Since the evolution of the internet, there are dozens of ways to make money online and earn a living for life.
Today, earning six figures of income is not a dream. You can literally sit at home, work in your pajamas and earn the same and sometimes more money compared to what get from working full-time in a multinational company.
Affiliate Marketing and Dropshipping are the two great options that can give you your dream life if you can master any one of them. Usually, people get confused between these two income streams and also consider them similar or interrelated.
However, both the platforms are exclusive and share significant difference, advantages, and disadvantages that make them unique.
Here are the difference between Dropshipping and Affiliate Marketing and how to choose which one is better the better platform for you to earn online.
Both have a different way of style of working
In dropshipping, users come to buy products. They enter their details and make a payment on your website. Then, you contact the manufacturer of the product, forward them the address of the customer.
The manufacturers deliver the product, and you pay the cost price of the products to them.
While in affiliate marketing your work is similar to a salesperson. Instead of going door to door sales, you suggest people purchase specific products from your link, and for every successful purchase, you get a decided commission.
Customer interactions are different.
In dropshipping, users only know your website, and for them, you are the manufacturer of the product, so you have to attend them accordingly.
The responsibility of customer support must be managed by you regularly to solve their tickets and give them solutions.
In Affiliate marketing, you are not responsible for anything that happens after the user purchases the product. Since they are redirected to the manufacturer’s website directly, you are no longer accountable for the type of consumer support they get from the manufacturer.
Dropshipping generates ROI quickly
Dropshipping has a quick rate of delivering results. As soon as you start promoting your products through social media marketing, you can generate sales instantly.
However, you need to have an experience with social media ads and understand buyer persona to target the right customers. That said, you will get the ROI compared to affiliate marketing.
Affiliate marketing is comparatively slower. You will have to put a lot of effort and promote your website through various online marketing streams to make After all these; you will get a fixed amount for the same.
Unique business model
Dropshipping gives you the most flexibility in deciding the profit margins. As you are selling the products as your own, you can determine your custom price. Nobody can question your choice of the retail price.
So, the profit you get is the difference between what buyers pay you minus what you pay to the manufacturer. However, there are many added costs that you have to bear like website maintenance, advertising, and promotional expenses, etc.
Although in Affiliate marketing too, you will have to bear the website cost, content generation, etc. However, the commission already decided between you, as an affiliate, and the manufacturer.
The total amount you will get is equal to the number of products you sold multiplied by a commission of one product. You cannot decide how much you charge for every successful sale.
Different style of business
Once you deliver a few successful orders, your online store would be the favorite place to purchase specific products. Hence, you would get recurring customers in dropshipping, and for every purchase, you get custom profits.
In Affiliate marketing, there are fewer chances of generating recurring income unless you get an excellent product which nobody else is selling at a lower price compared to you.
However, once your website starts receiving unique and relevant traffic, affiliate marketing will give you six figures income in auto mode.
While maintaining a dropshipping business, you get consumer details like email address, phone number, name, address, country, etc because users would purchase the products from just like any other eCommerce store.
In Affiliate marketing, your visitors would click your affiliate link, and you won’t be involved in the purchasing process so you will not be dealing with customers through affiliate marketing.
You have no attachment with who purchased the products from your link. In the end, a number of conversion matters.
Different Path for Business
In the long run, you would have an established online store that would be thriving and generating many sales in a day. So, you can have a mainstream business for you down the line.
In Affiliate marketing, you are dependent on the brand whose products you are promoting, but if you find the ideal product, you can generate excellent side income for yourself.
Advantages and Disadvantages of Dropshipping
- Initial low investment
You can start your dropshipping business by investing a little in the beginning. There would be no hassle of managing inventory or managing the human resource for such complex tasks. You can work alone.
- Increase the consumer base
As you own the online store, you can introduce new products to your website to expand your consumer reach. You can also maintain the regular flow of your consumers for the other products. This way, you would grow your business exponentially from a single website.
- Virtual unlimited inventory
As you deal with the manufacturers and host none inventory for your dropshipping business, your products will never go out of stock. You can maintain the continuous flow of sales and forward the buyer details to the manufacturer directly.
- Productive work-life balance
In dropshipping, you are your boss. You have nobody to report your work or show your output for promotion. The more work you put, the better the returns you will get. Also, there are no fixed hours of work you have to provide.
- Manage your business from anywhere
For managing the orders, all you need is a laptop or desktop and a stable internet connection. You can work from anywhere, anytime as per your convenience.
- Tackle with unreliable sellers
Even though you have an excellent product for your business and can promote it and bring customer details, but you have to trust the manufacturer about the quality of packing and to deliver the product.
Since you no longer interfere in any of the packagings and couriering the product, you cannot ensure that the users receive the premium quality product at their doorstep.
- The sudden increase in consumer support
Your website would have to take the burden of attending after sales services. You need to visit the tickets of the users, solve their problems and so on. Once you increase the number of products on your website, be prepared to interact in a different type of customers and solve their queries.
- International shipping will take weeks
If you are dealing with foreign sellers and the buyers reside at a different geographical location, then the buyers have to wait for a few weeks to get their products. It might take up to 30-40 days to reach the products to the desired address.
- Takes time to generate revenue
Once you make your store live on the web, you need to put much effort into promoting and advertising products and eventually convert your visitors into buyers. Investing funds, time, resource and then you can expect to have results for your efforts.
Advantages and Disadvantages of Affiliate Marketing
- It’s a low-cost business
Affiliate marketing would require less amount of money to set up. All you need is an engaging website and relevant content to promote your products to start affiliate marketing strategically.
Moreover, you will need a stable internet connection and a system through which you can monetize your website and generate income from an affiliate.
- No Interaction with the customer
You would no longer have to deal with the buyers as you would direct the traffic to the manufacturer website where they can complete the purchase.
- No worries of quality assurance
As an affiliate, once the product is purchased, you can sit back and worry about directing more relevant traffic to the manufacturer website. If the quality is not up to the mark, your commission won’t be stuck. It’s brands’ responsibility to deliver quality products and services.
- You can automate your earning
Although you may have to promote your content based on the niche, but compared to dropshipping, there is less monitoring required from your end. The readers who find the product exciting will purchase from your affiliate link and you get the commission. It is as simple as that.
Once you have established your readership, affiliate marketing is like income generating machine working in auto mode.
- No qualification or expertise required.
Anyone can do affiliate marketing because it does not require any educational background or specific skill set. You can begin affiliate marketing for the products of your choice with zero expertise.
- Complete flexibility
Affiliate marketing can give you the desired work schedule. You have complete flexibility, and you can choose when you wish to work. You can pursue your hobbies and take care of your family while building an income source for yourself through affiliate marketing.
- Work from anywhere
You can work from home, office, garden, anywhere. As you would be managing and monetizing your website, you can work from any place where you can find stable internet connectivity.
- It’s slower
Affiliate marketing has a more indirect approach to telling people to purchase specific products. Compared to dropshipping and e-commerce business, affiliate marketing takes a subtle way of approaching people and converting them for a brand. It would take time to build authorship and bring more visitors to your website who have the buying intent of a particular product.
- The Commission is fixed
The commission in affiliate marketing is fixed. Even if you make a thousand covert thousand visitors a day or bring only one customer in a month, you will get the same amount which has been decided between you and the brand per sale.
- Hard work is more
Affiliate marketing requires search engine optimization, content marketing, social media marketing, PPC and email marketing to bring more visitors to the website. Then, your content must be persuasive enough to convert those visitors into customers. So, to generate a single sale from your affiliate link, you require much hard work to do.
Best Routine For Affiliate Marketers
Conclusion – Which is better?
Think it this way — patience is required for both the platforms.
Have a reality check
Understand which resources you have currently that you can put into either of the platforms. Do you have a couple of products that you think would be great for dropshipping, you would need some finance to invest in social media ads for dropshipping.
Affiliate marketing is a slow paced compared to its counterpart. However, once you start receiving results from affiliate marketing, that cycle will continue on its own. However, in dropshipping, you continuously need to monitor your ads and search for more trending products to sell from your website.
If you can invest a couple of hours without earning anything, then affiliate marketing is a great way to generate an automatic stream of income generation. However, if you can spare some fund and expect instant returns, dropshipping would not disappoint you.
However, consider the hard work you have to do for both the platforms. For dropshipping, you will need a robust consumer support system that can attend customers instantly. For affiliate marketing, you will have to try SEO, social media, email marketing, etc.
So, based on your skillset and preference you can choose which one if the best to become your business.
If we have to pick one option, we will choose affiliate marketing. Affiliate marketing is a great model to make money by promoting someone else’s products. I love affiliate marketing more than drop shipping because affiliate gives me the freedom to promote any product which I want.
In affiliate marketing, I am not managing any inventory, and above all, we don’t have many headaches of product delivery and returns.
Anyone can start affiliate marketing without the investment and you can take it to any level with your efforts.
Do let us know your take on which one of these is your favorite and why? If you are already making a living from either of these platforms, share your experience in comments.