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Dropshipping

Dropshipping vs. Affiliate Marketing: Which Business Model is for You?

Nedina Gjorgjieva
12 minutes

As years have been passing by, online businesses have been growing with the speed of light especially after 2020. Considering the recent events that shook the world to its core, the digital market experienced an unpredictable boom, leading to an unforeseen acceleration in sales and customer network. In the first year of the pandemic alone, an astounding 1.79 billion people made a purchase online. This raised global eCommerce sales from 13.6% in 2019 up to 18.5% in 2020, expecting to reach 20% in 2022.

In addition, working from home became the new norm, with employees opting to stay in the comfort of their home office even after the loosening of restrictions. As a result, many even made the bold decision of going solo and giving online business a chance. After all, all you need is a functioning computer and a solid internet connection and you are good to go. Not to forget that you probably won’t need any specific educational background to successfully launch your online business. With free training courses being one click away you won’t have any trouble with finding your way around the online market.

Among the most pursued online businesses are undoubtedly dropshipping and affiliate marketing. If your goal is to generate high income without exposing yourself to a big risk, then these two are the choices for you. But before making your final selection, invest some time in doing some research to see what would be the best option. To help you out on your quest, we’ve provided thorough explanations of what is dropshipping and what is affiliate marketing and summed up the advantages and disadvantages of these two business models so you could make the right decision.

Dropshipping vs. affiliate marketing: what does dropshipping involve?

Dropshipping is a retail method where online stores don’t keep products in stock. Instead, they send the customers’ orders to their dropshipping supplier who is responsible for taking care of the orders and shipping them to the end customers. Therefore, the seller is free from the burden of managing and preparing the order for shipping. Usually, when there’s an automation dropshipping plugin in place when the customer purchases a particular product from a dropshipping store, the order is automatically forwarded to the supplier and they handle the rest of the work themselves.

Benefits of choosing dropshipping

Low expenses, high incomes

As previously mentioned, dropshipping offers the chance of setting your business in motion by investing a very small amount of money since you don’t have to concern yourself with stocking the inventory around the clock. Traditional brick-and-mortar stores have to buy merchandise in bulk and store it while spending a small fortune on it, in order to keep customers around. On the other hand, stores that operate based on the dropshipping model have the luxury to cut down their expenses tremendously. To put it simply, business owners don’t buy inventory in bulk, they only pay only for the inventory once they sell it. This means that the costs for starting the business are low as not one product is bought prior to a customer making a demand for it.

In addition, dropshipping offers you the opportunity of defining your own prices. In comparison to other business models, such as affiliate marketing where you are paid through commissions and don’t have any say in setting the profit margins, dropshipping can earn you a rather higher income.

Time-saving

Why waste time on preparing packages for delivery when you can partner up with a dropshipping supplier to do all the hard work? Instead of sorting orders by yourself and then wasting even more time by running down to the post and making sure to ship everything on time, find a dropshipping supplier who offers full dropshipping automation. In that way, you can pay more attention to growing your business, investing more time in advertising your store, and getting to know your audience better.

Limitless merchandise

When it comes to dropshipping, there is no such thing as a limitation. You can sell whatever you like, whenever you like from anywhere in the world. That’s the beauty of this particular online business. It gives you versatile products you can choose from depending on what your customers are interested in. As long as your supplier has it in stock, you can put the desired product up for sale and make it available for purchase.

Global customer network

With dropshipping, you can attract customers from all over the world, increasing your chances of expanding your company and transforming it from a low-income online store to a global brand. Doing business with droppshipping suppliers from various countries will contribute to growing your customer network to outstanding dimensions. Consequently, your business will blossom in no time and get a reputation worth the work that has been invested.

Drawbacks of choosing dropshipping

Running into unreliable suppliers

One of the possible downsides of dropshipping is that you might run into a lot of questions about your products’ quality. And since you won’t be managing the inventory, you’ll never actually see the products you sell and there might be times when your name will be on the line. However, this shouldn’t discourage you because you can easily avoid such issues by finding a dropshipping supplier who’s reliable and who provides 100% authenticity assurance for the products they supply. Finally, when it comes to product quality, one major thing you should know and remember is to avoid collaborating with suppliers that are known for selling low-quality products.

Customer support difficulties

In eCommerce, whenever customers stumble upon any issues related to their delivery, the store’s customer support is there to help them sort everything out. However, in dropshipping, the dropshipping supplier is the one who should lend a hand in case of problems with shipping, delivery, or the products themselves.

This can be quite frustrating and time-consuming and may create additional problems which can negatively influence the image of the store. However, as mentioned above, these types of issues could be non-existent if you choose a supplier that’s trustworthy and has a good reputation.

Choosing the wrong niche

Since dropshipping is becoming more and more popular, the market is getting overcrowded. Because of the “too good to pass up” advantages that it offers, a great many prospective business owners have been trying to make a name for themselves. Thus, the more the number of entrepreneurs investing in dropshipping goes up the smaller the chances of overall success.

This is why you should invest time in finding unique products to sell. One idea is getting into the fashion industry and finding the winning products to dropship which more or less fall under the luxury niche. Otherwise, if you stick to a basic catalog of products, you’d have to find alternative ways of attracting customers such as offering constant discounts, supplying complimentary gifts, or providing them with an outstanding shopping experience they’ll never forget.

Dropshipping with BrandsGateway

If you decide to stick with dropshipping, then BrandsGateway might be the perfect choice for you, especially if you’re looking for a supplier that’ll make sure you don’t face any of the drawbacks mentioned above. Moreover, if you’re into selling high-quality fashion products. Classified as one of the most eminent B2B clothing suppliers, BrandsGateway offers impeccable high-end items from a wide range of worldwide renowned brands including Versace, Armani, Cavalli, Dolce & Gabbana, to name a few. All merchandise comes along with 100% authenticity assurance, providing customers with beyond satisfactory experience. Moreover, having warehouses in the US and throughout Europe, BrandsGateway is capable of shipping to a wide target audience, offering you the opportunity to build a strong international customer base.

Since the company has built its own Shopify and WooCommerce plugins, working with BrandsGateway has never been easier. All you have to do is choose a subscription package and follow the instructions you’ll be given to get your plugin to run successfully. The plugin will be automatically synced non-stop with the inventory for your customers to be kept posted constantly about the products available and avoid buying out-of-stock items. Moreover, deliveries are tracked through services like DHL, FedEx, or UPS, dispatching the order within 3 to 5 business days depending on the location. In addition, no minimum order is required, hence, you can dropship as much or as little as you wish. BrandsGateway also offers a much convenient return policy of 14 days starting from the day the product arrives at its final destination. Last but not least, profit margins can go up to 250% for each order that’s put in your store.

Dropshipping vs. affiliate Marketing: what does affiliate marketing involve?

Affiliate marketing involves businesses hiring third parties (e.g. social media influencers, bloggers, etc.) to advertise products or services on their behalf, and in return, the advertisers are paid with commissions. To illustrate how everything works, third parties place affiliate links on their websites or apps, and, if potential customers make a purchase usually within 30 days after visiting the link, affiliates earn a percentage of the sale in form of a commission.

Benefits of choosing affiliate marketing

Small investment

Just like with dropshipping, affiliate marketing doesn’t entail investing a huge amount of capital to hit the ground running. The most important thing is to create an eye-catching blog, website, or social media account, where you’d regularly include affiliate links to the products and/or services that you’ll be promoting, and build a strong presence on the social networks that’ll guarantee customer flow. In the beginning, the only expenses you’d need to cover would be hosting and domain name registration fees in case you opt for a website or a blog.

Low-effort side hustle

If you’re looking for a way to earn additional income, affiliate marketing is an ideal side hustle that won’t take a lot of your time but still make you some profit. Your only responsibility is to generate dropshipping store traffic and potential leads for your affiliate partner without being held liable for possible issues with the products and services that you promote.  In short, it’s quite simple – if someone purchases a product or a service through the affiliate link that you’ve placed on your website, you’ll get a certain commission. All in all, you can still keep your full-time job while giving affiliate marketing a try and seeing how things turn out.

Customer support is out of the way

Customer dissatisfactions are an inevitable part of merchandising which is where customer support comes into action. However, as an affiliate, your sole job is to promote other companies’ products or services as best as you know so you can help them increase their sales. In other words, unlike dropshipping, in affiliate marketing, you won’t have any contact with the end-customers whatsoever. Whatever issues they’re experiencing, the company you’ll be linking to will be responsible for catering to their needs.

Drawbacks of choosing affiliate marketing

Teaming up with the wrong partner

In comparison to dropshipping where you’re free to name your price, in affiliate marketing, you get a fixed commission based on a contract with your affiliate partner. Promoting a service or a product the right way as an affiliate involves putting in a great effort. Setting up a website with creative designs, images, and entertaining content to lure an audience that would turn into potential consumers isn’t the easiest task to accomplish and when you invest in it, it should pay off. This is the reason why you should be careful when choosing your affiliate partners. Based on your target audience and the benefits that the potential partners offer you, you should make an informed decision and choose the one who will ensure regular and high commission.

Possibility to run into skeptical customers

Often, there’ll be people who are skeptical of affiliate links. Because of the increase in cyber attacks, lately, people are afraid they might be redirected to a scam or even a phishing link. As a result, they might attempt writing the URL link in their tab section manually. In that way, the earnings of affiliates are greatly affected. No click, no profit. However, if you put effort into building a secure website or blog with high-quality content and team up with reputable companies your affiliate marketing venture can turn out to be a winning project for you.

Affiliate marketing with  BrandsGateway

In the event you come to the conclusion that affiliate marketing is what you’re feeling passionate to pursue, why not work with BrandsGateway’s dropshipping affiliate program, which also happens to be considered high-ticket affiliate marketing working with high-price dropshipping items? If you have a talent for producing engaging content that would help in advertising BrandsGateway’s dropshipping program, give the company a go.

Your work would consist of referring customers to the BrandsGateway dropshipping service and would earn a 15% commission for each dropshipping subscription. What’s even more attractive, you’ll be getting a commission as long as they’re paying customers at BrandsGateway. To put it simply, if someone purchases a subscription on a monthly basis and then extends it, you’ll continue receiving a commission on a monthly basis. The potential consumers have up to a year at their disposal to buy a subscription for you to get your payment which is received on the 15th of every month.

To sum up

While both dropshipping and affiliate marketing are low-risk, low-investment business models, none of them is flawless. So it’s complicated to say which one is more promising. They both come with noteworthy pros and some cons that can make you think twice about your decision. For instance, whereas dropshipping is more likely to bring you a steady income, but it requires dealing with customer service, affiliate marketing is more hands-off, however, it won’t build you a strong consumer allegiance. At the end of the day, it all comes to your preferences and capabilities. With the right strategy, both can bring you considerable earnings and elevate your business successfully.

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About the Author

Nedina Gjorgjieva

Proud bookworm, passionate content writer and devoted Arctic Monkeys fan. Always in the mood for travel and sightseeing.

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