Affiliate Marketing Vs Dropshipping: What Business Model is Better in 2024?

Affiliate Marketing Vs Dropshipping

There are many ways to make money online and people usually think of either a job or a business. In recent times, a source of passive income has been doing rounds which proves to be important and necessary. When we talk about passive income dropshipping businesses, online stores, affiliate marketing, blog writing, and retail stores are some examples to start with. However, the current market scenario focuses on affiliate marketing vs dropshipping as these two have been owning the top spots in generating passive income.

In this blog, we will be putting dropshipping and affiliate marketing on opposite sides and will learn about the pros and cons. We will also know by the end of the day, which of the both is better for the coming year 2024. Will it be Affiliate Marketing or Dropshipping Business?

What is Affiliate Marketing?

Affiliate marketing is when a business owner promotes its products or items with the help of a specific brand or influencer. In other words, we can say that affiliate marketing is a way for businesses to pay people to promote their products or services. It is seen that Instagram is the perfect social media platform to promote one’s brand. It is seen while promoting a product, that the product link and the store link are tagged in the reel, post, or video on the promoter or influencer page. The link is UTM-tagged and it is tracked also.

Affiliate Marketing is based on commission and in most cases it is a low-profit and low-cost business model. The commission is received by the influencer or the affiliate when a sale is made through their posted link.

Pros of Affiliate Marketing

Being an Affiliate is Free

There is very little to no pay to give to the affiliate as the merchant is usually covering the fees in terms of Clickbank or Amazon Associates. The payment that an Affiliate pays is for its website and server which is also less. The marketing cost is covered by the affiliate marketer as they drive traffic to the merchant’s website.

Great Passive Income Source

Passive income is the need of today as more people are looking forward to an extra source of income. You don’t have to worry about creating the product or shipping it. When you become an affiliate marketer all you have to do is to work on the marketing strategies and content that will end up in a sale.

Not to Worry About Customer Support

The best part is that you don’t have to worry about customer service or support. Your job is to send targeted traffic to the seller’s landing page. Only the sales leads are supplied to the seller which is why the affiliate is not a product expert.

How to Sign Up for Affiliate Programs?

It is not a difficult task to find affiliate programs to join. Following your niche, you should research the products that you are comfortable promoting and the next step is to look for ecommerce stores that have these products. Once you have the website or the ecommerce store then look for the “Partner” program.

If they don’t have a partner program then it is best to drop an email to the online store asking about the joining of the affiliate program. Include a clear intention about the products you want to promote.

There are larger affiliate networks where the program can be joined. This is mostly a good option as all you need to do is to sign up with the network and you will be given access to many more affiliate programs to be included in.

What is Dropshipping?

In a dropshipping business model, the products are sold on the website directly from the suppliers without keeping the inventory. When an order is placed on the website, it goes to the supplier. The supplier then fulfills the order from their side and delivers it to the customer. The business owner does not have to maintain the inventory at all.

The difference between retailing and dropshipping is storing and purchasing, besides is exclusively online. Regular or retail shops buy products in bulk and then promote them manually to make a sale but in dropshipping, you need to have an inventory as it will be of the supplier.

Dropshipping is a kind of business model for those who are experiencing dropshipping ecommerce for the first time. It is a good option for those who want to test products in different categories before making it big in their preferred niche. The flexibility and ease of location play a major part in dropshipping as it can be taken as a full-time or part-time business depending on the need.

Pros of Dropshipping

Low Risk Business Model

If we compare dropshipping to affiliate marketing then it is comparatively a low-risk business model. In dropshipping, you gain access to the money that you have earned. Whereas in affiliate marketing, there is a possibility that you may have to reach a milestone to cash out your earnings.

Have High Profit Margins

The dropshipping business is known to generate higher profit margins. The amount at which you purchase the product from the supplier and the amount at which you sell to the customer after adding your margin, marketing cost, and other additional costs can be decided by you at a good profit margin. You can also calculate your profit margin with our dropshipping profit calculator.

Strong Customer Base

Affiliate marketing is sending traffic to another online site, on which you have no control if you want to retarget. Dropshipping brings the traffic to your website and the checkout will have your branding on the product and link. You have the freedom to design your website as per your choice by creating compelling landing pages, product descriptions, titles, and more.

How to Find Dropshipping Suppliers?

It’s very important to look for reliable dropshipping suppliers. Inventory Source will become a partner in your dropshipping business as we have the best and most reliable suppliers that have high-quality products for the customers. We bring you the best because we know that your brand’s reputation is at stake.

Once you are connected with one of our integrated suppliers then you will know how seamless and smooth the process is. If you are looking for dropshipping suppliers then Inventory Source is the best place to look for. We are good at what we do so there should not be any problems.

Feature Comparison of Affiliate Marketing & Dropshipping.

Now as we move ahead, we need to understand that features comparison for both affiliate marketing and dropshipping.

Sale of Products – Dropshipping businesses sell products in their own stores, but don’t own them. Affiliate marketers promote product links and earn commissions on sales.

Launch Time – Affiliate marketing is a quick and easy way to start a business if you have a blog with high-ranking articles and a loyal following. However, it can be time-consuming if you don’t have either of those things. Dropshipping is a less time-consuming way to start a business, as you can drive sales with paid advertising the day after you launch your store.

Startup Cost – It is possible to start affiliate marketing and dropshipping with little to no money. With dropshipping, you do not pay for products upfront, only after you have received an order. Additionally, most affiliate programs are free to join. However, there are still some costs associated with these businesses. The most common way to do affiliate is to do product reviews or comparisons of affiliate products.

Business Control – Dropshipping and eCommerce offer more control over your business and earnings than affiliate marketing, as you set the profit margins for your products. Affiliate programs have fixed commissions, giving you less control and requiring you to rely on someone else’s product and business.

Customer Service – One of the key differences between affiliate marketing and dropshipping is how you handle customer support. Customer support is important for any online business, but if you don’t want to deal with it, affiliate marketing is a better option. When you sell products through affiliate networks, the networks handle customer support. You simply promote products using affiliate links, and you receive a commission when someone clicks on your link and makes a purchase.

Which is a Better Business Model in 2024?

In affiliate marketing vs dropshipping business, it is very difficult to say which one is better for the coming year 2024 as it depends on the budget and the online business budget.

People who like creating content, and SEO, and like keeping it that way will choose affiliate marketing. This is also a good option for those who have a good social media following. For YouTubers, it’s also a good option as they would be adding revenue to their business. Affiliate marketing is a low-risk business model that is good for beginners as the only thing needed is having good resources to start with.

For people who have less capital to start a business, they go for dropshipping. There is little work involved that requires strategic marketing planning to begin with. People who are not willing to maintain and manage inventory and other connected aspects are opting for the dropshipping business. With the involvement of customer service, it becomes a bit more work but it comes along with the benefits. Although it takes a little bit of capital to start a dropshipping business, once it goes through the hurdles, it starts giving profitable returns.

Which is More Profitable?

Dropshipping and affiliate marketing have many differences but they are similar in many ways. Let’s list the outcome to have a better understanding:

  • Both can be started without the inventory requirement and shipping goods.
  • You don’t have to invest a lot of money to get started.
  • Both have a high potential of making money.
  • It’s almost immediately that you can start working on your business.
  • Some of the skill sets required in both businesses are the same like creating ads.
  • Both have lower start-up costs.

But which one is more profitable? 

Dropshipping and affiliate marketing are both profitable business models. You can combine them by adding a store to your affiliate website or starting a private-label dropshipping business. This will give you more choices to offer your audience and help you earn money from both commissions and sales.

How Can You Start Dropshipping?

It’s not easy to start a dropshipping business unless you have a reliable partner like Inventory Source. As a business owner, you will get several trustworthy suppliers and wholesalers that are pre-integrated with us. All you have to do is decide your niche and select a supplier. After that, you can select from the list of high-quality products that you can dropship. Let’s connect today and give a kick-start to your dropshipping journey.

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Affiliate Marketing Vs Dropshipping FAQs

What is more profitable dropshipping vs affiliate marketing?

Dropshipping typically offers higher profit margins than affiliate marketing, as you directly sell products and retain a portion of the sale, whereas affiliate marketing earns commissions on sales but typically at lower rates.

How does the process of earning commissions through affiliate marketing differ from the profit structure in dropshipping?

In affiliate marketing, you earn commissions by promoting and selling other companies’ products, while in dropshipping, you make a profit by selling products from suppliers at a markup.

Can I do both affiliate marketing and dropshipping at the same time?

Yes, you can combine affiliate marketing and dropshipping in your e-commerce strategy to diversify income sources and maximize profit potential.

Which one is easier to make bigger profits, affiliate marketing or dropshipping?

Dropshipping generally offers more significant profit potential due to the ability to set your product prices, but success depends on factors like niche, pricing strategy, and supplier relationships.

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