Dropshipping and affiliate marketing are options for people to try to make a living or at least bring in some revenue. But what is the difference between dropshipping and affiliate marketing. And how do you answer this question: Should I do dropshipping?
In this article, I discuss the following:
- What is dropshipping?
- What is the definition of affiliate marketing?
- Difference between dropshipping and affiliate marketing
- Should I do dropshipping?
- Is affiliate marketing worth it?
What is dropshipping?
Dropshipping is the business strategy of selling products but not actually having inventory. So, for example, let’s say I’m promoting a particular product in my Shopify store. When you order, it looks like I’m the seller of that product to you as the consumer. Everything has my company information, and another company that sends the product fulfills my order. But it looks like the product comes from me.
As the author of this super helpful book on dropshipping says, if anything goes wrong with the shipment, the customer has a complaint about the product; it’s basically on you – the dropshipper.
In my mind, that is a lot of risk for digital content creators. So, if nothing else, truly vet the suppliers and the product. That can certainly be time-consuming.
Dropshipping usually includes creating a digital storefront and sharing products on your high-volume channels – like your website and social media channels.
The definition of affiliate marketing
Some of the digital marketing strategies for dropshipping also work for affiliate marketing. I can discuss products on my blog or social media. I would then send people down the purchase path through an affiliate link. However, in an affiliate marketing model, I don’t fulfill the order, and it doesn’t say my company name when consumers receive the order. For example, if I send an affiliate referral to Amazon and somebody buys from Amazon, that Amazon seller will fulfill the order.
Affiliate marketing might include setting up a digital storefront and linking to products from blog posts and social media.
I also do affiliate marketing through:
What is the difference between dropshipping and affiliate marketing?
The most significant difference between dropshipping and affiliate marketing is that dropshipping will have your name all over the order from the beginning to the end. If there’s an issue with the order, you will have to deal with it. In the case that the customer is not happy, they will contact you.
Now, you might be able to make more money as a dropshipper. And when I tested the concept, it certainly looked like my cut from products would be higher, but there’s also the potential for a lot more hassle. For example, depending on how much you make as a dropshipper in particular states of the USA, you might have to collect and pass on sales tax in those states.
In affiliate marketing, once you pass the customer to the company, that company will fulfill the order, and we’ll have to deal with any negative issues. With the right volume of leads past, you can also create a good revenue stream with affiliate marketing. You likely still have to pay income taxes on your affiliate marketing revenue.
Should I do dropshipping?
The answer to that question kind of depends on your preferences. Do you want to own the entire process. Or do you want to pass leads for products that make sense to be included in your content? I find the danger of dealing with customer complaints because of shipping issues a deal breaker. But that’s just my personal opinion and preference. That doesn’t mean you feel the same way, and you might be OK handling those issues – if they even come up.
The three avenues I use for affiliate marketing do get the job done and are profitable enough while fitting into my overall content strategy. However, I try to be protective of my time, so I decided not to go down the dropshipping route and stick with affiliate marketing only.
On the flip side, this may be a nonissue if you have a trusted supplier and know they will do a good job.
Is affiliate marketing worth it?
Affiliate marketing is worth it if you can drive the right traffic volume. Even when I look at my online Amazon affiliate revenue, a good amount of clicks trickles down to people buying and keeping the product. When people return products, I also lose the affiliate commission.
Affiliate marketing is not worth it when you work with a random brand that contacted you, and once you do a video, a social post, or whatever to their product, you don’t know anything about it. So, I think the danger for those setups is just too great.
Certainly, there are creators out there who make a go of dropshipping, some prefer affiliate marketing, and maybe some dip their toes into both strategies. Whatever you decide should fit into your strategy, time, and preferences.