Affiliate marketing vs Dropshipping:Which one is better?
When it comes to start a buiseness online or you just want to make a passive income online, the two of the most popular ways come among us and that are affiliate marketing and dropshipping
And alot of us get confused that which one is better to start? what is the difference between them? Which one is more profitable? Which one is cost effective? And whether they still work or not?
If you are the same person who are looking answers to these questions then you will find all your answers in this blog post.
First i will briefly explain what is affiliate marketing and then what is dropshipping
What is affiliate marketing:
Affiliate marketing is a method in which you promote other people products and you get a certain amount of comission when you make a sale. The comission can vary accordingly to the vendor some pay 20%, some 30% and it can even go upto 50%.
For example if you sold a $100 product and the comission is 50% then you get $50, and if the it is 30% then you get $30, and on and on, hope you get it
What is Dropshipping:
Dropshipping is the method in which you take a product from a wholesaler usually aliexpress and you list it on your website for a higher price, So when you get a sale you make the profit set by you. For example if you select a shirt from ali-express for $1 and you list that shirt on your website for $5 then if you get a sale that $4 is your profit .
I hope now you have the clear idea of what is dropshipping and affiliate marketing now lets move towards the difference between them
1- Profit margin
I think the first difference woukd be obvious to you , that in affiliate marketing you can't select your own profit margin, The profit margin has been decided by the vendor.
But in dropshiiping you can select your own profit margin, according to your needs.
2- Cost Analysis
To start Dropshipping you have to pay for hosting and a domain usually people start from shopify which has a $14 per month subscription, and the doamin may cost $10 per year, that is pretty much it, to start
Now when you have started your store, there are two ways you can promote it, one is the free methods that you share it with your friends and told them to share it , so you can get some sales initially.
And the other method is the paid one which involve facebook ads, youtube ads, pinterest ads and etc. But the most popular among them are the facebbok ads. Now you can start facebbok ads from $5 per day, But as the competition is rising day by day , i would recommend you to start with $10 per day. So that you could have more reach
So if we calculate monthly expense for dropshipping, if we go for free methods then it is $14 per month and if we go for paid methods then $10 per day makes $300 per day and by doing total it becomes $314.
Now lets come to affiliate marketing. As to start affiliate marketing we don't need to buy any hosting or domain , but its free to start we just have to create an account on the relevant affiliate program, and that is it to start
Now there are also two ways to do affiliate marketing, one involves the free methods and the other are paid methods, which are usually the same as dropshipping
So at the end if we compare the costs between both of them it is pretty much the same, There is only a margin of $14 , Which in my opinion is not that much.
3-Which one works better
In Dropshipping you can get orders easily but you must need to have an app which is called oberlo. This app makes your payment the double way, which means that someone will place an order on your website but oberlo will take that order and the payment details and put it on ali express. Now this is an hectic process because the app works fine, but not all of the times
Sometime the app will stp working and it wouldn'y place an order, which means a delay in the order. This is the first issue in dropshipping.
The second issue that can arise is the shipping time , As to get shipped from china it involves almost around 14-15 days and that is to much timeYour clients will be getting pissed at you , and the possibilities are that they will cancel the order, which means that your store will have a negative review.
you may be thinking that in dropshipping you have the advantage of setting up your own profit margin, But that is really not an advanatage. As yu can only set the profit margin according to the market price.
For example if you have selected a product for $1 on ali-express and you sell it for $10 on your website and your competitors are selling it for $4 , then your product will obvioulsy not sell. So you can only sell the product at the current market price.
Now when we see at affiliate marketing you don't need to use any oberlo type app. you order will be placed directly through your link. And most of the products in affiliate marketing are digital which means that you don't have to worry about the shipping time, they will be delievered as soon as the payment is done.
There are also digital products in affiliate marketing, but you still don't have to worry about the shiiping time that is up to the vendor. Though you cannot select thre profit margin by yourself , but the profit margin is enough if you choose the right affiliate programs for example some of them are
-Share a sale
These pay up to very good amounts. Clickbank can even pay upto 75% of the affiliate comissions which means you earn more money from the vendor.
affilate marketing is even more easy to start, you don't need a website as you just have to create an account and you can get started and it also sells very well because there is already ad copies written for you and the sales pages are already made for you, you just need to basically copy and paste, to get a sale.
While in dropshipping you have t create your own ad copies , which is not an easy job and you will have to test many ads to select the best ad that performs well for you , which can cost alot.
As from the above article i think that affiliate marketing is way more better than dropshipping. As i don't mean that people don't make money with dropshipping, but with time dropshipping has come to an end.
Because more of the people have opened their own e-commerce stores. which are more profitable.
But that is another topic, the point here is that affiliate marketing is way more better than dropshipping. And it is my recommendation that you should start with affiliate marketing, if you are just starting online
And if you are serious about affiliate marketing, do check our join us page
I hope you liked the article.