Dropshipping Vs Affiliate Marketing: Which Should You Choose?
Whether investing your time in dropshipping or affiliate marketing is a difficult decision. Affilisite take a look at both options which may help you decide.
Dropshipping allows you to own your own store, with no stock by directly having your products delivered by the manafacturer.
Advantages of Dropshipping
- You do not have to store any stock - As the manafacturer ships their products right to your customer, you never have to touch the stock.
- Little upfront costs - You don't have to hold an inventory which means you can save on initial costs you would have to fork out like your high-street shop. Costs you may occur would be for your website if you are not comfortable setting this up yourself.
Disadvantages of Dropshipping
- Hard to keep track of manafacturer's stock - As many retailers are likely to be selling the same stock on their site, it is very difficult to keep track on when items go out of stock. You could then sell products which are not available.
- Difficult to manage returns - You are the retailer and therefore responsible for dealing with customer return enquiries or when the customer claims they have not received their product. You then have a lot of back and forth work with the manafacturer to try and get your money back you have had to return to the customer.
- Finding the products to promote - There is very high compeition in online retail sites following the prominence of dropshipping and you need to find the products that are going to sell for a high ROI when other site owners may be willing to take a lot less of a cut.
Affiliate Marketing is very different to dropshipping as it allows you to promote products from other retailers and receive a commission on any products sold via your referral.
Advantages of Affiliate Marketing
- You do not have to store any stock - You are simply referring a potential buyer to another website so like dropshipping, do not need to have any inventory.
- You do not have to deal with customer disputes - As you are just the referrer, the retailer is responsible for dealaing with return and refund enquiries.
- There are many different types of website you could create. - You could create a retail, comparison, deal or review website. Affilisite allows you to setup any of these in just a few clicks!
Disadvantages of Affiliate Marketing
- No Instant Access to Results - Once the customer has left your site, it may take a while for that any sale to show in the affiliate dashboard. (Amazon updates every few hours).
- Returning Customer Issue - Once you refer a buyer to a retailer they can simple go back to that retailer to make a repeat purchase.
We have outlines some of the key advantages and disadvantages of dropshipping and affiliate marketing. We want to know the issues you have face with either method in the comments section below.