Home > Home Based Business > Affiliate Marketing vs. Drop Shipping: Which One is Right for You?

Affiliate Marketing vs. Drop Shipping: Which One is Right for You?

by Kirsty

drop shipping vs affiliate marketing

If you want to work online from home, both affiliate marketing and drop shipping can provide you with a steady income. However, these two industries have important differences. The key to success is figuring out which one will work best for you.

With affiliate marketing, you have a relationship with a company. Your website promotes their product or service. Anytime your marketing efforts lead to a sale, the company will give you a commission that they’ve set in advance.

With drop shipping, you sell products yourself, but they are actually shipped to your customers directly from the manufacturer. Many manufacturers love drop shipping, because online retailers are like another salesperson.

Neither industry requires very much in the way of set-up or operating costs. In fact, you do not even need to hire any employees if you don’t want to! The work can all be done online, right from your house. Plus, since you are not the manufacturer, you do not have to worry about customer service issues or technical support.

But, there are some differences between affiliate marketing and drop shipping, and it’s these differences that can help you decide which industry is right for you:

– In affiliate marketing, you do not control how much money you make; all of the commissions are determined by the company – not you. With drop shipping, you can set your own prices. Your profit is the difference between the manufacturer’s price and your own, so it’s up to you to figure out how much of a mark-up you can get away with.

– In affiliate marketing, you are not actually selling the product; you are simply encouraging people to head to the company’s website and buy something. That means you have to rely on the company’s sales copy just as much as your own. Plus, if the company suffers any technical problems (like a website that crashes or doesn’t work properly), it can hurt your profits. When it comes to drop shipping, your site is the site people make purchases on. You do not have to rely on any other site to make sales.

– Drop shippers have to set up their own ecommerce websites, complete with product descriptions, online shopping carts, and payment processors. Affiliate marketers can get away with just having a single landing page if they want. Since they are not the ones making sales, affiliate marketers do not have to worry about accepting credit cards or maintaining a big retail website.

Article by

Kirsty LaVier is editor for Shopping Cart Reviews, the leading site dedicated to helping you find the shopping-cart-reviews.com.

Kristy has written 1 articles at iBlogzone.com

1

Michele Welch

November 22, 2010 at 6:47 pm

Hi Kirsty,

Great explanation on the differences. I’ve considered drop shipping in the past. I always like the idea of having an online business yet not have to deal with inventory, shipping, and all the over-head costs that come with storing your own products.

Although, I gear more towards AM, I haven’t given up on the idea of drop shipping, especially good if you are proficient in SEO and can drive a lot of traffic to your site.

Thanks for sharing!

2

Kirsty LaVier

November 23, 2010 at 3:36 pm

Hi Michele,

I’m glad you’ve found the article useful. Not a lot of people are aware of drop shipping so I figured this would be a great topic to tackle. Both affiliate marketing and drop shipping have their benefits and drawbacks, so those who want to work from home can consider which of the 2 would work for them.

Kind regards,
Kirsty LaVier

3

Murlu

November 23, 2010 at 1:00 am

There’s a lot more potential to grow a real business overall when you’re drop shipping because once someone buys an affiliate product, it can be difficult to keep them in the fold but when you build a solid business offering physical product; people generally keep you associated within that niche – not someone who may bounce product to product.

Additionally, you can always turn your niche blog into a a dropshipping business πŸ˜›

4 Sire November 23, 2010 at 1:22 am

I suppose that the one advantage and affiliate may have is when your able to sign up other members under you, thereby earning a percentage of their sales.

If I was to ever try drop shipping I would have to physically try the products first. I sure don’t want to be associated with any crappy merchandise.

5 DiTesco November 23, 2010 at 2:14 pm

You are on spot on that one Sire and maybe one of the reasons why “drop shipping” has not turned out to be that popular (yet) amongst the blogging community.

6

Kirsty LaVier

November 23, 2010 at 3:39 pm

I agree with you Sire. Aside from the drop shipping needing a lot of extra work on your site, it’s better to try the products yourself.

7 Sire November 24, 2010 at 3:06 am

Heck Kirsty, I reckon I’m bound to be right every now and again. This is one of those times πŸ˜‰

8

Rahul

November 23, 2010 at 12:21 pm

hi kristy, this is first time i’m reading your article. the term drop shopping was totally unknown to me and from your post i’ve got a very important info about drop shopping. i think in some cases affiliate marketing is good, because many of them pay only for traffic but drop shopping needs sale. but it’s a new opportunity for us and it gives us to set up our own business. it sounds very cool. thanks for sharing and hope many nice upcoming article here from you.

9

Kirsty LaVier

November 23, 2010 at 3:42 pm

You’re welcome Rahul. I’m glad you learned something new with this article. Yes not a lot of people know about drop shipping, but it’s something to think about if you want to have a different way of earning online.

10

Evan Schulte

November 23, 2010 at 3:39 pm

I think which way you would go would be if you have a product to sell. I know some people love the products they use on a daily basis, and would love to give it to the world, but it is harder to set up an ecommerce site.

11

Alvin

November 23, 2010 at 6:14 pm

you would if you have a product. If I was to ever try drop shipping I would have to physically try the products first. I sure don’t want to be associated with any crappy merchandise. i think its best for whom who are good in seo and can drive a lot of traffic.

12

Josh

February 1, 2011 at 9:34 pm

Hey Kristy, im quite interested in drop shipping and would like to get into it. however i am new to the internet marketing what would be the best way to start and get something going?
thanks
Josh

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