Affiliate vs. Drop Shipping in 2021
Affiliate and Dropshipping are the two major groups to categorize most entrepreneurs.
Dropshipping: Items are purchased from a third party and shipped directly to the customer. You’re responsible for both marketing and setting the price of the product.
Affiliate: The merchants are in charge of the inventory and ship the products. However, they don’t set the product price and only receive a commission.
Dropshipping Vs. Affiliate Marketing
Dropshipping and Affiliate marketing are the two most profit making categories for marketers and sellers everywhere. Dropshipping means you neither have to carry an inventory or get involved in the shipping of the products. In Dropshipping, the manufacturer is the one who carries the inventory and ships it to the customer on your behalf. You are responsible for setting up the product price and marketing of the product if you are involved in dropshipping. Affiliate marketing is very similar in the sense that the merchant also carries inventory and ships the product. And even though you haven’t seen or used the product, you still are responsible for the marketing of the product. We will talk about the pros and cons of both dropshipping as well as affiliate marketing in detail in this article. Please read on to learn more.
Dropshipping Vs Affiliate Marketing: Similarities
Here are some of the similarities between dropshipping and affiliate marketing:
- Both enable you to profit without requiring an inventory or shipping products
- Both are known to be relatively low-risk business models because of the fact that they do not require you to store inventory or front a capital to buy products
- Earning potential of both is practically limitless
- Both require marketing skill sets like Ad creation, Ad campaign running etcetera
- Both businesses can be initiated with low startup cost and little effort
Pros of Dropshipping
- Low Risk Business Model
- Higher Margin that you can decide for yourself
- It lets you build your asset by building a brand or ecommerce website
- Multiple chances to convince a customer through retargeting the customers on your own website
Cons of Dropshipping
- You need to manage the customer support which can be a full time job in itself
Pros of Affiliate Marketing
- No cost for becoming an affiliate and starting business
- Great Source of Passive Income
- Parent company takes care of Customer Support so you don’t have to
Cons of Affiliate Marketing
- You only earned a pre-fixed percentage of the sale
- Payments can be delayed if minimum commission withdrawal amount is not met
- Affiliate links can be removed by others reducing chances of effective marketing
- You don’t have any say over the products or their pricing
As you can see, the pros of dropshipping clearly outweigh the cons, although the exact opposite can be said about affiliate marketing. Therefore, clearly dropshipping is much more profitable than affiliate marketing.