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Difference Between Affiliate Marketing and Dropshipping

The Internet is more than just a treasure trove of information; in fact, it is everything you thought the future would be. Today, you can make money on the Internet while you sleep. Isn’t this the ultimate dream? There are many different ways to earn some decent money on the internet and it seems, there are more new ways being developed every day. For instance, there are several business marketing programs running these days that both big and small businesses can leverage to boost their business. Businesses are always looking for ways to grow their businesses but without spending a fortune on some new business model. There is a new online sales tactic that ecommerce websites make the most out of these days, a new profitable business marketing model called “affiliate marketing.” It is like an alternate mode of earning some money which also helps grow your business in the process. Then there is “dropshipping,” a third-party vendor fulfillment method and a fine business model to start with.

What is Affiliate Marketing?

Affiliate Marketing is one of the many ways to make money on the Internet like an alternate income stream but without the bells and whistles of a full-fledge business practice. Affiliate Marketing is a business marketing model that allows you to promote and market someone else’s products or services leveraging an affiliate network and earn a commission, if any of the products sell as a result of your marketing efforts. It is a revenue sharing and generating model mostly incorporated by ecommerce websites such as Amazon. At Amazon, there are over thousands of affiliates that promote Amazon’s products across the Web, driving traffic and boosting sales. Amazon pays its affiliates a percentage of the revenue they make as a direct result of the affiliates’ marketing efforts. Affiliates play a fundamental role in businesses’ online marketing efforts, helping them drive traffic and promoting their products.

What is Dropshipping?

Dropshipping is yet another passive revenue generating business model in which a vendor or a seller sells products without actually maintaining an active inventory of the products. It is a business model that allows sellers to start selling products but without the need to keep an inventory of products. This business practice eliminates the need and cost of starting a new business. With dropshipping, you can start your business faster without even worrying about keeping an inventory of the products. In addition, you do not have to worry about renting warehouses and maintaining stockrooms. If you’re looking to start a new business or expand your current business, dropshipping is probably the perfect business to start with. You do not have to worry about investing in inventory management or finding warehouse spaces, or shipping out packages. You get the number of products you want to sell directly from the supplier and sell it to your customers, even one product at a time.

Difference between Affiliate Marketing and Dropshipping

Business Model

 – Both affiliate marketing and dropshipping are effective online sales tactics and probably the easy ways to make money online. However, they are very different revenue generating business models with each have their own pros and cons. Affiliate Marketing is a passive revenue sharing model that enables you to promote and market someone else’s products or services using an affiliate network and earn a commission if they make a purchase through them. Dropshipping is yet another passive revenue generating business model that allows you to start selling products but without the need to keep an inventory of products.

Working

 – The primary difference between the two is how they work. With affiliate marketing, you refer customers or clients to some other business through an affiliate program and if any of the products sell as a result of your marketing efforts, you get rewarded with a decent commission. This is one of the easiest ways to grow your business or start a new one. Dropshipping works similarly but in a different context. You do not have to worry about investing in inventory management or finding warehouse spaces; you simply communicate with suppliers and get the product or products the customer need and sell them directly to the customers.

Scalability

 – Affiliate marketing has the potential to scale but the goal is to get as many people as you can to click on the links which result in direct purchases. You simply act as the referrer, exposing the customer to a new product or service and when the sale is complete, you as an affiliate marketer earn a commission. Dropshipping business model, on the other hand, is much easier to scale. Most of the work is borne by the suppliers, so even if you get more orders, you need not worry about inventory stocking or warehouse management, which means less headache and less incremental work.

Affiliate Marketing vs. Dropshipping: Comparison Chart

Summary

Both are profitable business marketing models and passive revenue generating tactics that involve some serious money as the businesses grow. Both are easy to get started with less overhead expenses and more customers you bring, more rewards you reap as a result of your marketing efforts. With dropshipping, however, most of the work is borne by the suppliers which will allow you to scale your business with less incremental work and less pressure. This is not the case with affiliate marketing; sometimes, you have to do the heavy lifting. Affiliate marketing is simply earning a commission for promoting a product or service that is not owned by you.


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References :


[0]Brown, Bruce C. The Complete Guide to Affiliate Marketing on the Web: How to Use and Profit from Affiliate Marketing Programs. Florida, United States: Atlantic Publishing Group, Inc., 2009. Print

[1]Wright, Chandler. Affiliate Marketing: Secrets - How to Start a Profitable Affiliate Marketing Business and Generate Passive Income Online, Even as a Complete Beginner. Texas, United States: SD Publishing LLC, 2020. Print

[2]Sudol, Ted and Paul Mladjenovic. Affiliate Marketing For Dummies. New Jersey, United States: John Wiley & Sons, 2019. Print

[3]Neilson, Robert. Dropshipping: A Beginner’s Guide To Creating a Profitable and Passive E-Commerce Empire in 2017. Toronto, Canada: FSGM Publishing Inc., 2017. Print

[4]Image credit: https://pixabay.com/da/illustrations/dropshipping-oberlo-shopify-3264486/

[5]Image credit: https://commons.wikimedia.org/wiki/File:Image_showing_affiliate_marketing_techniques.jpg

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