Trying to decide between affiliate marketing vs dropshipping? Here I’m going to tell you everything you need to know about these two business models.
I’ve worked with both of these business models myself, so I can tell you what you need to know about each.
While these are both great business types, all business models have their pros and cons. I’m gonna list them out for you so you can decide which one is best for you.
Let’s get to it.
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What Is Affiliate Marketing?
If you’re looking to start a business online then affiliate marketing is one of the most popular and fastest ways.
Affiliate marketing has a huge appeal for 2 main reasons; it’s easy to get started, you don’t have to invest a lot of money (you can get started for free), and the earning potential can be crazy-high for experienced affiliates.
Affiliate Marketing allows companies to sell products and services through affiliates. Companies provide the product or service being offered, but the affiliates get paid if they send people to the company’s website.
Anyone can apply to an affiliate program. Once the affiliate is accepted they will be given a unique affiliate link through which they can promote products and get paid.
Affiliates usually promote affiliate products through some kind of online content (blog posts, YouTube videos, social media posts, etc), or through paid ads.
When someone clicks on an affiliates link they will be taken to the product owner’s website. If the customer buys something, the affiliate will earn a commission.
Both the product owner and affiliate can monitor how many clicks and sales are being made through the affiliate link.
Affiliate Marketing Pros and Cons
Affiliate marketing is a fantastic business model. Affiliate marketing also has several advantages over dropshipping.
A lot of people are drawn to this business model because you can start an affiliate business with no money.
With affiliate marketing, you can get started right away. Once you’ve got your affiliate links out on the internet you can potentially start earning money immediately.
Another big advantage of affiliate marketing over dropshipping is that you can earn a good income much more quickly.
Dropshipping is quite fast too compared to a traditional eCommerce or network marketing business. However, you’re still gonna need to spend time sourcing products, building relationships with suppliers, and setting up a website.
Here are the affiliate marketing pros and cons:
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Pros of Affiliate Marketing
- Low barrier to entry
- You don’t need to own the product
- You don’t need to deal with customer issues
- You don’t need to worry about shipping
- You can get started for little or no money
- You can choose to promote any products you like
- There a lots of great products out there to promote
- You can earn passive income
- You can work as much or as little as you like
- Some affiliate programs pay out huge commissions
- Some programs pay you a monthly, quarterly, or yearly recurring commission
- You can work from anywhere
- You are your own boss
- You call the shots in your business
- Lots of great courses available to learn affiliate marketing
Cons of Affiliate Marketing
- It can be difficult to find profitable products
- There is competition in many niches
- Sometimes programs change their terms
- Sometimes affiliate programs can shut down
- Some courses can be scams
How Much Money Can You Make From Affiliate Marketing?
In the early days, affiliates, of course, will make little to no money. This is to be expected with any business model because it takes time to learn the core skills.
Once affiliates gain experience, the majority make between $1,000 – $10,000 per month. However, the scope to grow is almost limitless, and highly experienced affiliates can make over $100,000 per month.
How Fast Can You Make Money With Affiliate Marketing?
Most affiliates don’t make money straight away. It takes time to learn the skills necessary. But it doesn’t have to take a long time if you follow the right training.
Besides learning the skills, some methods of affiliate marketing are faster than others. For example, blogging is quite a slow method, but it has the benefit of being able to yield high profits for years to come if done correctly.
The fastest methods involve using social media platforms like Facebook and TikTok. For example, following this short TikTok course for affiliates is one of the fastest ways for beginners to get started.
Super-affiliate Spencer Mecham also teaches a fast method using Facebook in his Affiliate Secrets 3.0 course. According to Spencer, beginners can earn as much as $10,000 per month in their first 30 days providing they follow the method he lays out.
I took this course myself. You can read my full Affiliate Secrets review here.
What is DropShipping?
Starting a dropshipping business allows you to start an eCommerce business from scratch without having to spend thousands of dollars on inventory.
This model allows you to sell physical products without having to buy them yourself in advance.
Instead, you can find suppliers who will sell you goods at wholesale prices and then ship them directly to your customers on your behalf.
This means you don’t have to pay upfront costs like setting up a shop, buying stock, hiring employees, or paying rent.
DropShipping Pros and Cons
Dropshipping is great because it allows you to start making money from day one. It also has some cons though.
Here are the main pros and cons of dropshipping:
- Allows you to start an eCommerce business without needing to spend a lot of money on inventory
- You can get started quickly
- You can do it as a side hustle
- Easy to pivot if your dropshipping product stops selling
- Shipping and handling is taken care of for you
- You don’t need to worry about not being able to shift stock
- You can focus more of your time on the marketing
- Lots of companies allow you to resell their products on a drop ship model
- Is more simple than traditional eCommerce
- You don’t have control over inventory management
- Supplier can change their prices without noice
- Supplier may go out of business
- Supplier may be out of stock and not tell you fast enough
- Customers often need to wait a long time for delivery
- Need to manage customers expectations
- You will need to handle refund or exchange requests
- It can be difficult to discover which products sell well at first
- You may spend time and money on trial and error to find the right products
How Much Money Can You Make From DropShipping?
The amount of money you can make from dropshipping depends on many factors, including what type of product you are selling, where it comes from, and whether you are using Amazon FBA (Fulfillment by Amazon) or another service like eBay.
Some products will sell better for you than others, but you won’t know that until you try. Getting the right product in front of the right customers while keeping your costs low is the key to making this business work.
Typically, successful drop shippers make between 20-30% of each sale. The rest of the money is spent on buying the product from the supplier, website hosting, and marketing costs.
How Fast Can You Make Money With Drop Shipping?
It’s not easy to say, as the answer depends on many factors.
If you want to start making money fast, then you’re probably better off focusing on building a brand and getting traffic first. Once you have built a strong brand, it will be much easier to sell to your audience.
Another benefit of taking this approach is that you can always start by selling affiliate products to your audience to make money more quickly. This will also give you a clearer picture of what they bite down on. If you still want to get into dropshipping then it should be much easier from here.
If dropshipping sounds like the right business model for you, then you can learn how to start a 6-figure dropshipping business here.
Dropshipping or Affiliate Marketing The Main Differences
Before you choose either method, it is important to know how much effort is required to succeed.
The dropshipping business requires considerable investment upfront, while affiliate marketing doesn’t require any money to get started.
The affiliate marketer has no control over the pricing of products, but they have full control over their marketing efforts.
All affiliates really need to focus on is the marketing, and they will then earn a commission for any products they sell. Affiliates also do not need to worry about shipping, customer service, refunds, etc. All the is handled by the product owner.
In contrast, the drop shipper has full control over their products, pricing, and the checkout experience they provide to their customers. However, they will also need to deal with shipping the products and handling any customer service issues that may come up, including complaints and refunds.
So, the main advantage of dropshipping is that it allows you to control the pricing, while the main benefit for affiliates is that they don’t need to deal with the headaches of fulfillment and customer service. Affiliates can focus almost all of their efforts on marketing and work to build passive income streams.
Affiliate Marketing vs DropShipping – Final Thoughts
Affiliate marketing and drop shipping are great business models. However, in my opinion as someone who has worked with both models, you can make a lot more money with affiliate marketing, and more quickly.
Overall, my verdict on affiliate marketing vs dropshipping is that affiliate marketing is the clear winner.
As an affiliate you can get started quickly as an affiliate with the right training, you don’t need to invest much money to launch your business, most affiliate programs are free to join, and you can earn passive income for your efforts.
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