Affiliate Marketing vs Dropshipping 2020
So Affiliate Marketing vs Dropshipping in 2020 huh? Which is best for you? Let’s discuss it.
I suppose you plan to or want to start an online business and been wondering the difference between the two of the biggest ways of earning a living or side hustle online.
Affiliate marketing and Dropshipping are totally two different online business models in a sense that one is a digital marketing channel while the other being a branch of ecommerce.
Now you have gotten a clue of what the difference is… Which one of the two upstages the other?
Continue reading this article…..
What is Affiliate Marketing?
This is a digital marketing channel where online marketers like you or me promote affiliate products and earn a commission when a customer/consumer clicks on the affiliate links and makes a purchase.
Almost all your online or internet gurus started their journeys with affiliate marketing.
Affiliate Marketing vs Dropshipping:
How does affiliate marketing work?
Before jumping on to how affiliate marketing works, get to know the most important parts that ideally make it up;
Producers: There are the affiliate products founders or manufacturers.
Affiliates: Refer to people like you and me who promote affiliate products and get rewarded with commissions when a customer buys through our link.
Affiliate Marketplace: They are the networks that avail the affiliate products to the affiliates and help run the transactions between the affiliates and producers. There are tens of them with the common ones being Amazon clickbank, CJ and Digitsore24.
Customers: The customers or consumers complete the whole cycle of affiliate marketing when they make a purchase through clicking on an affiliate link.
In a nutshell, starting an affiliate marketing business is as simple as ABC, literally anyone can start it provided there is an access to internet and computer.
First and foremost, you join an affiliate network through signing up. There are a bunch of free ones to join like clickbank, Digistore24.
Secondly, you pick an affiliate offer or product to promote. You can either choose high-ticket products or the low-ticket products.
The difference being high-ticket offers are products that are priced fairly high thus having higher commissions while the low-ticket products being those have lower commissions.
Additionally, you choose where to promote your affiliate offers with the most familiar ways being blogging and paid advertising.
And finally, you make a commission when a customer clicks on your affiliate and makes a purchase.
Over the years, ecommerce has evolved into one of the biggest economic powers worldwide. What’s even more exciting is that it’s expected to grow into a seven plus trillion-dollar industry come 2021.
Dropshipping is an ecommerce retail business model where the store owner doesn’t need to own an inventory to sell products online.
Dropshipping is totally different from the standard ecommerce where one has to invest in buying the stock and building an inventory.
Affiliate Marketing vs Dropshipping: How does Dropshipping work?
I could go on for hours explaining how it works but hey, below is short summary;
Firstly, you go out online looking for the suppliers to make for your desired products to sell, especially in North America.
Then you get the products desired and test them out using paid ads to find out the one that is really selling. The testing is really important because it helps you to easily scale on a winning product thus more return on investment.
You then stock up your ecommerce store with the products that are entirely doing well in the market.
And lastly, you only pay your supplier if a customer places an order and pays the money.
It should be noted that you are entitled to the amount of money you charge on each of the products you’re selling.
The pros or Benefits of Affiliate Marketing
There are a lot of pros of doing affiliate marketing and they include the following;
No need of a personal product
There is no excuse not start an affiliate business because one doesn’t need to own or create an affiliate product to carry it out.
All affiliate marketing programs online are free to join which really make it affordable for everyone that is really interested in the business model.
With affiliate marketing, when done exclusively, especially the with blogging, the income becomes passive with less more work to be put in. This really makes it stand out.
One of the most underrated pros of this business model is that there is no worry of dealing customers over any issues because all that is taken cared by the product creators.
Cons of Affiliate marketing
- There is delayed payment as a result of the critiquing process and the moneyback guarantee policy of affiliate products. The affiliates maybe paid after a month money or so for the commissions claimed so as to ensure that the customers are content are the product hence no refund.
- Affiliate links can be removed by people especially when they appear spammy and are not shortened. Others think it may cost more money if they buy through your link.
- You don’t have total control over the affiliate offer prices. As an affiliate your job is to promote and receive a reward in commission form; take it or leave it. In other words, you only make a percentage of money assigned to affiliates, this can result into losses if one uses paid ads and does not optimize properly.
Pros of Dropshipping
- Easy to start; just like affiliate marketing, dropshipping requires almost no capital because its only investment is in paying for ads which later is covered by products sold.
- More earnings: with dropshipping, you earn whatever price you choose to price a product and only pay the supply their standard amount set. This gives one freedom to sell several products with their on dictated prices.
- Very easy to scale; yes, you heard that right. When you get a winning product, there is literally nothing that stops you from making hundreds of thousands of dollars simply because you only need to scale the ads.
Cons of Dropshipping
- Money can easily be lost from the series of testing different products in paid ads to find the winning one.
- Customer service: Oh by far one of the most hectic part of the business, having to deal with customers from all over the whole. From giving out order ID to providing out the delivery details to each of them.
- There is a lot of competition in the saturated niches which forces one to lower prices in order to go with the flow.
Which one is more profitable: Affiliate marketing vs Dropshipping 2020?
Affiliate marketing is not as profitable as dropshipping simply because there is mot scaling as much as it is with the ecommerce model. Besides that, in dropshipping you dictate the pricing of your products to sell unlike with affiliate marketing where the commissions are determined by the product creators.
However, when starting out as beginner with no good budget, affiliate marketing is definitely the best way to start out because it requires not much as dropshipping.
Common Similarities between Affiliate marketing and Dropshipping
- Both businesses require less capital for star ups.
- They all have potential high income if done appropriately
- Both are low risk businesses
- The all require no inventory
- Both business models don’t require individuals to have products.
- They all require promotional or marketing strategies in order to drive traffic to the offers.
My Final Thoughts
If you have read and reached this far, there is no much to say. As you can clearly see that both businesses are great ideal for beginners and advanced marketers. I can’t really pick out which one comes out a winner because they all thrive under different circumstances.
However, if one is looking for quicker results, I would definitely recommend dropshipping, not forgetting that one actually has to invest in the das and testing of products to sell.
On the other hand, those on tight budget, I would recommend affiliate marketing without thinking twice because it’s costly.
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