If you are an online entrepreneur and would like to earn money online with new ways of doing business in the digital marketing domain then you can select among the two most profitable ways of doing online business i.e. DROPSHIPPING VS AFFILIATE MARKETING.
Here in this post, you will get to know about the pros and cons with detailed comparison and similarities among DROPSHIPPING VS AFFILIATE MARKETING.
SO, here we go…
First and foremost, let’s try to understand DROPSHIPPING VS AFFILIATE MARKETING.
There four important people involved in the ecosystem of Affiliate Marketing.
- Advertiser (Marchant)
- Publisher (Affiliates)
- Consumer (Consumer)
- Affiliate Network (Affiliate Network)
Advertiser: Advertiser is the merchant who manufactures or designs products to sell in the market. They wanted to expand their business to increase sales.
Publisher: A publisher is a person who is a blogger or website owner who wanted to turn his website’s traffic into money. He would like to guide or suggest his traffic to buy a suitable product for them.
Consumer: He is the person who has the desire to buy a specific product to fulfil his needs. He is searching for a product to satisfy his requirement.
- Affiliate Network is nothing online platform and it supports Advertisers to come over and display their products on the website owned by Affiliate Network.
- The publisher also comes over in search of the products to borrow and displays them on his website after successful registration on Affiliate Network.
- Consumer visits Publisher’s site in search of finding products as per his desire and then get diverted towards Affiliate Network for actual payment.
Common points among Affiliate Marketing vs Dropshipping
- Both can make you start a business without maintaining stock or inventory.
- Both help you to start your business with less investment and risk.
- Both businesses are here to stay for a longer period.
- You can start with simple steps of registration.
- You have to use your expertise to convince consumers with creative ads, building a landing page, and digital marketing skills.
Commercial Model of Affiliate Marketing:
Now let’s try to understand the commercial model of Affiliate Network.
- “Consumer” buys the product from Affiliate Network and pays fees to “Affiliate Network”.
- “Affiliate Network” get paid and share part of his fees with “Publisher”. This commission is called as “Affiliate Commission”
- “Affiliate Network” charges X amount to “Advertiser” to display product.
Example: Let’s try to understand with four characters like Kaleen Bhaiya, Guddu Bhaiya, Bablu Pandit, and Lala. These are the characters from a famous Web Series called Mirzapur.
Kaleen Bhaiya is a manufacturer. He manufactures Carpets and he wants to sell Carpets to entire India instead of one territory like UP. He prefers online marketing and gets registered on Amazon.
KALEEN BAHIYA is Advertiser
LALA Affiliate Network
Guddu Bhaiya always wanted to start his business to become a successful man. He has an interest in carpets. He starts writing about carpets on his blogging site. Guddu Bhaiya has a good number of followers like Bablu who want to buy new Carpets. Bablu gets diverted towards Amazon from Guddu Bhiya’s site.
GUDDU BHAIYA is Publisher
BABLU is Consumer
Kaleen Bhaiya would like to sell his carpets from Amazon Affiliate Network. Guddu Bhaiya also visits Amazon and selects few Carpets to promote it from his site. Guddu Bhaiya writes an article to support and guide them to choose the best Carpet for their traffic on the site. This site will help his followers or traffic like Bablu Pandit to make up their mind to buy Carpet. Finally, Guddu bhaiya will 10% commission which got fixed by Amazon and cannot be further discussed. Product cost on amazon and affiliate commission is fixed.
This is Affiliate Marketing.
Now, let’s try to understand Dropshipping.
Guddu Bhaiya would like to make it big and he is not happy with the current affiliate commission which is nearly 10% offered by Amazon. Amazon neither allows him to increase costs nor commission. He wants to sell Carpets at higher costs to earn extra income. Here comes dropshipping.
Guddu Bhiya contact another network like Lala who allows him to sell Carpets at his costs. Lala also helps to maintain its inventory at a preferred location. If Guddu Bhaiya wants to sell Carpets to the US market then Lala will keep its inventory available in the US for quick delivery directly to the consumers. Now products are available on Guddu Bhaiya’s site instead of Lala’s site. Guddu can charge extra and earn more than 25% to 50% on each sale. Lala acts like a dropshipping supplier.
Here Guru is responsible for Customer service and order processing as the sale is done on this own site.
This is Dropshipping.
Which is better Affiliate Marketing or Dropshipping
Earnings: Drop shipping can give more than double the amount of profits than Affiliate marketing with little extra effort for sure. Customer service and Order processing might look difficult at a glance but if you maintain the order value more than 5 USD then these extra services are worth doing.
If the order value is less than 5 USD then try with Affiliate Marketing or go ahead with Dropshipping.
SEO: If you are good with search engine optimization then you fetch good enough traffic to your site. This traffic can give the sale of the products displayed. Such organic traffic is preferable for affiliate marketing. Dropshipping is based on paid advertisement than organic traffic. You can try ads with Google Ads, Bing Ads, Facebook ads, Pinterest, Guest Blogging, Banner ads, and gift card giveaway. You have to maintain a certain budget to promote your products with serval online channels.
If you have less budget and good with SEO try Affiliate Marketing. If you have a good budget and less knowledge of SEO then try Dropshipping.
Control: You neither have control over Affiliate products nor their commission. You have to keep on checking the status or availability of the product and their offers daily so you can update your site. Your blogs should be updated at a regular interval after checking the availability of the product. In Dropshipping you have control over costs to discounts of the product. You do not even have the country or location-wise boundaries to make a sale of the product.
If you to be in an I control environment then go for Affiliate Marketing or try Dropshipping.
Building Business: If you want to build your own business and brand then you should Drop shipping is a great idea. You can build your brand and sell it for a good enough amount. Affiliate sites cannot be sold. It is registered in your name and sites like Amazon don’t allow you to do the same.
DROPSHIPPING VS AFFILIATE MARKETING