Why affiliate marketing is better than drop shipping? Affiliate marketing and drop shipping are both business models where you can earn money selling other people’s products.
Drop shipping is a selling method where the store that the sellers run doesn’t keep the product in stock, but when the customer orders the product the seller will buy the product from a third party. Then they have them send the product directly to the customer.
Affiliate marketing is simply a process of promoting other people’s products in exchange for a commission when people buy the product through your unique affiliate link.
Both business models heavily rely on online marketing strategies to find customers for products and services.
Why Affiliate Marketing Is Better Than Drop Shipping
Both business models are similar. However, with drop shipping you will need to deal with customers, since you’re running a customer facing online e-commerce store (or online shop). Drop shippers can set their own prices and so long as they make sales, this can mean they can earn more per sale compared with certain affiliate products. Affiliate marketers have less control over pricing of the products they choose to promote and commissions are set by the product owner/s.
However, affiliates can decide which products and services they choose to promote. This more than makes up for the shortfall and affiliates can choose to promote products which carry residual income and high ticket commissions. Recurring income affiliate programs pay out over and over again for individual sales. High ticket affiliate programs offer larger than average commissions.
If you’re an affiliate you don’t have to deal with customers. You simply refer them to the product directly through your affiliate link. If you make a sale, the product is delivered by the owner not you. With drop shipping you will need to arrange delivery of the product from the third party. Should there be a problem with delivery of a drop shipping product, you’re culpable to the customer! With affiliate marketing you don’t deal with deliveries. However, should a customer request a refund, you’ll bear the cost!
Cost
With drop shipping you’ll need your own e-commerce website and customer services. This can mean a greater cost. With affiliate marketing you can get started for next to nothing.
There’s lot of competition in both drop shipping and affiliate marketing, but with drop shipping you’ll need to build a brand, which can be difficult. Your website will be showcasing your products with drop shipping and it’s important to get this right. In addition you have no control over your supply chain as a drop shipper. Should something go wrong, it’s on you!
As an affiliate there’s a variety of ways you can promote affiliate products. Affiliates can use many platforms to get their message in front of an audience and this suits more people. Some affiliates like blogging, and others use email marketing. Some use paid marketing and others use social media.
Affiliates benefit from a more hands off approach than drop shippers. They can build their affiliate business in a variety of ways. They don’t have such a hands on need in their business and can work whenever and wherever they choose. With drop shipping you’ll need to be on hand when someone makes an order, or employ someone who can offer customer support.
Affiliate Marketing Or Drop Shipping?
It’s difficult to say which is the better model between affiliate marketing and drop shipping. Everyone is different and it really comes down to personal preference. However, I do believe affiliate marketing offers some huge benefits to drop shipping:
- It’s more hands off
- You have more choice in how you run your business
- No customer services needed
- You can work as a blogger, video marketer or social media influencer, or build an email list or work on social media sites
- It’s cheap to start – much cheaper than drop shipping if you choose a free marketing method
- Simply refer people to products with no need for personally fulfilling orders
With drop shipping you need a strong brand or online presence. You personally take orders from a website and while this can give you more pricing control, it also means you dealing with customers. You have no control over the supply chain so if there’s a problem you have to deal with it!
Both business models rely heavily on online marketing. So success with either model will depend heavily on your ability to find customers with your online marketing methods.
Learn more about the various online business models in this free video series.
See also affiliate marketing vs drop shipping.