With ecommerce at an all-time high, it seems that everyone is looking for a way to make some money online. Affiliate marketing and dropshipping are two of the most popular and successful business models for doing just that. That’s why we move to compare affiliate marketing vs dropshipping to help you decide which one to pursue.
Dropshipping vs Affiliate Marketing — What’s the Difference?
Dropshipping is a business model that allows you to run an ecommerce store without keeping any inventory. All you need to start affiliate dropshipping is a website and a supplier. When customers order items from your online shop, you just contact your supplier, and they take care of the rest.
Affiliate marketing meanwhile is a performance-based advertising model in which marketers get paid a commission for every sale they generate. You can join one or more affiliate marketing programs and get links that you can publish on your blog or social media platforms. You will earn every time a purchase is completed through your links.
While both affiliate marketing and dropshipping rely on promoting and selling products online, there are a few considerable differences between them.
Affiliate marketers worry about creating engaging content and driving traffic to their platform more than anything else. They don’t interact with their audience in the same “face-to-face” manner as dropshippers, so they are free from providing customer support.
Running a dropshipping affiliate program, on the other hand, is all about the customer experience. Consumers use dropshipping services because they do the legwork for them. Instead of wasting time on research and filtering out thousands of items, dropshipping websites give them a clear view of the best products at a glance.
To provide such an experience, dropshippers have to make their websites as user-friendly as possible, and that requires a considerable amount of work.
Affiliate vs Dropshipping — The Pros and Cons of Each Model
If you are not sure if you should start a dropshipping or affiliate marketing business, it is a good idea to consider the benefits and disadvantages of the two. Here is a quick summary:
Affiliate Marketing Pros:
- You can get started with affiliate marketing with no money.
- There are affiliate programs available for almost every niche, so you can choose what you want to promote.
- Since they are free to join, you can be an affiliate of multiple programs.
- You don’t worry about supply or customer support.
- Once you do the hardest part, you can generate passive income with minimum effort.
Affiliate Marketing Cons:
- It is a very competitive market.
- You are at the mercy of the company you promote, and it controls the prices, commissions, payouts, etc.
- You can’t set your own profit margin.
Dropshipping Pros:
- As a dropshipping affiliate, you would practically be running your own store without worrying about supply and storage.
- You set the price and the profit margins.
- You gain valuable insight into what products sell best in case you want to open an actual store one day.
- It is low risk, making it ideal for beginners that want to learn more about ecommerce.
- The dropshipping market is considerably less competitive than affiliate marketing.
Dropshipping Cons:
- You need to have some capital to start an affiliate dropshipping business.
- Dropshippers have no control over the quality of the product, its packaging, or delivery time but still have to deal with customer complaints and returns.
- The dropshipping business heavily relies on the supplier, so you need to find a responsible one.
Dropshipping vs Affiliate Marketing — What Is More Profitable?
Now that we know more about the two business models and their advantages, we can compare affiliate marketing vs dropshipping in terms of profitability.
Supposing that one is more profitable than the other would be a fallacy because various factors decide dropshipping and affiliate marketing salaries. Different circumstances like your marketing skills, the niche you are competing in, and how much effort you put into your work all play a role.
In theory, dropshipping seems like the more profitable business because it allows you to set prices and decide profit margins. Most affiliate commissions vary between 3% and 10%, while it’s not uncommon for dropshippers to turn in 15% and even 20% profits per sale. Digital goods are a notable exception since they can bring up to 50% profits to affiliate marketers.
However, generating more revenue doesn’t automatically mean larger profits. There are plenty of costs exclusive to dropshipping you have to consider, like supplier fees and refunds.
All in all, starting a dropshipping or affiliate marketing business is a good idea either way. As long as you have a good strategy, both models can be hugely profitable.
Dropship vs Affiliate Marketing — Which One Is Easier?
While their income potentials are very high, you can expect a rough start, whether you decide to go for affiliate marketing or dropshipping. In both cases, you will need to work hard to establish your place on the market and stand out from the competition. It is not unusual to not see any profits during the initial few months for any online job.
To be fair, affiliate marketing tends to get easier over time when you already have plenty of content created. There are ways you can turn dropshipping into a passive income as well, but it requires subscribing to SaaS tools and integrations and outsourcing customer support.
Ultimately, both dropshipping and affiliate marketing can become almost completely hands-off business models once you get them going. This is why it’s possible for many ambitious influencers to take a combined approach and utilize both models to maximize their income.
Dropshipping vs Affiliate Marketing — Which One Is Better for You?
In the end, it all comes down to your preference and talents. Dropshipping and affiliate marketing are two of the best ways to make money online, and you can’t go wrong with either one, as long as you choose it for the right reasons.
You shouldn’t pick a business model based on what the internet says about its profitability or how easy it is to get it started. Instead, you should go for the one you think you will enjoy more and as a result, you will be more successful.
If you prefer working alone and creating engaging content is your passion, you can make affiliate marketing truly worth it. In contrast, dropshipping is more suitable for people that don’t mind interacting with their customers and thrive in providing exceptional customer support.Now that we compared affiliate marketing vs dropshipping, you should have a clearer picture of which one is more suitable for you and will make the right decision.
