Affiliate Marketing VS Dropshipping – Which Is More Profitable?

affiliate marketing vs dropshipping

Affiliate marketing vs dropshipping is a tough choice. If you came to this article, wondering about the pro’s and con’s of affiliate marketing VS dropshipping – this blog post will answer your question and tell you, which business model is more profitable.

More and more people are going through life as a ‘dropshipper’ or as an ‘affiliate marketer.’ They are professionally involved in dropshipping and affiliate marketing. That way, it is possible for them to earn a lot of money, enjoy freedom, and do fun things. Does that sound like music to your ears? Then it is advisable to learn more about dropshipping and affiliate marketing.

In this article, you will find the main differences between these two forms of making money online. Both models have their advantages and disadvantages, which you can read about in this blog post.

crop payroll clerk counting money while sitting at table

After reading this article, you can make a solid choice for yourself; are you going to do dropshipping, or are you going to opt for affiliate marketing?

Based on which aspects you can make this choice? You will also find more information about this in this article. After all, it is not only important to look at the advantages and disadvantages of both variants, but also to look at your own situation. 

If you want to get started with affiliate marketing, for example, you must have the necessary knowledge. Do you have the time and the perseverance to take in that knowledge? Or do you prefer to keep it easy for yourself? In that case, you might be better off opting for dropshipping.

Anyway, there are some differences between dropshipping vs affiliate marketing. 

In this article, you will find a clear comparison ‘affiliate marketing vs. dropshipping, ‘so you can make the right choice for yourself. The fact that you are already looking for a way to make money online is a good sign. The world is at your feet. Or rather, the digital world is at your feet!

What exactly is affiliate marketing?

affiliate marketing

In affiliate marketing, you actually form the link between the selling parties and people who are specifically looking for certain products or services. Suppose a visitor is looking for the best portable air conditioner. Then the visitor types in ‘best mobile air conditioner’ on Google, after which the visitor is on one of the above hits.

This may be an affiliate website on which the best mobile air conditioners are discussed. The visitor sees an interesting mobile air conditioner and clicks on ‘Buy this mobile air conditioner.’ At that moment, the visitor is redirected to the website of the selling party. 

Will the visitor on that website eventually purchase a product? 

Then as an affiliate marketer, you will receive a commission for that. After all, you are the one who ensured that the visitor ended up on the website of the selling company.

With affiliate marketing, you are actually an intermediary. You try to make visitors enthusiastic about certain products/services and then send them – through a unique affiliate link – to the selling company’s website. If the visitor makes a purchase, you will receive compensation (in the form of a commission) from the selling company. The more orders you can score in this way, the higher the earnings will increase.

What exactly is dropshipping?

dropshipping

If you are going to start your own webshop, you have the choice between two options: you keep the products in stock yourself, or you use a dropshipping company for this. This company has all products in stock and takes a lot of work off your hands; after all, this party is responsible for the shipment of the goods.

Suppose a visitor ends up on your dropshipping website and places an order there. This order is directly forwarded via your website to the dropshipping company, after which that company arranges the shipment. You do not have to worry about this, but at most, you only have to process the invoice in the accounting.

The dropshipping company then sends the package to the customer. Is the customer satisfied with the product received? Then you have a successful order. 

dropshipping

Is the customer not satisfied with the product he received? 

The customer can then return this product within the set term (law on distance purchase); the package is also returned to the dropshipping company.

As a dropshipper, you do not have to worry about sending the parcels or receiving the returns. 

By starting up multiple dropshipping websites, you can start earning a considerable amount. Especially if you have successful dropshipping websites that you don’t have to worry about; after all, the most time-consuming jobs are taken care of for you by the dropshipping company.

The main difference between affiliate marketing vs dropshipping

Why are both variants of making money online described so extensively above? Because this directly indicates the most important and biggest difference between affiliate marketing and dropshipping: with affiliate marketing, you don’t sell anything, and you are therefore not responsible, while with dropshipping, you are responsible.

How that exactly works?

Well, if you start your own eshop, you try to agree with the visitor. After all, you want the visitor to your eshop to purchase a product. If the visitor purchases your webshop, you will be faced with an obligation; After all, you have to send the product to the customer, and you have to process the entire order. Indeed, this work is partly taken care of for you, but you do have to deal with a certain responsibility.

Suppose the order does not go well at all; for example, the customer receives a completely different product. At that moment, you are responsible for it. You can possibly include that with the dropshipping company, but the customer has nothing to do with that. 

After all, you and the customer have agreed and not the customer with the dropshipping company. 

If you start working as an affiliate marketer, you have nothing to do with that at all. After all, you do not sell anything, and you do not agree with the customer. No, you are only an intermediary in affiliate marketing, so that the selling company will score more orders. 

With dropshipping, the moral of the story is that you are responsible for handling the order, which increases your risk. With affiliate marketing, you do not have to deal with responsibility at all, so you can actually work without risk. 

What are the benefits of affiliate marketing?

Now that it is clear what the difference between affiliate marketing and dropshipping is, it is time to look at the pros and cons of both variants. 

Benefits of affiliate marketing:

  • As an affiliate marketer, you run no risk:
    • You do not agree with a customer
    • No need to keep stock
    • You don’t need a warehouse, office or other building
  • Only you decide for yourself which products you will promote
  • You can work anywhere in the world, as long as you have an internet connection and a laptop
  • Of course, you do not need any starting capital
  • You enjoy a lot of freedom
  • You do not necessarily have to have contact with customers/visitors. Of course, you can choose this as an ‘extra service.’
  • You can easily scale up
  • You can choose from all kinds of affiliate programs, campaigns, and networks

Disadvantages of Affiliate Marketing?

It may be clear; affiliate marketing brings the necessary benefits. Considering the above benefits, you would actually be crazy not to work as an affiliate marketer. Or are there some catches here and there? In the list below, you will find the main disadvantages of affiliate marketing:

  • Nowadays you have to deal with the necessary competition
  • You must first acquire the necessary knowledge
  • You have the necessary persistence to be
  • Also, you have to invest a lot of time (and/or) money in generating the content
  • The commission may expire due to a cancellation or a return
  • You are only successful if you have many website visitors

Affiliate marketing – conclusion

What do the above advantages and disadvantages of the affiliate marketing show? Among other things, this is one of the most interesting ways to earn money online. After all, you do not run any risk, you do not need any starting capital, and you enjoy complete freedom. If you do it right, you can even enjoy financial freedom over time. 

affiliate marketing vs dropshipping

Before that, however, you have to invest an awful lot of time, money, and effort. You must have the necessary perseverance, you must show a lot of patience, and you must continuously generate new content. If you eventually manage to do this, you can at least become quite successful with affiliate marketing!

What are the benefits of dropshipping?

Now that you know the pros and cons of affiliate marketing, it’s time to look at the pros and cons of dropshipping. This form of online business is also very interesting, partly because of the following advantages.

Benefits of Dropshipping

  • You don’t have to keep stock yourself
  • You do not have to spend time on shipping and returning
  • Only you decide which products you are going to sell
  • You can scale up relatively easily
  • You do not need too large a starting capital, after all, you don’t need a building or warehouse

What are the downsides of dropshipping?

The above advantages of dropshipping are absolutely clear. As a dropshipper, do you also have to deal with disadvantages? Hell yes. You have to consider the following drawbacks:

  • You are responsible for shipping and the products you sell
    • After all, you agree with the customer through your dropshipping webshop
  • You have to make a webshop or have it made; this takes time and money
  • It is difficult to be unique with your webshop
  • You have little influence on the satisfaction of the customers; you depend on the services of the dropshipping company for that
  • Not all products have the same profit margin; This is also due to the extra link that is present in this company form

Dropshipping – conclusion

All in all, it can be concluded that dropshipping offers many possibilities, but you also have to consider the necessary disadvantages. In a direct comparison, it is striking that dropshipping has more disadvantages than affiliate marketing, an interesting fact.

Affiliate marketing vs. dropshipping – the final conclusion

Suppose you want to start earning money online, which method appeals to you more? Affiliate marketing vs dropshipping is a tough choice. The above pros and cons clearly show that affiliate marketing is the best way. However, this does not alter the fact that some digital entrepreneurs are also very successful with dropshipping. 

It is up to you to list the above advantages and disadvantages for yourself. Which advantages are important to you and which disadvantages are important to you? Based on such a comparison, you can make the best choice for yourself. There is really only one ‘right’ choice based on the advantages and disadvantages alone; affiliate marketing.

Do you want to deal with affiliate marketing?

Then it is good to take into account the necessary competition. Partly for this reason, it is important to immerse yourself in affiliate marketing, gain a lot of knowledge, and enjoy a soaring start. The digital world is at your feet! 

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Elizabeth Sramek
Elizabeth is a Senior Content Manager at Scaleo. Currently enjoying the life in Prague and sharing professional affiliate marketing tips. She's been in the online marketing business since 2006 and gladly shares all her insights and ideas on this blog.
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