Everybody has once heard about making money online. The major question is How to make money online. Two of the most popular methods you probably heard of has been dropshipping and affiliate marketing. Before we get into the pros and cons of each one I will give a description of each..
What Is Dropshipping?
Drop shipping is a fulfillment model that allows you to buy products from a wholesaler and ship them directly to your customer.
Instead of purchasing a large amount of inventory, you simply partner with a drop shipping supplier and list their merchandise for sale. Then, once you receive an order you forward it to the supplier for fulfillment. The supplier will ship the product directly from their warehouse to your customer, and charge you only for the price of the shipped item.
Drop shipping Pros
In comparing dropshipping vs affiliate marketing, dropshipping tends to be quicker in the earning money process. With that said they both have similarities.
First, like an affiliate marketing business, dropshipping doesn’t carry inventory nor does it ship goods which makes both models pretty low risk. The benefits of dropshipping is that your funds become available each week. With an affiliate marketing business, there may be thresholds you need to reach before you can cash out.
For example, if you’re an Amazon affiliate outside of the US, you can only be paid by check or gift card. However, to receive the check you must have made at least $100. Yet, not everyone succeeds at making $100 based on percentages of the commission. With dropshipping, you get paid what you make.
Cons of Dropshipping
With a dropshipped online store, the customer is effectively making a purchase from “your store” even though you are not the one serving the product in most cases.
As a result you become responsible if the customer does not get their shipment on time, and also if the product is defective or arrives broken.
As a result you will have to commit a certain amount of time dealing with customer issues if your dropship vendors are not reliable.
In addition, dropshipped stores must also be setup to have a storefront that accepts credit cards and other forms of payment as opposed to affiliate marketing where all you have to do is throw up an informational site or blog.
The amount of work required to have a successful drop shipped online store is definitely more effort over time than it is required to be a successful affiliate marketer.
What Is Affiliate Marketing?
Affiliate marketing is when you refer a customer to another business and make a commission if the customer purchase a product. In effect, your website is set up as a marketing and referral engine and you don’t actually sell any product.
In addition, you don’t directly collect any money either. Once a sale has been made, the affiliate business is responsible for paying you your commission which usually occurs on a monthly basis.
How does the affiliate business know who referred the customer? A tracking cookie is placed on the customer’s computer whenever they click on a link on your site that takes you to their business.
If the customer makes a purchase and has the cookie installed on their computer, then you get credit for the sale.
Advantages Of Affiliate Marketing
The main advantage of affiliate marketing is the hands off approach in the sales process. All you have to do is refer a customer to a business and the customer makes a purchase, your job is done.
No worries whatsoever about product fulfillment and customer support. You get paid your commission and that’s it.
Affiliate marketing allows you to build as many individual niche sites as you wish which allows you to be diverse in the products you may want to sell. It is also easier to gain trust on a blog opposed to a storefront that may be selling different items.
If a new technology, a new niche, a new branch of content comes along you can quickly build a new site with affiliate marketing to take advantage of it.
Disadvantages of Affiliate Marketing
False advertising on the affiliate’s website may destroy a merchant’s reputation. More and more affiliates are engaging in this kind of scheme.
Merchants may suffer from commission costs. Set up and maintenance can also mean more cash outflow for the merchant from having too many affiliates.
Affiliates risk not getting paid. The twisted merchant may simply leave and close down the program without paying the affiliate.
Some affiliates are tricked into a program where they can earn high commissions and then get less than what the merchant has actually promised. Some programs require the affiliate to give cash for membership.
There are also some devious individuals who hijack affiliate links, stealing their commission in the process.
With its high payoff potential, affiliate marketing has also become a target for scammers and individuals wanting to earn from other people’s hard work. These people simply take advantage of the internet’s mask of anonymity.
At the end of the day neither option is better overall than the other. It all comes down to how much effort you put into it, what connections you make, what you’re willing to invest. A little bit of luck always helps as well. Nothing says you’re limited to just one or the other. You can always build a drop-shipping storefront and augment that income with affiliate marketing. Nothing can stop you but your competition and your own lack of ambition.
Path to Success
A chance to have your own business is something we all dream of having. To start a physical place of business and be successful is hard. A chance to start an online business and be successful is highly attainable. No matter what, a business is a business and nothing will happen over night.
To have a successful online business is a chance to live a more fulfilling life and buy back your time. Imagine working on something for months that can pay you for years to come. In my quest for financial stability and the freedom to really live life on my terms, I acted on this thought and it has completely changed my life.
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