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Dropshipping vs Affiliate Marketing

Oct 25

Which is better? Which is easier? Millions of solopreneurs and business folks are engaged in dropshipping and affiliate marketing. There are huge benefits doing both; and in this article we will summarize the pros and cons behind each of these business models.

What's My Background?

I started Internet Marketing in 2007 selling Asian beauty B2B Cosmetics from this site - (whom I totally recommend by the way) - and since then I have gone on to make a six figure sum every year participating in Drop Shopping and Affiliate Marketing.

1. Drop Shipping

The primary premise behind an online drop shipping business is that as a small business owner, you don't have to have a huge inventory of items (or any inventory at all) or manage any delivery to your clients. That reduces the financial expense and danger of stockpiling items that may or may not sell, as well as the trouble of arranging for orders to be shipped all over the nation or the world. In fact, you don't even need to make or store any things.

The only thing you need to concentrate on is marketing and advertising in order to discover clients and create sales. After the sale, the rest is handled by others. The only fee you will incur is the cost of marketing and advertising to gain a new customer.

Once that is completed, you will engage with a drop shipping firm. This is how it works:

  1. You sell things on your website or through a marketplace such as Amazon or RedBubble.
  2. When one of your customers makes a purchase, you acquire the goods for a lesser price from a third-party firm (the drop shipper, who is generally a manufacturer or wholesaler). This procedure is as simple as transmitting your customer's order, which may really be totally automated. (Remember, you have no risk of purchasing goods because the transaction has already been done.)
  3. The merchandise is subsequently delivered to the customer via your drop shipper.
  4. Isn't it simple? Drop shipping allows you to provide a wide variety of items while keeping your business's running costs to a minimum.

If you are particularly interested in Drop Shipping then I'd advise for you to learn more here.

As you can see, there is no risk on your part because you do not even buy the product (at cost) until the transaction is completed!

What are some of the drawbacks of the drop shipping business model? You must select a trustworthy drop shipper on whom you can rely to deliver to your consumers. If an order is late or does not arrive—or if a product is of bad quality—you are held accountable since your firm is the one who represents the product and the customer experience.

Furthermore, because this market is so competitive, the margins—that is, the gap between the wholesale price and how much you can sell a product for—are smaller, therefore this will be a high-volume sort of business to make a substantial income. Nonetheless, it is a viable low-cost or no-cost beginning choice.

Private labeling your items is one approach to differentiate your drop shipping business from the competition. Simply said, you place your own label/brand on the items made by the manufacturer. That way, you're not competing on pricing with the same product brand; instead, you may use your own brand and face less competition. Consider this: when you go to the drugstore, brand names sell for more money, and consumers believe they are superior to generic brands, even if the components are same. When shopping for a reputable drop shipping product, keep these crucial aspects in mind.

Anyone thinking about starting a drop shipping business should carefully consider utilizing Amazon.com or eBay to build their business and learn more about being a lucrative Amazon seller, because Amazon is a well-established marketplace with a large consumer base. You should eventually consider opening your own internet store.

  • Advantages: Requires relatively minimal beginning capital.
  • There is no need to keep inventories.
  • You may take use of established marketplaces with pre-existing consumer bases.

2. Affiliate Promotion

Affiliate marketing is comparable to drop shipping, but there are several major distinctions. You don't have to have an inventory of your own items with this e-commerce approach, and you don't have to worry about shipping things to buyers.

Essentially, you choose a successful area for your internet company and then select an affiliate partner that sells things in that niche. Clickbank.com, Amazon.com, and CJ Affiliate by Conversant are some of the most prominent affiliate sites (formerly Commission Junction). They provide almost every digital information product (such as ebooks, audio files, and video files) or physical object you can think of. Many well-known corporations and brands, such as Wal-Mart and Home Depot, have their own affiliate networks.

You sell the items through affiliate marketing, for example, on your blog or e-commerce website. Each product has a unique link that leads back to your affiliate partner's account. When a prospect clicks on the link, they are directed to your partner's shopping cart, where they may complete their purchase. When they make a purchase, it is logged and you are paid a commission. Commission levels vary based on the affiliate partner, but are often 5% to 25%, or 40% or more for digital information items. As you can see, there is little risk on your behalf and almost no investment required. Your only expenditures, like with drop shipping, will be marketing and advertising to attract visitors and produce sales. It depends on the niche and product items of course. If you are selling speciality T-Shirts or Mobile Phone repair then the margin will be less, but if you are selling higher-ticket items then the commission will be higher - like for example the Jet-Sharing business

The primary distinction between this and drop shipment is that the business strategy is much more hands-off. All you have to do is offer a link for the consumer to click on, and the merchant will handle everything else, such as billing, order fulfillment, customer care, and so on.

All you have to do is manage the marketing to persuade your prospects to buy (through social media, email marketing, blogging, or whatever method you choose). However, once they click the affiliate link, you have no control over the situation. You are not required to ship merchandise or answer customer support inquiries. You're also not required to keep an inventory.

All you have to do is concentrate on paid and free methods of marketing your web business.

Affiliate marketing is one of the most "hands-off" online enterprises you can establish.