I have been seeing people asking which is a better online business dropshipping or affiliate marketing, how do they compare? So let’s take a look.
What is dropshipping. According to Wikipedia hthttps://en.wikipedia.org/wiki/Drop_shipping, Drop shipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers its customer’s orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer. As in retail business, the majority of retailers make their profit on the difference between the wholesale and retail price, but some retailers earn an agreed percentage of the sales in commission, paid by the wholesaler to the retailer
Types of dropshipping
There are several types of dropshipping according to Shopify.com
Product selling: this type of dropshipping is the most popular kind, it is you source products from different suppliers and makes them available in one place.
The good thing about drop shipping you would not need a place to store the goods, everything would be done online,
You can start a dropshipping store for free, Shopify will let you have a 14 days trial and then you will have to pay at least $29 per month for the basic the $79 per month for the growing business plan and $299 per month for the advance plan
The difference between Dropshipping and Affiliate Marketing
Dropshipping is an e-commerce model where the drop shippers (you) sell items that are advertised on your store, and you pay for the items when you get paid by a customer,
You will give the merchant the customers’ shipping instructions.they will ship the item to the customer directly. But you will be the customer contact person and will be responsible for customer support,
Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts ( you will be paid a commission)
But will not be not responsible for shipping, customer support, returns, The merchant will be responsible for shipping and customer service.
Affiliate marketing and dropshipping are both legitimate methods of making money online neither of the two is better, each model suite different people. Every model has its own advantages and disadvantage.
Are the method of drawing visitors to the sites the same?
You can use paid or organic, traffic with either business but sometimes, one method may work better with one kind of business.
In doing affiliate marketing the commission paid may be small, depending on the price of the products.
So with affiliate marketing, it may be best to rely on organic traffic by writing good content and the proper use of SEO. You can be taught this at WEALTHY AFFILIATE and you can join for free.
With drop shipping, you will have a higher profit margin you will able to use paid advertising. However, you can still use Content and SEO to drive traffic to your store.
In my opinion, Free traffic (content writing) is better for Affiliate marketing and I think you will do better with paid Advertising with dropshipping.
The free traffic with affiliate marketing does take you longer to realize success but be consistent in producing good content and you will see success.
With Affiliate the cost is very low, Yes, you need to pay for the training and for the web hosting and tools, but there are platforms that offer this for free.
Wealthy Affiliate is the best one, with a free membership you not only get 10 lessons but there is no cost for Webhosting building your website you will need to buy your domain name for about $13 per year.
With dropshipping, you need to pay for these as well, in addition to paying for the paid traffic.
Cost of maintenance.
With affiliate marketing using traffic, and if you use Wealthy Affiliate you will have your business running for years at no cost. And the free membership has no expiration date.
While with dropshipping through paid ads, you need to continuously pay for ads and for fulfilling the orders.but after you start seeing a profit it should become much easier to find the cost of keeping your dropshipping business running.
Can a passive income be achieved with either?
Affiliate marketing is the most passive online business model, compared to other methods, including drop shipping. The main reason for that is that your main job is to promote the products to people, but after they purchase, your role ends.
With dropshipping, in addition to customizing your online store and editing the product page when an order is made, there are several things you need to do, you will now need to
Fulfill the orders once they are placed (At least within 24-48 hours)
Track the shipping & delivery until the ordered items arrive at the buyer’s address.
Deal with all the customer support requirement including:
- Sending the tracking information to the customer
- Answering specific questions about the products
- Dealing with complaints, returns, and refunds
Managing the paid ads continuously
Testing more products on a regular basis to find winning ones
Because affiliate marketing requires fewer activities to be done by you this makes it more passive than dropshipping as you can leave your business for a couple of days or weeks without a significant effect on revenue. You can get a commission from an article in a blog years after a blog is posted
While you can’t leave your dropshipping business for more than a couple of days as you need to fulfill the orders as soon as they come in so your customers will receive their purchases as soon as possible.
And in time you may be able to hire others to do some of the tasks for you, but you will need to manage your employees and mostly, you need to tackle the paid ads by yourself.
Dropshipping can make you more money now through spending more on ads, but affiliate marketing can make you more money in the long run without paying for adds
Can Affiliate Marketing and Dropshipping be Combined?
You can combine the two models, dropshipping and affiliate marketing, right from the beginning, or even if you already have an established business in one of the two methods in order to make the most out of your efforts.
Here’s how you combine dropshipping and affiliate marketing together:
- You can create blog posts and recommend products as an affiliate through those posts. Also, you can promote affiliate products through email marketing to people who already purchased from your store and joined your email list.
- If you have an affiliate marketing website, then you can see what products get the more sales through your website, find good suppliers for those products at low prices, and start selling them as a drop shipper and enjoy a higher margin than the commission you get as an affiliate.
It would be best to use the same platform for both your Affiliate marketing and drop shipping sites.
You can also create a complete store using Shopify, list the product you want to sell there, and start sending people from the affiliate website to the dropshipping store instead of selling them to the affiliate product.
Dropshipping Vs. Affiliate Marketing: Which is better?
Both are great methods that are good for making money online. Affiliate marketing through blogging and free traffic is better in terms of the cost, and it is less stressful and this makes it easier to manage.
But Affiliate Marketing does take a bit longer time before you will see any meaningful results,so you will need to be patient.
Wealthy Affiliate is the best platform for training in affiliate marketing, you are given step by step instructions by the means of videos, you can go at your own pace and you can start for free.
With drop shipping, you should see results faster but this requires lots of continuous work and some monetary investment for advertising
Shopify is a very good place to have your drop shopping business and they do offer assistance in setting up your business and if you need training. And https://www.udemy.com/topic/Shopify/? Offers dropshipping training.
I appreciate you stopping by, thank you for your time, I look forward to your comments and questions and I do reply ASAP, hope you found this post informative please share.
NOTE: This post includes affiliate links, which, if clicked on and a product purchased, I get a small commission (with no increase in cost to you)