to customer experience. It’s suited for those who are willing to handle the complexities of e-commerce, including customer service and relationship management with suppliers. Ideal for those with a bit of startup capital and a strong interest in e-commerce operations.
Useful Comparison Table
|Medium to High
|Control Over Branding
|Skill Set Required
|SEO, Content Creation
|E-commerce, Customer Service
Affiliate Marketing Verse Dropshipping: So, What Business Model Should You Choose? My Personal Final Conclusion
Honestly, it completely depends on which model gels better with a person.
Some people will love affiliate marketing and the freedom to promote just about any product they desire, while others prefer the more ‘eCommerce’ approach and go down the dropshipping route.
Both are competitive markets, but when done right, both of them are viable ways to make money.
Affiliate marketing takes more time to get going, but the income becomes “passive”.
With dropshipping there is more of a hands-on approach because you’ll have to keep on top of your ads, maintain customer service and work with your suppliers to have your products shipped.
Whichever you choose, the important thing to remember is persistence.
Both of these business models have been proven to work, but the reality is only a small number of people are successful.
The commonality with these people is that they stuck it out, and didn’t get affected by bumps in the road along the way.
If you have already chosen 1 of these 2 routes of proven business models to make money online affiliate marketing or dropshipping.
Great, we would love to hear your thoughts!
Which business model did you choose? Affiliate marketing? Dropshipping? Or both?
In the comments section below, let us know your thoughts on these two proven ways to build a business online.