Even while drop shipping has became one of the biggest entrepreneur trends to exist, affiliate marketing is maintained a strong hold on the industry. The question is, which one is better? When it comes to affiliate marketing VS dropshipping, you may be asking yourself which one you should do. And there is a variety of important factors regarding both that you’ll need to figure out before deciding to do either.
While both of these methods for generating digital sales are great in their own right, which one comes out on top? This guide will walk you through the pros and cons of each business practice and whether or not one is better to do then the other.
Affiliate Marketing VS Dropshipping: Which Is Better?
Overall it’s been found that affiliate marketing is better then dropshipping. There are a variety of important reasons why that we’ll be highlighting, that just make affiliate marketing more scalable and easy to do then nearly any kind of dropshipping.
Here’s a list of reasons why. affiliate marketing is better…
- Affiliate marketing can be completely automated.
- Affiliate marketing is more easily scalable
- Affiliate marketing has higher profit margins
- Dropshipping has more risk associated with it
- Drop shipping is less reliable and consistent
- There is a learning curve and difficulty to learn how to do dropshipping
Now let’s go through in more detail what makes affiliate marketing stand out as a much better choice to choose from.
Affiliate Marketing VS Dropshipping Earning Potential
While both affiliate marketing and drop shipping are businesses that can be profitable, they differentiate in the total average earning potential they each have.
With dropshipping there are various more costs and activities to example. So the costs of managing product, finding product, testing product, and more – take down the total earning potential of dropshipping.
There are nearly zero costs related to doing affiliate marketing, except if you’re paying for leads. Because of this, and the average sale of dropshipping only allowing you to earn 10-30% of the sale, affiliate marketing comes ahead.
In affiliate marketing you can earn as much as 50% commissions per sale, and sometimes even more. As well, as an affiliate marketer you can sell services which can increase your earning potential more through customer retention.
Affiliate Marketing VS Dropshipping Pros And Cons
Advantages Of Affiliate Marketing
There are many pros of affiliate marketing that put it ahead of dropshipping in most cases. Here’s all of the important advantages below…
- High profit margins
- Very little costs
- Easy to get into
- Can sell both products and services
- Easy to scale
- Can be automated
- Little risk
While affiliate marketing is comparable and similar to influencer marketing, it takes less time for the business to become profitable. Especially when compared to dropshipping which is not similar to either one.
Disadvantages Of Affiliate Marketing
Even while affiliate marketing is a great side hustle or career for any entrepreneur to consider, you’ll find that there are a few disadvantages.
- Takes time to build up a following
- Reliant on CPA networks and affiliate programs to be consistent
Advantages Of Dropshipping
While the practice of doing dropshipping is not as scalable or profitable, it is still a potential type of business you can start. Let’s highlight the most important advantages of dropshipping.
- Can sell nearly any kind of product in any industry or niche
- More profitable once you have became an expert and have years experience
- Anyone can do it
Disadvantages Of Dropshipping
The dropshipping trend has seemed to decline as less and less people are choosing to become dropshippers themselves. Let’s go through these disadvantages of dropshipping…
- High costs to get started
- Takes a decent amount of time to learn
- Takes many different resources to be run properly
- Not easily scalable
- Considerable time needed to run on a daily basis
- More legal complications
Dropshipping is however less time consuming then freelancing which is also different.
Final Thoughts
There are very few affiliate marketing alternatives that are able to match how effective of a business model it is. While there are many different businesses an entrepreneur could start, it seems that the only close comparison to affiliate marketing is network marketing. Otherwise, affiliate marketing is possibly the best kind of business any entrepreneur should learn how to do.
As well, businesses looking for ways to get into more marketplaces, should consider investing in affiliate marketing as well.
Thank you so much for reading through this guide on which kind of business is the winner. It seems that affiliate marketing comes out on top for a variety of important reasons.
With our kindest regards,
Jon Weberg
Richard Weberg