Dropshipping Vs Affiliate Marketing. Many people are confused about where to start. They have many similarities yet they are different. Both have unlimited earning capabilities and require similar efforts in setting up but still differ in many ways. Both are dependent on external factors in terms of product handling yet differ in fulfillment. So which is better?
I know you are eager to find out the answer and I usually give the answer after comparing all pros and cons, but not today. The answer is both are the best options and I can’t really pinpoint one over the other. But……
But…. Things are different in 2020. The corona epidemic which was limited to Wuhan, China has become a pandemic across the globe. It is threatening to collapse the global economy. With this corona present, which one you should be choosing?
Well, let’s find out. Before starting, I presume that you know what is dropshipping and affiliate marketing. For those who don’t know let me explain them briefly.
In dropshipping, you find sellers selling multiple products related to your niche at an extremely lower cost. You then add up the markup cost and sell the product on your website. Seller will fulfill the order in the backend and you will bag the difference between the actual cost and markup cost. See the flow below.
In affiliate marketing, the flow is similar but the cost of the product doesn’t change. Seller will fulfill the order and give you the commission for selling.
Before I jump to the effect of corona pandemic on both, lets briefly evaluate the pros and cons of both.
Similarities Between Dropshipping & Affiliate Marketing
- Both are easy to start at a comparatively low cost.
- You don’t need to stock up inventory
- You don’t need to handle the shipping
- The marketing aspect is exactly the same. After all both deal with selling something online.
- Both of them have the high earning potential.
Advantages Of Dropshipping
Though both of them deal with selling products, they both have specific advantages. Here are the advantages of dropshipping.
- You can create your own brand by selling the products. There are vendors who can sell you white label products.
- You can set your own prices for the product. In other words, you decide your profit in dropshipping
- You get the payment upfront. There are no delays.
Advantages Of Affiliate Marketing
And here are the advantages specific to affiliate marketing.
- Customer care is not your responsibility. Product refunds, customer queries are handled by the product owner.
- Technically you can start affiliate marketing with zero investment. You may not even need a website.
- A lot of affiliate networks exist with commissions up to 75% of the product costs. Everything from the order placing to getting commission is fully automated. In most cases, you don’t even need to deal with the product owners.
- No need to integrate the payment gateway. If you were a drop-shipper from a third world country, you will know the difficulty of setting a global payment gateway.
Disadvantages Specific To Dropshipping
And then there are a few disadvantages too.
- Most of the drop shippers source their products from china. That means delayed shipping time. Sometimes it can take over 30 days for the delivery.
- You need to find trustworthy vendors and deal with them personally for white label products. This can be difficult as initially, you can communicate through emails only. They may not entertain you till you become a big customer for them.
- You need to handle customer queries as you are the product owner for your customers.
- Keeping track of product quantity and fluctuating costs manually can be a challenge. There are paid solutions to take care of that but initially, it may be out o budget for many drop shippers.
Disadvantages Specific To Affiliate Marketing
These are a few disadvantages of affiliate marketing.
- You cannot create your own brand. In other words, you won’t get white label products for affiliate marketing.
- You can’t control the price and commission of the product.
- The commissions may be delayed, especially when you are new to the affiliate marketing world.
Corona Pandemic Impact On Dropshipping & Affiliate Marketing
Corona has been hitting the world since Dec 2019. It has forced a shutdown in many countries. International travel is almost negligible.
Corona originated in china. Many vendors for dropshipping are from china. Factories are shut down in China and at this moment it is cannot be estimated when they will re-open. Even if they open it will still be a problem due to reduced international shipping. Shipping durations for dropshipping were usually delayed even when there was no corona. Now it has impacted the delivery times beyond an acceptable limit. Many drop shippers had to cancel the orders and provide the refunds.
Fortunately, affiliate marketing is not dependent on China. In most cases, the products are shipped locally. In the case of software affiliate products, they are not even dependent on physical shipping. Thus, affiliate marketing is not hit badly by corona.
What Should I Do During This Corona Pandemic?
Well, the answer is not very straightforward. It depends on a lot of ifs. Let me try to cover those ifs in this section. Depending on your choice of if, you can select between dropshipping & affiliate marketing.
- If you are an existing drop shipper, you can stick with dropshipping and wait for the situation to improve. After all, this pandemic is not going to last forever.
- If you are an existing drop shipper and want to learn and implement affiliate marketing as a side business, you can do it. In fact, I will encourage all drop shippers to get started with affiliate marketing as a side hustle. This is a great time for that.
- If you are just starting and yet to decide between dropshipping and affiliate marketing, then I will definitely recommend Affiliate marketing
- If you like to get payment upfront and ok with handling customer queries, disputes, anger, refunds, returns, etc. then you can start with dropshipping.
- If you like the peace of mind and ok with little delayed payment like me then you should stick to affiliate marketing.
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