Most entrepreneurs scratch their heads when it comes to dropshipping versus affiliate marketing. Which is the better business model to pursue? Is an affiliate business more profitable than a dropshipping business? Which is easier to manage and grow?
In this article, we’ll break down everything you need to know about dropshipping versus affiliate marketing. Read on to learn which is the right online business for you.
Dropshipping vs. affiliate marketing: Overview
Dropshipping is where the supplier carries the inventory and ships it to the customer on your behalf. With dropshipping, you set your own prices and are responsible for marketing. Whatever profits you earn from sales are yours to keep.
Similarly, in affiliate marketing, the supplier also carries inventory and ships the product. However, while you’re still responsible for marketing and sales, you don’t get to keep all the profits and only receive a commission.
Let’s take a closer look at the dropshipping and affiliate marketing businesses.
What is dropshipping?
As a business model, dropshipping allows anyone to sell products from suppliers on their own website. When someone purchases a product from the dropshipper’s website, they place an order with the supplier. The supplier then packages and ships the product to the customer. There is no need to carry any inventory at all.