Both opportunities are in fact relatively similar. The business models rely on selling someone else's products, that you don't have to buy or stock before you can sell them, and once you have a customer, the product owner ships the item direct to them.
On the face of it then, as long as you can find buying customers, they both seem like easy enough ways to start your own business. But there are some key differences that could make dropshipping the preferred option.
Getting started with dropshipping or affiliate marketing
Whether you choose a dropship or affiliate marketing business, getting started is quite straight forward. There are no huge set up costs, or investment in premises and stock; all you need to find is a reliable supplier, who will provide you with the items you want to sell, in a way that means you will make some money.With so many major retailers offering affiliate schemes, including Amazon, eBay and many more, finding a reliable program with the products you want to sell, shouldn't be too hard. Sourcing drop ship products could require a bit more investment in terms of time and effort, to make sure you get a reliable supplier who will offer you a decent price.
Differences in running a dropshipping or affiliate business
While getting started with affiliate or drop ship products may seem similar, how you will run your business will need to be quite different. With a dropship business, you have much more responsibility. You own and manage the relationship with the customer, so if there are any problems with faulty items and late deliveries, it's up to you to resolve them.Looking at the positive side though, you have much more freedom to negotiate prices and agreements with the supplier of your drop ship products, hopefully benefiting from what should be more of a partnership.
With affiliate marketing, you have to simply accept whatever agreement the merchant is offering, there is usually very little, if any, flexibility. The only way you can improve the commission you are paid for selling the merchant's products, is by selling more and more of them, so you are rewarded with a higher percentage of each sale.
However, you don't have to deal with any of the customer service issues that some dropship businesses have. Rather than the customer buying from you, you are directing them to the merchant, where they make their purchase, and the merchant is therefore responsible for all dealings with the customer after that.
How do the two opportunities compare?
On the face of it, becoming an affiliate marketer might seem preferable to starting your own dropship enterprise. You don't have to spend time and effort finding reliable suppliers of your drop ship products, you just join one of the hundreds of available affiliate schemes and start selling.But it you aim is to build a real business, dropshipping may be the better alternative. Sure you have more responsibility, but you also have more control over the margins you negotiate, the products you sell and how you sell them, and most importantly, over your customers.
With affiliate marketing you need to find new customers all the time
Affiliate marketers might not have any of the customer service hassles of a dropship business, but they are constantly having to find new customers in order to make money.With dropshipping, you have to opportunity to make each customer, a repeat customer, giving you the chance to build and develop a real business. Another key difference is when you get paid.
With affiliate marketing, you might not get your commission cheques for up to 3 months, but selling drop ship products means you get paid as soon as you make the sale.
Of course, the ideal situation might be to use the best of both worlds; using affiliate schemes and drop ship products together to give your buyers the best choice and service, and you the chance to build a loyal customer base and a profitable business.
