The Dropshipping Vs Affiliate Marketing – Review

Want Control Over Your Destiny? Who Doesn’t?

Are you sick and tired of your five days a week 9 to 5 grind?

Fed up with your current situation and looking to change it up?

Well, you can, with many online opportunities that promise to make that happen. Affiliate Marketing or Drop Shipping are two golden opportunities, waiting to help you turn your life around forever.

Hi there, It’s Tom Here From The Real Deal Affiliate   Tom

Imagine what would happen if you had a magic wand; Waved it and all of your wishes came true. “YES”, that would be great, but you don’t have any magic wand; And, neither do I; So, it ain’t gonna happen.

That doesn’t mean ridding yourself of your present lifestyle is impossible. I’ll explain how you can change it and escape your daily grind.

What Is Drop Shipping?

Dropshipping is of a similar to an e-commerce store where the sale/purchase of services or goods using an electronic medium, very much like the internet. The process involves the transfer of data and funds among two or more parties. In other words, it is just like online shopping, as we broadly know it. History suggests that e-commerce began as far back as the 1960s, and was used for a whole host of data transfer, mainly to do with transferring of documents relating to business.

Over the life of drop shipping, there have been at various stages where it has carried a checkered past. Related mainly to the lack of quality content, and to some extent, misuse of spam.

That has in recent times changed dramatically, mainly as a result of a surge of online marketing growth and the way it continues to grow at such a rapid rate.

The shift is the result of the constant demand for more transparency and accuracy. It has lifted the standard in a variety of ways, as online marketers now see it as the pivotal point for survival.

Dropshipping Items

 

Seven (7) Core Steps That Represent Dropshipping in a Nutshell

  1. Seller (you) establish a niche product to market
  2. Partner with a supplier of your specific product
  3. List your preferred product on your website
  4. Include an external link to your supplier for visitors to make a purchase
  5. Continual dialogue with supplier- Shipment and payment updates
  6. Supplier packages and ships products to customer
  7. Rinse and repeat

What Is Affiliate Marketing?

Affiliate marketing is a low-risk venture and can be quite an effective way of expanding your marketing ambitions way beyond many other online businesses. Starting out as an affiliate marketer is an excellent way of understanding how the online marketing world works without parting with large sums of money to learn.

  • Affiliate marketing, a referral system where you introduce and refer the potential buyer to another business (merchant website). Where the visitor can make a purchase of the niche product, you are promoting.
  •  You receive a set commission for the sale. From the point of purchase through to shipment (the complete transaction) is organised by the merchant.
  • Each month’s end, all your sales are calculated by the merchant and deposited into your account of preference.

How Affiliate Marketing Works

That raises the question: how do affiliate merchants know you were the one to refer the buyer?

  • When you join with a merchant network, you are given an exclusive affiliate link to insert into your website content; And, each time a visitor clicks on that link and makes a purchase. The sale is automatically assigned to you as the Affiliate. Sounds a little complex; But, really it isn’t.

In fact, as it works without fault, so you don’t need to worry about being credited for your sales. The whole system works seamlessly.

  • The trump card with an affiliate marketing program, your performance is based around sales. Why? Because you will only earn a commission when visitors to your website go onto your affiliated merchant’s network and buy products. Such is the process it gives you that extra bit of motivation to drive and convert visitors into buying customers.

Can You Make Money With Either Business?

Both models are a viable proposition.

Which is why it’s just a matter of deciding which path you feel most comfortable in pursuing.

Pros of Drop Shipping

Very Low Baseline Cost

There is no requirement in having to stock a full warehouse of stock before you get going. That is all eliminated with using the drop shipping method. A drop shipping business allows your using an outside supplier, meaning that you carry zero stock.

Low Cost of inventory

Inventory cost is one of the highest overhead costs you’ll encounter if you decided to fully stock and carry a warehouse full of products.

There is every chance that you could quickly end up with dated stock – forcing you to find ways to reduce your stock holding. On the other hand, you may well be carrying too little stock, resulting in lost sales and revenue.

That’s the overlying benefit with drop shipping, you will avoid such issues, giving you more time to focus on your business and brand domination.

Low Order Fulfillment Costs

The dropshipping supplier takes care of all the fulfilment requirements. So your fulfilment cost is zilch.

However, your prime concern is to make sure the supplier prepares and ships the products to your customer in a reasonable timeframe. Everything else in the cost chain will be handled by the supplier.

Test More Products with Low-Risk Factor

Not having to worry about carrying any inventory, takes away all associated Cost. Also, it provides you with the privilege of continually updating your list without the worry of having the re-stock fulfilment to take care of.

Constantly researching keeps you up-to-date with regards to what’s popular and in demand. Such flexibility provides you with the opportunity in offering to your customers instantly.

Carrying your own stock requires constant checking of your stock holding. If orders outstrip what you are holding and replacement stock is in transit, a time-lapse will cause your loss of sales and revenue-generating.

There will always be a time-lapse carrying your own stock, and re-ordering replacement stock.

Dropshipping allows your constant testing of new items without the risk of stock holding; Plus, you will only have to pay for the products that you have sold.

Cons of Dropshipping

Little Control Over Order Lead Times and Fulfillment

Sure, there are considerable benefits in not having to carry a complete warehouse with stock; But, you’ll wear the consequence for any disgruntled customer issues. It all works quite smoothly until the manufacturer or wholesaler messes up your customer’s order. That is when the complaints start rolling in from customers who have had their order screwed by your supplier. All claims are your responsibility even though you have no control over packing and shipment; That is left to your supplier. So, it goes without saying, do your research before embarking any drop shipping arrangement with suppliers. Make sure they are reputable, reliable and have an outstanding track record with drop shippers.

Dropshipping

Totally Reliant on Your Supplier’s Stock Holding

With the freedom to offer products, or remove from your inventory all slow-moving stock. That is of enormous value to any drop shipper. The downside to this, your not in control of suppliers stock holding, and if they exhaust their usual stock holding, and you don’t hold any yourself. You’re in big trouble.

Replenishment could take a longer lead time, and if your customer isn’t prepared to wait; And more likely they won’t. Then you have just lost order and a customer. And, this may well cause long-lasting damage to your brand.

Profit Reduction

The profit reduction cost with dropshipping relates to the single item pricing. No doubt your more likely to pay more for single-item purchases, whereas, larger quantities attract a much cheaper rate – Lower profit margins.

Earning lots of money using the dropshipping, then, you’ll need to increase your selling quantities to attract lower buying costs. Can be very hard if you are just starting out; None-the-less still much better than carrying your own stock, when surplus cash may be a problem.

 Customer Service Below Par

Your supplier is unreliable and ships later than what would be considered a realistic time frame, items damaged, incorrect items packed, incorrect labelling address. Like I mentioned before these types of problems of order fulfilment are so vital to the livelihood of your business.

Problems such as these, have a snowball effect and cause you losing or maintaining future contact as the customer vents their anger on you, and they are gone forever.

Pros of Affiliate Marketing

Multi-Million-Dollar Business

The affiliate marketing industry is a multi-million dollar business and prospering at an accelerated rate. In fact, it’s the main cog in driving company sales, which is why this industry will continually experience extensive growth well into the future. So, why wouldn’t you want to be part of a thriving industry and get your share of such an incentive?

Low-Cost Start-Up

Affiliate marketing has an enormous advantage, as it is relatively easy to get started with little to no capital required.

Once you have decided it’s just a matter of setting yourself up with a website, choosing a niche, research the market trends and prepare a blog in line with your niche.

There are a few other related set-up expenses if you decide to establish your own affiliate marketing website. They are, setting up a domain, web hosting provider, and a few minor design layout costs. Or you can make it much easier for yourself, by joining, Wealthy Affiliate, as everything is provided, including full training.

No Expertise Necessary

Becoming an affiliate, you don’t need any university degree to get started.

That is the impressive thing with affiliate marketing, you’ll learn as you go along, testing a variety of campaigns, be that organic or paid. Plus, there are plenty of ways to run and manage affiliate marketing programs. Apply this in identifying what performs well and how they will provide results.

Secondary Source of Income

The added advantage with affiliate marketing when first starting out there is no need for you to leave your current job. Affiliate marketing can be done as a part-time project for the few months, and as you gain experience, traction, will follow.

Your Own Freedom

You have the utmost of freedom to choose from many different affiliate marketing programs, offering you flexibility in selecting the path that best suits you most. Should you decide to market your business; Then here are some ways that may be of interest.

  • Setting up an affiliate company website or blog
  • Come up with Pay-Per-Click (PPC) campaigns
  • Create affiliate emails

Affiliate Marketing Oldest and Most Reliable

Affiliate marketing, one of the oldest and most recognised online business models and has many advantages for users.

Great Way to Earn Passive Income

Affiliate marketing represents a great way to earn passive income. First, you need to understand that affiliate marketing is a colossal option for earning passive income. Once having mastered the knack of marketing your affiliate products, it doesn’t demand full-time monitoring. To be honest, many marketers are making a sizable income using the passive income stream.

No Customer Support Hassles

You don’t have as an affiliate marketer the worry of customer service as that is all done by your affiliate merchant. Whereby, with dropshipping, all customer support is controlled by you. That is where the hassle FREE advantage is of immense value, you’re immune from all customer related issues. Once the customer clicks on links, you have provided, they are redirected to the e-commerce site, (the merchant), from there everything is done by the merchant.

Commission On Sales

Commission sales is a performance-based method where you refer customers to the merchant and receive a referral commission from any purchases your referral makes.

Selecting a quality niche product attracts lots of value in most instances. Your efforts will be rewarded now, and into the future. Following trends or fashion can be a short term arrangement, as they consistently change; So, you are continually updating and evolving in line with trends.

Cons of Affiliate Marketing

Affiliate marketing is no different to other marketing platforms, it has its weak points too.

Patience and Hard Work

Starting out, it will be a struggle, so it requires lots of hard work and perseverance. If you’re not willing to commit and not prepared to apply patience, then it may not be for you.

Any new business takes time to evolve and will demand lots of hard work. If you want to be a stand out in the crowd, then, roll up your sleeves, and prepare yourself for lots of effort and dedication.

Adopting a unique strategy and policy plan with a different sort of products; Then you’re on your way to success.

Set Affiliate Commission

With the set commission base, you need to consider the price of the products you intend promoting, carefully calculate your referral commission per sale. They are the defining factors concerning each sale. Set commissions can be a minefield if you’re not aware of the commission base being offered. Remember, not all high ticket items attract a high commission, but, to the contrary, more especially if it is a slow-moving product.

Lower your expectations and hone in on products that offer a reasonable commission in line with the selling price of the product.

 Product Selection

Choosing the right products certainly is a difficult task, and more likely that little more difficult for those just starting out. There are so many choices and understanding your needs will require lots of homework mixed with some trial and error before you’ll come up with what suits you best. Make no mistake, this part is the nucleus of long term success. Don’t rush it, take your time, after all, you are working on your future here, so be patient.

 Competition

Being an affiliate, you have no legal rights to any affiliate programs. Obey all rules and regulations laid down by the product owners or service providers. Adjusting to their terms will help with your standing within the industry. This has long term benefits, and visitors will then voluntarily engage with the industry.

Uncertainty

There will always be a percentage of risk, but that’s no different to any other business. No promises are laid down in stone that any income will be a certainty. That is why extracting every ounce of dedication at the beginning will carry a long way in allowing you that dream. As always, income will fluctuate as sales regulate that. Growing a wide audience range will have a tendency to a more consistent income flow.

Working as a Third-party

Some spin-offs being an affiliate marketer, some good and some not so good. You, as an affiliate, are only the third party in the food chain. So, your job is to promote and drive traffic to the merchant’s website. You have no correlation or relationship with any visitor who visits your site. Bottom line, you are only helping the merchant build his buyer list.

Given, you’re receiving a commission for directing a visitor the merchant’s site; basically, the handshake ends there.

Even though you were the one who referred that same visitor in the first place, and if they go directly to the merchant, and buy again you’re not paid any commission.

Verdict

These days starting an online business is getting so much easier, that’s the good bit. Capitalising and making the most of your start is so much more challenging.

Weighing up both options, affiliate marketing and dropshipping, affiliate marketing in my humble opinion, comes out on top.

Even though it has drawbacks, (cons), the benefits, (pros), learn profoundly in its favour. Especially when you take into consideration, the spin-off, long term residual income offers.

Sure, some heavy lifting is required at the beginning, but if your focus is aimed toward the finishing line, rather than the start, you’ll be setting yourself up for the rest of your life.

Applying your full focus will have its ups and downs no doubt, but if you are prepared to ride the waves into calmer waters results will follow.

Getting through the rough seas will require guidance, stability and clarity, something that Wealthy Affiliate has been so masterfully put together. A platform that offers the full monty no matter your level of experience.

Start Your bJourney NOW

I hope this article helped you in understanding the pros and cons of affiliate marketing and dropshipping. If you still have any queries, you can leave your comment below. And, I’ll be more than happy to reply.

Leave a Comment

error

Enjoy this blog? Please spread the word :)