Yes, we are affiliate marketing ‘guys’ and this site teaches and provides services for affiliates.
But that doesn’t mean we’re going to favor one over the other in this dropshipping vs affiliate marketing.
We realize affiliates may not be everyone’s cup of tea, and that’s totally fine.
When it comes to learning how to make money online, both options are among our favorites.
In fact, affiliates and dropshipping make our top 5 list for online businesses to start in 2020 and beyond.
So we’re not going to debate and then choose one over the other.
Instead, we’re going to try and help narrow down which of these may be RIGHT for YOU.
By the end of this post, you’ll know which path makes the most sense.
Dropshipping Vs Affiliate Marketing in 2020
I’ve always felt that affiliate marketing is ideal for beginners.
To make money:
- You don’t need to create your own product
- Getting started is very affordable (Yes, you have to invest a bit of money)
- It can be a great intro to how online business ‘operates’ as a whole
The beauty of affiliate marketing is that it allows beginners to focus on how marketing and sales are made on the internet. You can profit from selling trusted, popular products and services.
Dropshipping takes a bit more tact, usually, but also can be great for beginners.
- The costs for products is $0
- No need to stock or ship any of the items out of your own home (unless you decide on taking the wholesale route).
It’s common for dropshippers to lean towards paying for advertising (cost of ads can tally up quickly) whereas affiliate marketers usually lean towards blogging (free if you blog yourself) as a way to attract traffic.
Notice I say usually. How you choose to bring in traffic to your business is totally up to you.
Most training on dropshipping won’t cover comprehensive SEO tactics or keyword research – most affiliate marketing training does.
We’ll explore dropshipping first and explain a bit more in-depth.
For now, just know that both have potential and can help you earn money online.
What is Dropshipping
You have wholesale – where people buy items in bulk for cheap and then sell the items for profit – then there are people looking to dropship.
With dropshipping you have someone visit your website where you have products on display that can be purchased.
When a purchase is made, the product(s) drop ship out of a warehouse and is shipped to the customer via a supplier.
Again, you will usually sell items for profit.
Tip: Creating a successful dropshipping store is all about creating a trustworthy brand. This includes fair pricing, abiding by a returns and refunds policy, offering quality products, and so on.
One of the neat and convenient things about both of these business models is that you don’t have to ship or stock any products yourself or spend a boatload of money on inventory.
In fact, you don’t HAVE to own the product yourself.
Tip: Actually owning or being familiar with a product you plan on promoting makes life much easier. You can take pictures or video reviewing the product, how it’s used, what it’s used for, etc. Your reviews will have a more authentic feel. Which instantly helps with overall credibility. If owning the product is not a possibility yet, it’s not the end of the world.
Don’t Waste Money Dropshipping
We’re not calling dropshipping a waste of money – but we did research a few points which we think could help you not throw money down the drain if wanting to start a new dropshipping store.
- Should you build your store or hire someone to do it for you
- How much you can expect to spend on ads to get people (customers) to your store
- Choosing suppliers that won’t rip you off
Should You Build Your Own Store Or Hire Help?
You have a couple of options for starting your dropshipping store.
Build it yourself.
Or have someone build it for you.
If you have someone build a website or store for you, make sure you can trust them.
It’s your business we’re talking about after all.
If you can find someone or a company that can set up a legitimate store for you and you have the budget for it, by all means, go for it.
Tip: If someone is willing to build you a website but is ultimately charging you to sell or dropship THEIR products or tells you “all have to do is link your bank or PayPal account” – you are more than likely being lied to. Building a profitable business takes a lot of work and is never as easy as “plugging in your PayPal” to make loads of money.
Doing it yourself can be beneficial as well as it gives you a chance to learn the process of building a store from the ground up.
You’ll learn how to choose quality products, how to set up a store, and other necessities.
Shopify, one of the best eCommerce platforms available, gives free trials followed by $25/mo fee and is a great place to start a store.
Again, we’re affiliate marketing guys, but based on much research it will cost about $500 – $1,000 to build a store.
This also includes a budget for early marketing for your store aka paying for ads. (Other worthwhile investments: professional logo, plugins like SMAR7, getting professional pictures of your product done).
Advertising may account for most of your budget.
Paying for ads on social media (like Facebook) or on search engines (like Google) seems to be the route most eCom stores take.
If you’re unsure about throwing money at a new store or don’t have the budget for it yet;
No worries, you have options…
You can use free methods to attract traffic like SEO, social media, or blogging.
But beware as these methods take a lot more time usually.
“Free traffic is slow”, paid traffic can produce results much faster but also poses more risks.
Risks of Running Ads
There’s no doubt that ads are effective – when done right.
Keep in mind that this article is for beginners who may be interested in getting involved with either drop shipping or affiliate marketing.
So it’s important to cover as many possibilities so that you don’t throw money at something you aren’t fully aware of.
Running ads or running a business that depends on ads has its risks:
- The risk of paying for ads “before you get it right”, if ever
- The risk of running a business that relies purely on paid promotion
There’s going to be trial and error. It’s a part of life and business. Just realize that you may “lose” out on money while testing your ad campaigns out before getting it right.
Next, let’s say you are running profitable ad campaigns – meaning you are making more money than you spend – that’s great.
When your business relies 100% on ads, you put your business at risk which isn’t always so obvious.
Let’s say you are doing very well with advertising on FB but suddenly they decide to shut you down, for whatever reason. Maybe it was a change in policy, maybe you violated one of the terms, whatever.
The point is you are now shut down and no new sales can occur because even though you found success in advertising on FB, this was your sole focus.
A logical move would be to just move on to another platform, like Pinterest, and try your luck there. It would also be really smart not to put all of your eggs in one basket to begin with.
Hey, shit happens.
I don’t share this to be negative and operating your online business in fear is no way to operate at all.
I just wanted to share some things a newcomer should be aware of.
If interested in learning how to grow your store without paying for ads upfront and using social media, seek out training on how to organically grow your dropshipping store. Try searching on Google.
Either method paid advertising or growing a store organically can be profitable.
When you take the time to build your store right or have it built for you by a trusted source, you may not have to advertise as much.
Some have even claimed to have made slightly less money while turning off their ads momentarily. Which resulted in more organic sales during that time.
Choosing The Right Suppliers
Let’s say I have an affiliate marketing site about lightweight bikes.
In this case, I may buy some of these bikes to review, for credibility, and take some awesome photos and videos of.
I bought these bikes (products) because I wanted to.
I would never pay just to be able to promote a bike. But I would pay for the bike itself for the reasons stated above.
Some dropshipping places will try to charge you in advance but there’s no need to.
Remember, with dropshipping, you can fulfill each order as they come so there’s no need to spend so much money upfront with a supplier.
One tip I came across advised ONLY working with suppliers who won’t charge you until you are sending them orders.
How Much To Start A Dropshipping Store?
We began to touch base on this earlier but it will cost close to $500 – $1,000 to build a store.
This includes things you need to get started like a “store/website builder” (like Shopify), and a budget for advertising to get actual people to your store. Once your store is fully set up, of course.
It will cost a bit more if you want a professional to build your store for you.
Remember, find someone trustworthy and credible if you decide to have someone build a store for you.
The goal for any online business should be to build and establish a profitable brand that offers a helpful product or service to their visitors.
Other Things To Be Aware Of
With dropshipping, you will inevitably have to deal with returns, refunds, and customer contact.
The same is true with affiliate marketing except you usually don’t deal with customers or refunds first hand, the merchants handle that for you.
At the end of the day, people are experiencing success with both business models.
Can you think of a few things which make affiliate marketing different from dropshipping? Share them in the comments section below.
We’d love to hear your thoughts.
A Quick Affiliate Marketing Backstory
I’ve been involved with affiliate marketing since 2015.
After getting started that summer, it took me somewhere around 15 to 18 months to begin earning money online regularly.
From having never made $1 online to earning a full-time income as an affiliate – you can only imagine my level of excitement and how proud I was.
“Something I created is generating money, even while I’m asleep sometimes!”
It’s pretty cool being able to say you make money online.
The results I’ve experienced obviously took tons of time, learning, and effort.
And it hasn’t always been smooth sailing as I’ve had my share of mistakes, money wasted, and opportunities missed.
I’ve got nothing to sell here, just wanted to share my story and help you realize your goals through internet marketing.
Regardless of the path you decide on you too can experience similar results, and then some!
What Is Affiliate Marketing?
I’ve always defined affiliate marketing as a way for websites to make money.
Same as dropshipping.
With affiliate marketing, you can earn commissions by recommending other people’s products or services.
All of the shipping, payment processing, returns, refunds, is handled by the merchant or owner.
You earn simply by recommending products people may have already looking for.
Example: If I were looking to purchase a new laptop for a child and was unsure where to start, like most people today I would go to Google and type something like “best laptop for kids” to begin my search. When you search a “keyword” like this, you will encounter affiliate sites all over Google. You make a purchase, the affiliate site gets a commission of that sale.
How much you earn as an affiliate depends on the affiliate program you join and how their commission payout structure is set up. I’ve seen between 5%-75% of the sale for affiliate commission.
There are affiliate programs for everything and no shortage of products you can recommend.
Succeeding as an affiliate is as simple as recommending products you use and find awesome yourself or products you know will help your audience.
You can create an affiliate site about anything.
My personal experience with dropshipping has been limited. I’ve bought a course or two which teaches dropshipping due to curiosity.
One of the courses relied heavily on using social media to get customers to your store early on, which I found interesting. It can save you a whole lot of money in advertising.
Affiliate marketing is the path I chose awhile ago and it’s worked for me.
I think it’s important that you do the same.
Choose one path and stick with it.
If a year goes by and you’re not making much traction, if any at all, it may be time to look at what needs adjusting or trying something new.
Believe me, you can get a lot done in one year’s time.
So don’t wait.
If interested in either of these business models, seek out some training on how to get started.
If interested in either of the affiliate marketing resources (including the training & community that I’ve been a part of for the last 5 years to help me grow), let me know in the comments below.
Also, I’m willing to share the training and other resources I’ve found helpful when researching how to dropship.
Just ask and I will either update this post or simply reply to your comment!
Regardless of which business model you decide to pursuit affiliate marketing or dropshipping or something completely different, what’s most important is choosing one, taking action, and focusing on one business, store, or website at a time.
Affiliates usually take the route of utilizing SEO to rank their content in Google and get visitors to their website, at which point purchases can be made.
Dropshippers usually start out with a bigger budget for advertising and building a virtual store.
There are no rules to how you get people to your store or website, but it is likely if you follow training for affiliate marketing, you will be taught SEO. And paid ads for dropshipping training.
The business model which is best for YOU greatly depends on things like your budget, time availability, and honestly what interests you the most.
We primarily utilize affiliate marketing as a way to make money online but just know that there are other great online business models that can help you earn some serious money from home.
What are some of your favorite business models? What has worked for you? We’d love to hear from you below.