In the modern world we see everything develop around us. Right now, a person can be earning money easily even if they are sleeping. Now there are many ways of earning money whether it being a small business or a big one, there’s always the factor of growing your business without really spending a fortune on a new business model. The current online business model that have brought much profit to business is “Affiliate Marketing” which is an easy alternative way of growing your business. Apart from that we also have “Dropshipping” which is like a third-party fulfillment method.
Don’t believe that affiliate marketing is better than drop shipping? Let’s change that and give you proof of why it is so but before we know about why affiliate marketing is easier than drop shipping, we need to know and mark the differences of what affiliate marketing is and what drop shipping is as it would give us a better statistical view on everything.
Let’s Go in Detail
What is Dropshipping?
In dropshipping, you find a manufacturer or someone that creates the product that you want to sell but you need to get it at a discounted or lower value price. After doing so you need to promote the product without having them in your possession. Now when someone buys your product, you’ll be contacting your supplier or manufacturer to place the order and they’ll be delivering the product to your buyers with your branding.
In affiliate marketing, you also don’t need to keep stock or create an inventory of products around you. You have a wide variety of inventory to choose from and all you need to do is promote their product on your medium of expression and drive them to the website to purchase the product. The cookie lifetime period is also a cherry on top as for most ecommerce affiliate programs, the cookie lifetime of up to 30 days means that you will get commission for all the products purchased by your referred customer.
There is no control over product quality for Drop shipping as you are never and there is a potential to lose your customer base if service quality is bad or package is delayed by dropshipper. Stock availability maintenance is also another big hassle as its quite important to keep track of inventory from supplier and can be a problem if not done right. In a way, your drop shipping business is primarily based on the honesty and credibility of your supplier which is specially a problem in the early stages of business as the supplier’s priority might to please their bigger clients.
How do commissions work?
Unlike affiliate marketing where you earn money through a set commission, in dropshipping you earn money from the difference between your selling price and the original price that the manufacturer sells you the product for. The difference between these two is the money you will earn. So, you can either earn a lot by having knowledge about market pricing and knowing how to sell them on any rate you please or otherwise you’re likely to get no sales which is a huge risk.
If you still are not clear about things let us help. Perhaps the original price that the manufacturer sells you the product for is $100, now when you’re promoting it on your own you add an additional price of $60 and sell the product for a grand total of $160. This means that the additional price that you put in is the profit and money that you’ll be earning.
What’s affiliate marketing?
According to indoleads.com, affiliate marketing is the type of marketing which is based on performance in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts. Basically, affiliate marketing is a kind of marketing where you are most likely to sell a product which belongs to another company through promoting it in your given audience. If your audience decides to buy that product through your referral links, then you’ll be getting commission from the company whose product you just advertised/promoted.
You’re supposed to give a better image of that product and try to sell as many as possible. The more you sell the more you’ll earn commission. Anyone can become an affiliate marketer whether them being solo entrepreneurs to startups to massive companies. Sites like Indoleads provides one of the best programs with detail, that you can join in almost no time.
Now there are a lot of Affiliate Marketing Programs out there which you can join based of the liking of your audience and then earn money through it. Commission rates are always given in them so it’s easier to see how much you will be earning through every product. There is also a slight chance of you getting a bonus from the company. Companies like Amazon, Apple, Samsung, Alibaba etc. all have their own various affiliate programs with a line of products which you can choose and promote accordingly.
How do commissions work?
The product owner can pay you 50% commission on every purchase made using your referral links if he wishes to do so. In other words, if the product costs $1000 and someone buys a product through your links, if you’re supposed to get 50% commission then you should be earning $500 through each purchase and that will be your affiliate commission money.
So, if you’re starting to get in the world of affiliate marketing you need to make an audience that you can sell to with a similar taste in products that you have for display.
Now that we know about what these two terms are, we can talk about their differences.
Difference Between Affiliate Marketing and Dropshipping
- Affiliate marketing does not allow you to change the price of your product it’s completely fixed, and you get paid whatever you get from the owner of the product. On the other hand, dropshipping allows you to be flexible with your product and set any price for it as you please.
- In dropshipping you can let the people know about your product in detail so they know what they are buying but in affiliate marketing you’re only bound to giving them as much information as you’re given by the owner of the product.
- Both businesses have low startup costs, so anyone can start them. However, dropshipping costs are much higher compared to affiliate marketing in later stages
- Dropshipping lets you create a brand of your own rather than something like just promoting a product of another company and earning through it.
- In Dropshipping there is a very big risk of currency fluctuation as when selling internationally you get paid in that currency and if during the time of conversion, the currency fluctuates it could give you a big loss in profit. This would make you look into currency trades and stats a lot and you would have to keep track of when it would be safe to sell internationally. Meanwhile in affiliate marketing you don’t really need to worry about that as you get paid exactly the price you work for in your currency. That means currency fluctuation does not really affect you.
- In Dropshipping you need to research about products very much relative to how much you would have to in affiliate marketing as products in DS are very limited whereas in affiliate marketing you have an almost unlimited supply of products and brands.
- In DS you will be facing a lot of competition with other companies as you would have to sell the same product, some other company is selling better, in your company and attract customers accordingly.
- In affiliate marketing you have the opportunity to even sell products of big brands such as Nike, Addidas, LG, Samsung, Sony etc. This also helps in making it relatively easier for you to sell the product as the demand for it is high and you don’t have to do any brand building on your own.
- In Dropshipping you’ll be needing a lot of resources from manufacturer to shipment to editors and support team to basically manage all aspects of business but in affiliate marketing it’s easier as you only recommend people to buy something and get paid for it. You don’t really need much resources or have to deal with them.
- As a dropshipper you will have to spend a lot on ads to promote your product unlike in affiliate marketing in which you are the advertiser.
Skills/Resources you need for both Affiliate Marketing and Dropshipping.
Here is a set of skills and resources we have gathered for you guys that you will be needing in order to start in any of the two business models given. You should have Research/Niche Selection Skills you should be good at researching and knowing about the things that you are displaying, Building a Website (WordPress) is also something you SHOULD have as you want a place your audience can visit when they need anything from you otherwise you’ll be cut off from them and no contact means no sale, Traffic Generation Skills (you need to know what things can bring you more engagement and traffic on your website/referral links, Writing Skills (knowing good grammar and writing good will only improve your communication with your buyer), eCommerce Experience (knowing the market is also a good thing to know before you start anything as it would give you a better statistical outlook on things), Social Media Marketing Skills (is something that is very important for you to learn as you want your audience to be engaged with you and your products you want them to come back to you every time), Content Creation (you will not need this for dropshipping), Customer service (you will not be needing this for affiliate marketing as you have nothing to do with it and everything like that is handled by the company).
Now yes it surely seems like dropshipping is the better option when it comes to having your own e-commerce business going on but if you look at it and if you’re the type of person who doesn’t really want much stress and just wants to earn a decent amount of money by just doing the bare minimum of promoting other’s products and recommending it to your audience as a blogger. Really depends on what type of a person you are.
In affiliate marketing, you can earn the least amount of money by just recommending people products that they potentially want and tell them to use your links. In other words, bringing traffic to your links to earn money even when you’re sleeping. You don’t need to look after the business of the products or care about any problems such as customer support etc. it will all be handled by the company. You only have to work on your skills of promoting better than others in the market and you’ll earn a decent commission depending on the program you’ve chosen. Your business grows if the company of the product grows, so anything happening to the company also affects you as you’re dependent on others. But another point is that though product owners might be earning less money as they would be giving their affiliate a percentage of the money but they are also reaching a whole lot more customers that they wouldn’t be able to reach on their own.
Meanwhile in dropshipping you’ll have to look into many things such as records, keeping track of the orders that are being placed, the amount of deliveries that are pending and need to be reached to the buyers. Dropshipping is you handling a business which is not an “easy” thing as YOU need to do everything for the business. But you can earn at high margins.
Each has their own advantages and disadvantages in the marketing world. They both have competition and they are both solid options to kickstart your online career if you want to get started today. If you are considering to start affiliate marketing, then you can consider affiliate networks like Clickbank or Commisson Junction which might be difficult to get in or regional affiliate networks like Indoleads which is based in Asia and offers worldwide affiliate programs
So, when it comes to what’s much easier when it comes to earning money than affiliate marketing is definitely the answer. In the recent upcoming years, a drastic rise in people joining affiliate marketing will also be seen as companies are continuing to grow their businesses and are investing in it.