A common debate; affiliate marketing vs dropshipping: which one is easier to start? One promotes
products you like while the other makes more money…
You will hear most entrepreneurs talk about either affiliate marketing or dropshipping. The one thing they have in common is that they help you earn money online and make profits.
In this article, you’re about to embark upon the basics. This includes the must-know details of affiliate marketing and dropshipping. Their advantages and disadvantages. And how to decide which is the better option for you.
Dropshipping
In dropshipping, you can sell products from multiple vendors. However, you share a few more advantages monetarily. For example, you get a say in the final price of the product. This influences the commission you get based on the price.
And the final cost of the product. Deciding the scope of a commission that you get from each transaction is also a factor. For example, if a merchant gives a product of $40. But you decide to sell for $50. You get to keep the $10 commission after the transaction.
Customers can keep coming back to you for more orders and transactions. There is no cap on how many products you sell from your own website. The profit is minus the wholesale price you deduct to give back to the vendor.
Dropshipping also gives you the advantage of showcasing offers and discounts. This is without any influence tempering of the merchants and vendors. This helps build a more versatile and strong online presence.
Here’s where dropshipping gets more interesting. you do not have to store any product inventory. Or be responsible for the shipping of the products you see on your website.
However, you are responsible for customer care and feedback. As customer support, you handle anything related to the store. This includes the products and services that your website provides.
Affiliate Marketing
This is very different from dropshipping in that it is an advertising model. You don’t necessarily need to have an online store on which to list a variety of products. It’s not the same as dropshipping where a customer can place an order for any particular product or service.
What you do, however, is to advertise products to help and convince customers to buy. As a result, you end up receiving commissions set by the company. This is only after the customer purchases a particular product that you marketed.
Unlike dropshipping, you do not get to set the price of the product, profit, or the commission. Affiliate marketing does not allow this. It is completely up to the terms and conditions set by the vendor. your job is to promote the product so that a customer ends up buying it.
More importantly, the similarity between dropshipping and affiliate marketing is this. You also do not have to physically store the inventory and products. You are not responsible for customer support. Your only participation is to receive the commission which is usually transacted to you on a monthly basis.
Differences between Affiliate Marketing and Dropshipping
1. Price
In dropshipping, you get to control your final price. hence influencing the commission you get after a transaction.
In affiliate marketing, you do not have a say in the final price. This depends upon the merchant or vendor that is selling the product. You’re just promoting the products.
Any offer or discount that is put is up on the vendor’s website is not under your control. As a result, the commission you receive will also be set by the company. Based on the price model drop shipping is more profitable than affiliate marketing.
2. Sales Management
Dropshipping requires you to enlist products online. If you have your own store, you can sell products that are not in your store as well. So once a sale of those “other products” happens on your website. You have to pay the manufacturer the wholesale price. This is after the customer makes a purchase from your website.
In affiliate marketing, things are not the same. You will be attracting potential customers from your website or blog. They flick through to the merchant’s online store. That is where the final sale is made. The merchant website tracks where the order was made from.
That’s where you come in, the affiliate marketer. After the customer makes a purchase on their website, you earn a commission.
3. Profitability
This is where Dropshipping beats down affiliate marketing. Dropshipping allows you versatility and growth. Customers can keep coming back to your website to make purchases.
In affiliate marketing, once you make a purchase, it’s a one-time thing. You cannot earn money independently. Your commissions depend on the company or merchant’s website. This slows down profitability. However, it improves your promotional skills.
This brings me to another important factor.
4. Control
As discussed above, you have full control of all your discounts and offers on the website. Including the final price of any given product or service.
In affiliate markets, however, you do not have control. You can’t have control over any of the above-mentioned factors. And nor do you have control over the customers that click through your link to get to the merchant’s website.
5. Future Business Plans
A dropshipping entrepreneur can undoubtedly become a fully grown business. With an online retail store that sells products and services from multiple merchants. So here, there is a business plan that you can create to move forward.
In affiliate sales, you only earn a commission if the retailer makes a sale. You cannot showcase all products like dropshipping. You only earn a commission if the product you promote gets purchased. This calls for a slow, but a potential business plan.
Final Thoughts
Dropshipping and affiliate marketing have certain advantages and disadvantages. For beginners, affiliate marketing is the perfect business plan. If you’re just starting over and need some leverage to kick-start your business goals.
However, if you do get more serious with time and potential business, you can switch to dropshipping. This would be your chance to make money faster. And build a stronger foundation for offering customers high-quality and reliable products.
The choice is yours.
Increasing earnings in dropshipping is more realistic. This is because you get to control the final price of the product. In affiliate marketing, increasing earnings means you are dependent on the retailer’s website. And whether or not the customer will click through your affiliate link to get to the product.
