One of the biggest conundrums new and aspiring entrepreneurs face these days is deciding which is the better option - dropshipping vs affiliate marketing.
If you fall into this category, by the time you finish reading this article (don't worry i'll try to keep it short, fluff free) you should have a crystal clear view on which one is for you.
Because I have been doing this stuff for years, most of my online income is split between these two business models. So yes, both of them do work.
What we need to determine is - what will work for you?
What's great about both of these models is that it allows you to only focus on selling. You never need to worry about stocking items in your bedroom or garage. If it's a digital product, you'll never have to worry about all the money that goes into creating the product. Your goal here for both business models is to drive targeted traffic to your offer.
Now obviously there's more involved but that's the gist of it. There's a lot you need to learn before you get to this stage in order to be successful. Today we are just going to determine which one is right for you though.
Dropshipping VS Affiliate Marketing - Which Makes More Money?
The first thing that you need to tell yourself here is that it's not about which one makes more. This is the wrong approach. I'll give you an example.
Let's just say you had an opportunity to select two jobs. (Yup, I said the J word)
Job #1 pays $50K a year and it involves something you like doing. Job #2 pays $60K a year but you know already you're going to hate this job as it involves something you don't like.
Now, for some people, they might chase the money and go for job #2. But how long will they last? People that choose job #1 will be happier. This is so important for your well being. Furthermore, you'd be happy to do overtime and maybe even make more than job #2 in time.
I hope you see my point here.
So both affiliate marketing and Dropshipping will make you money but the one that you enjoy more - is going to make you more!
So How do I Determine Which is for Me?
If you're a beginner, the best way to answer this is I am going to give you the pros and cons for both. We'll have a little chat at the end then the choice for you is going to be clear. Fair?
First off. for those that don't know what these two models are (I don't want to leave out anybody) I am going to give you a brief description of each. If you know already, you can skip this part.
What is Drop Shipping?
Dropshipping is an ecommerce model where you run an online store hosted on a platform like Shopify. You will not have to keep any inventory or do any shipping.
You drive traffic to your product via ads or organic search. When someone makes a purchase, you will place the order with the vendor of the product. The vendor then ships the product directly to your customer.
You make money because you are selling these items on your store for a massive markup. For example, you can find tons of products that sell for a dollar and sell them for $10-$15 or more on your store. That's how you make a profit.
The Best Dropshipping Course?
See what my top dropshipping course pick is and get a sneak peek inside.
What is Affiliate Marketing?
Affiliate marketing is similar, but different. Here you are referring a customer to a product or service. If they make a purchase then you will get a commission. Like dropshipping, you don't have to store any products or do any shipping.
Your commission is tracked via a tracking cookie so the vendor knows the sale came from you. You'll be able to log in to a portal for the affiliate program and see your stats which usually include clicks and sales. I did another article on the pros and cons of affiliate marketing which you should also check out.
The Best Affiliate Marketing Course?
See what my top picks are and the choices you have.
The Pros and Benefits of Dropshipping
- You can choose your products to sell. You can either set up a niche specific store or a general type store.
- You control the price. Higher profits can be made by increasing your price.
- The customer data is yours. You can market to them forever through email & other promotions like retargeting, etc.
- You don't need to store any products or do shipping yourself.
- Building your own brand. You are not building someone else's.
- Repeat business and upsells are possible with dropshipping making more $.
- You could end up selling your store for a huge profit.
- Low start-up costs. You can have a fully functional store for less than $50.
- Many suppliers for the same product - if you are doing well and the supplier goes out of business or jacks prices - you can find another one.
- Can be VERY profitable
The Cons and Disadvantages of Dropshipping
- Testing. You will need to test a number of products before finding a winner.
- You will be in charge of customer support.
- Problems with suppliers. Do your research first before choosing one to avoid issues later.
- Price changes. As the market fluctuates you'll need to stay on top of any price changes including ones from the supplier.
The Pros and Benefits of Affiliate Marketing
- Startup costs can be as little as free.
- You will never have to do ANY customer support or deal with any complaints.
- You don't need to worry about pricing or stock issues.
- This model can be passive. Once it's running you can take off on vacation and not even touch it for a while if you don't want to.
- You can choose the product or brands that you want to promote.
- You can market a product you know a LOT about. Just find an affiliate offer - but do your homework first to see if it's worth it.
- You don't need to set up a store or worry about payments.
- Can set up a blog, Youtube Channel or just create a funnel to start your affiliate business. There's many different ways to approach it and don't need a store.
- Can also be VERY profitable
The Cons and Disadvantages of Affiliate Marketing
- You don't own the customer but you can still capture their email and market other products.
- If the affiliate program ends, so does your commission with them.
- Some niches can be super competitive (choose wisely!)
- May have to wait a month to receive your commissions.
Conclusion and Final Thoughts
So in the beginning of this article I told you that you'll be able to choose which one of these two business models is for you.
If you carefully read the pros and cons above, you should have your answer already.
The main difference between these two is that dropshipping does require more attention. For example when you get an order or a bunch of orders in, you manually have to go and place the order with the vendor.
With affiliate marketing, it's all seamless and passive. When a sale comes in, you simply just wait to get paid. Affiliate marketing can take longer to achieve success though - especially if you are going the SEO route. With dropshipping, you could sell your first product tomorrow - even if you don't have a store as you are reading this.
What Now Then?
You need to arm yourself with the right education.
I beg you to NOT go into either one of these without proper instruction. Both are very competitive and you need to learn the latest strategies in order to succeed.
Without this, you will get eaten by your competition.
Not only that, you are going to spend money needlessly. A good course can actually SAVE you money - think about that for a second.
You aren't going to learn this stuff on Youtube.
Sure, there's a lot of good resources on Youtube that teach both affiliate and dropshipping but the info could be dated and a lot is held back. You aren't going to learn everything you need to know. One small strategy can make all the difference.
This is What You Need
I want you to learn from the best, I also don't want you spending a lot either. Fortunately for you, I have invested in over 20K in courses over the years and know how to separate the bad from the good.
Also - expensive doesn't always mean better.
If you want to learn this stuff, I'd suggest you take a look at my suggestions.
For Dropshipping - read my review here on my best course pick.
For Affiliate Marketing - Check out my top affiliate marketing course picks.
If there's still any confusion, please reply below or just send me an email via my contact page.
To your success,