- 1 Affiliate Marketing vs Dropshipping Which Is More Profitable?
- 2 WHAT IS DROPSHIPPING? DEFINITION AND ADVANTAGES
- 3 WHAT IS AFFILIATE MARKETING? DEFINITION AND ADVANTAGES
- 4 BY WHICH TO DECIDE: DROPSHIPPING OR AFFILIATE MARKETING
Affiliate Marketing vs Dropshipping Which Is More Profitable?
For an entrepreneur who knows the basics of the online world and works hard, having an online business is a good way to earn money quickly and without too much dedication. Therefore, many people have started selling & buying their own products This type of e-commerce is, mainly, a secondary income entry with which to get extra income without having to devote a lot of work to the month.
When you open an online store, the problem of stock usually appears. Having a store requires purchasing products, storing them and managing shipments, which can give us more of a headache while requiring more investment. Aware of this problem, several companies have proposed solutions to facilitate online sales to these entrepreneurs. Of these proposals to sell online without stock, there are two types that are the preferred ones: drop shipping and affiliate marketing.
In the dropshipping, it is the wholesaler who sends your products to your customers and saves you to need to manage them yourself. In affiliate marketing, you help brands to promote their products and receive a commission for the sale, without having an online store (with a blog or a profile on social networks is enough!).
Many people who think opening an online store without stock end up coming to these two options. In this article, we will analyze both and see the advantages and disadvantages of each.
WHAT IS DROPSHIPPING? DEFINITION AND ADVANTAGES
Dropshipping is a distribution model involving three agents: 1 final buyer, 2 owner of the e-commerce distributor and 3rd wholesaler. In this strategy, the distributor promotes the products of the wholesale supplier to its online store. When the final consumer buys something, the owner of the e-commerce passes the order to the wholesaler. Then, the wholesale supplier sends the product directly to the final customer. In this way, it avoids the e-commerce owner any problem related to provisioning, storage or logistics.
The dropshipping is a very good option if you do not want to worry about the stock since all you need to do is pass the order to your dropshipping provider and he takes care of everything else. In this type of strategy, your income will be the difference between the reduced price at which you buy from the wholesaler and the final sale price at which you offer your items. In the dropshipping, the margins are not especially high since your supplier facilitates many managements. Therefore, it is essential to bring a lot of traffic to your store to get many interesting sales and revenues.
If you decide to start working with a dropshipping provider, your initial and a most important task will be to choose a trusted company and close a distribution agreement. Many wholesalers require an entry fee or a monthly fee, so you should consider that expense. We recommend that you look for a supplier with a wide catalog and that you deliver to different countries. In this way, make sure that if your business grows, your provider will be able to face your new needs.
BENEFITS OF DROPSHIPPING
You just focus on what is important. The dropshipping provider will handle everything related to logistics, which gives you more time to bring traffic to your store and of course, sell everything possible.
Packaging and deliveries are also managed by the supplier. You as a distributor, do not have to worry about this. It is the job of the wholesaler to make sure that your client’s order arrives on time and in good condition. In addition, the item will be packed in a package with your name and address, and the wholesaler will not be referenced anywhere.
The dropshipping providers have huge warehouses and very extensive catalogs. This makes your store fully scalable. If you sell, for example, perfumes, you can expand your catalog with a couple of clicks and start selling cosmetic products without changing suppliers.
The wholesaler is responsible for having an updated catalog, with descriptions and photographs suitable for each product. However, we recommend that you slightly modify the descriptions of the tab of each article to prevent Google from penalizing you for duplicate content.
If you decide to work in dropshipping, your first investment will be much lower than in a store with stock. You do not need a warehouse and you will not have to buy the stock until you receive an order in your store.
WHAT IS AFFILIATE MARKETING? DEFINITION AND ADVANTAGES
In an affiliate marketing is an agreement in which you promote the product or service of a third party through the Internet. You can promote it through any channel (your website, your blogs, your social networks) and, when you get a sale, you take a commission. But let’s take a closer look at how it works:
If you already have a website or you are a well-known figure online, you already have a lot of livestock. If on the contrary, you start from scratch, we recommend that you look for a niche market with little competition and that you start to build a community. Once you know what you are going to talk about, you must register as an affiliate on a platform such as Amazon. Most websites do not charge anything to make you an affiliate, so beware of fraud.
Once you have registered as an affiliate, choose the products and services you want to promote. Each one of them will have specific conditions, and they will offer you a personalized URL to promote them and get sales. You will have to share that link and if someone clicks on it and makes a purchase, you will receive a commission.
Affiliate marketing is one of the best ways to make money online without investing in stock because you do not have to sell your own products.
ADVANTAGES OF AFFILIATE MARKETING
- As with dropshipping, you do not have to have stock.
- There are no barriers to entry. Registration as an affiliate is usually free.
- The owner of the products is responsible for everything related to fulfillment and logistics.
- If you do not like the commission offered or the deal with the company you promote, you can always change to another that appeals to you more.
BY WHICH TO DECIDE: DROPSHIPPING OR AFFILIATE MARKETING
For entrepreneurs who are thinking about starting an online business, both options are quite interesting. However, many times, they opt for dropshipping because of the greater control that it offers. This is due to several reasons:
- By having an own online store, you are the one that chooses the sale prices and the one that marks the rules. Instead, as an affiliate, you are at the mercy of the decisions of the company you are promoting. These specifications are usually fixed and without negotiation margin.
- Last but not least, dropshipping is your brand that comes out reinforced. When you work as an affiliate you are making another company known and not your own. Therefore, if a user reaches them through your page, it is likely that the next time you go directly to your website and you no longer receive a commission. On the other hand, with the dropshipping it is your e-commerce that sells, and the wholesaler has no visible presence in the transaction with the final consumer.
For these two reasons, there are many who prefer to opt for dropshipping and set up their own online store. However, if you prefer something simpler, even if your benefits are lower, affiliate marketing could be the best option for you.