Dropshipping or affiliate marketing, which one should you go for? Online businesses are a very promising way of making money quickly if you know the basics and you work hard at it. Consequently, many people have started selling their own products or getting them wholesale from Asian suppliers. These types of e-commerce are mostly a secondary form of income and don’t require too much work to maintain.
When opening an online store, there’s a common problem: what do I do with my stock? Keeping an inventory and sending the products to your clients requires time and effort. This is why many people choose to trust a dropshipping supplier that takes care of everything: they stock the products and send them to the consumers.
Another alternative, when looking for an option that doesn’t involve managing stock, is affiliate marketing. When you work as an affiliate you help e-commerce businesses to promote their products, and receive commission for each sale.
So which is the best option, dropshipping or affiliate marketing? This question arises because not everybody knows the exact differences between these two types of online business. Let’s take a look at their definitions and the advantages and our personal favourite.
How can dropshipping benefit my e-commerce?
Dropshipping is an online retail activity in which the seller adds a product to their store without actually having the physical item in stock. Instead, they pass the order to the dropshipping wholesaler. The suppliers will then send the product to the final customer using the seller’s name. It is a very good option if you don’t want to have to worry about stock, as all you need do is pass the order to your dropshipper.
If you decide to start working with a dropshipping supplier, your initial task will be to choose which one and then close a distribution agreement. Many wholesalers require a monthly fee or request a “per sale” commission, so you need to bear that expense in mind before you start.
When you work with a dropshipping supplier, you’ll buy wholesale products at cheap prices and then resell them at a slightly higher price. This difference in price will be your income! The supplier will suggest a retail price, but it’s completely up to you to decide how much to charge.
What are the benefits of dropshipping
You can focus on what’s important. The dropshipper will take care of everything related to logistics, so you’ll have more time to work on bringing traffic to your store and, of course, selling as much as you can!
Packaging and delivery are processed by the dropshipper. You, as a retailer, don’t need to worry about this. The supplier will deliver the items to the buyer’s doorstep with your store’s name on the package. The dropshipping supplier will provide an upgraded catalogue, with proper descriptions and images for every product. However, we recommend that you modify the descriptions a little in order to avoid a SEO penalisation from Google.
If you decide to work with a dropshipping wholesaler, your initial investment will be significantly smaller. You won’t need a warehouse and you won’t buy any stock until you get an order through your website.
Dropshipping suppliers usually own big warehouses, with thousands of products in stock. If you work with one, you’ll have access to vast catalogues. Otherwise, your stock would be relatively limited, since you would have to store it yourself.
Why should I go for affiliate marketing to boost my e-commerce?
Put simply, affiliate marketing is an agreement in which you promote and sell someone else’s product or service, and earn commission when a sale is made. So, how does affiliate marketing work?
First of all, you should look for a market ‘niche’ to start working in. You should choose products which are in demand and popular! Then, you’ll need to register as an affiliate. Most sites don’t charge you anything for becoming an affiliate, so look out for scams.
After joining an affiliate platform, browse the products and services that you could promote. Each of them will have specific conditions, and you’ll get a link that you need to promote in order to make sales. Affiliate marketing is one of the quickest ways to make money online without investing anything because you won’t be selling your own products.
Benefits of affiliate marketing
There is no need to own any products. So, just as with a dropshipping store, you won’t need to worry about stock. There are no barriers to entry! Registering in an affiliate platform is usually free.
The merchant will handle the customers’ information fulfillment and the order process. You literally don’t have to do anything regarding the order process. All is automatically taken care of. If you are not happy with the way it’s going, you can just change your supplier and start promoting a different product.
According to us, would we rather go for Dropshipping or Affiliate Marketing?
Having an online store gives you greater benefits than just being an affiliate. With an online store, you can set the price as you wish. Whereas, if you are an affiliate you need to accept the conditions that the seller establishes. Everything is fixed and your margin for negotiating is very small.
In Clickbank, for instance, members can expect a commission of approximately 30 % for every sale. This number is significantly smaller than what you would be able to earn with your own online store! With a dropshipping store, you can earn up to 50 %!
However, the main benefit with dropshipping is the fact that your brand is the one getting all the attention. When you have a dropshipping store, the supplier will send the items to your customers in your name. If you are doing things properly, clients will talk about your e-commerce and come back for more.
However, if you are just an affiliate, the main seller is the one that gets all the credit. In the long run, you will not be “building” anything, just promoting someone else’s brand. In the future, the customer will not buy through your website. They will go directly to the seller’s website, and you will not get any commission.
So, why not dedicate your efforts to building something more substantial? In the long run, the benefits will be greater with a dropshipping store than as an affiliate marketer.