Dropshipping or Affiliate Market – Do You Understand The Difference?
Affiliate marketing was once hailed as the king of internet marketing and the key to making money online. Today, dropshipping has become more mainstream than affiliate marketing. While both allow you to make money by selling someone else’s product, there is a thin red line that differentiates both concepts.
Before we move on to the differences, let us establish the fact that Dropshipping is not exactly a replacement or successor of affiliate marketing. The concept is almost as old itself. However, it has some clear advantages that have eventually made it more popular. Off late, we could see many major players in the internet business have announced their ecommerce entry. So, if it’s good enough for them, it is good enough for you. Let’s clarify the concepts before you find out the answer.
Understanding the Difference
Affiliate marketing is more of a commission based strategy. All you need to do is to send traffic to another business by promoting their project. If your leads make a purchase, you get a commission. Simply put, you don’t sell anything, you just make people buy.
Dropshipping, on the other hand, is like running an online retail store. You sell products but you don’t have to keep inventories or ship products to the customers. The shipping is handled by the distributors to whom you only need to pay the wholesale price.
Is Dropshipping Better?
Now that you understand the difference, it should be easy to see the advantage dropshipping offers over affiliate marketing.
- First and foremost, there is no hassle of inventory management or store keeping. However, you are very much responsible for customer support.
- The amount of profits you can make can be much higher as compared to affiliate marketing. This is largely because you can set your own prices. In affiliate marketing, commission is usually fixed regardless of the profits made by the retailer.
- Another advantage that makes dropshipping far more beneficial is the possibility of building your own brand and online reputations. As an affiliate marketer, it is not very common to establish repeat clientele. A buyer may not usually return to buy the same product through your link. However, as an online retailer, you have the opportunity to build your regular clientele.
- Finding new products is fairly easier than finding new affiliates from time to time. In many cases, you don’t even have to find newer products all the time. It is quite possible to monetize on the same product for a fairly longer period of time.
- You can sign up for any major shopping cart like BigCommerce or Volusion or 3dCart and get your online stores up and running instantly. SMCommerce supports direct integration with all major shopping carts and marketplaces and makes your life easier by managing inventory, managing orders all in one window.
- For starters, you don’t necessarily have to start with your own website. You can start dropshipping with Amazon, eBay and other ecommerce sites. Just subscribe at SMCommerce.net to instantly start selling at various marketplaces.
All this makes dropshipping sound like a lucrative online money making opportunity. Well, it is, but to be honest, there is still a lot you must learn. Keep your eye open for more information we share on SMCommerce blog. Educate yourself and join us in our journey towards the future of dropshipping and inventory management.