Having a side hustle is important, it not only gives you some extra freedom with your money but also gives you a sense of security.
There are many ways of earning a side income and some people turn their side income into a mainstream profession.
Side hustles can be difficult to start but once you have pushed through the difficult initial phase you can rally and earn well.
As a beginner two of the most common side hustles are affiliate marketing and drop shipping, and it is natural for beginners to get confused between them.
After all, both of them include selling products and getting a percentage of commission.
But what is the actual difference between them?
In this blog, we are going to discuss the same.
We will be discussing what affiliate marketing and drop shipping are and what is the difference between the two.
Plus we will also be discussing which one is better of the two.
What is Affiliate Marketing?
In affiliate marking, you will be displaying products from some website on your blog or website, you will promote and advertise the product, and you will talk about its benefits and uses. Also in general, you will be compelling people to buy that particular product.
When the person will click on the buy option he will be directed to the website whose product you are advertising.
If the person buys that product then you will earn a percentage of the amount of the product called commission.
Hence, the model of affiliate marketing is the advertising model, where you advertise a product and sell that product to the reader.
Steps Involved in Affiliate Marketing
Let me further simplify the process of affiliate marketing by breaking it down into steps.
- You generate an affiliate link of the product by joining the affiliate program of a website and then placing it on your website or blog.
- The consumer reads about the blog and shows interest in buying it.
- The consumer is directed to the main website of the product, from where he buys the product.
- On every successful purchase, you earn a commission.
What is Dropshipping?
In dropshipping, the process is similar to affiliate marketing.
You first make your website and then find products according to the niche of your website. You pick products from different vendors and place them on your website.
Here you can fix the cost of the product according to you.
When a person buys the product you get to keep the money that was made above the initial price in the original store.
For example, you saw a bottle for $2 and you placed the product on your dropshipping website for $5.
When the person will buy the product you will get $3 as commission because you paid $2 to the vendor and the rest is your commission.
Steps Involved in Dropshipping
Let me break down the steps involved in dropshipping.
- You collect the product links from the different vendors and place them on your dropshipping website.
- Then you set the price according to you on your website.
- If a person buys the product you get to keep the difference between the vendor’s price and your set price.
Difference Between Dropshipping and Affiliate Marketing
Now that I have told you in-depth what dropshipping and affiliate marketing is, let me also tell you the difference between them.
On the surface, both of them seem as same. After all, you are getting a commission in the end.
But the reality is that both of them may seem alike but have one big difference between them.
Price fixation: The main difference between dropshipping and affiliate marketing.
So, the main difference between dropshipping and affiliate marketing is the ability to fix the price of the goods on your website.
In affiliate marketing, you can only showcase the price that is fixed by the vendor, and hence the commission is also fixed.
Whereas in dropshipping, you can change the price of the goods on your website according to your will.
This means that in dropshipping you get to choose the commission.
So this was the main difference between dropshipping and affiliate marketing.
Now that we have seen what dropshipping and affiliate marketing are and what is the major point of difference between them, let us also discuss the pros and cons of each and then decide which one is better of the two.
Pros and Cons of Dropshipping
As mentioned above that in dropshipping you have the freedom to choose the commission you will be making, however, it is not as easy as it sounds.
If you sell a product at a significantly higher price then customers will never buy from your website.
Plus there is a lot of competition in dropshipping.
So what are the pros and cons of dropshipping?
Let us look into them in detail.
Pros of Dropshipping
Let us first start with the pros of dropshipping.
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Immediate payouts
In dropshipping, there is no such thing as called “threshold sale”, which is the minimum sale that you need to do and you will be paid only after that.
There is no qualifying sale matric, you sold one product and you will receive the commission of that product, that’s it.
This makes drop shipping a lot less hectic task.
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Good earning
In dropshipping you are the one that fixes the price of the good on your website, hence you can not only increase the price of the good but decrease it for some time to gain traffic.
With this, you can earn a good amount.
Commission in dropshipping is based on you.
You get to fix the price hence you can play with it seem necessary.
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Long-term customer base
In dropshipping, you have your online store and if a customer is satisfied with your product and services then he will come back again and again.
This forms a long-lasting customer relationship which is very beneficial for the traffic as well as sales of you your website.
So these were some pros of dropshipping.
Now let us look into some cons of dropshipping.
Cons of dropshipping
Just like any other thing dropshipping too has some hiccups, let us talk about them one by one.
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Customer support
In dropshipping, you have your store, and you won’t be directing customers to the vendor hence, you at times need to address the grievances of the customers.
For a beginner, it can be a hectic task, but this also helps in building reliable customer support.
Plus you can outsource the work of customer support, there are many freelancers available who can provide you with customer support services.
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Shipping
Majority of complaints that you would be addressing while drop shipping would be of late delivery.
In dropshipping you have no control over shipping, many times there is a delay in shipping which results in a bad review.
Delayed shipping is one of the most demotivating factors of dropshipping.
So these were cons of prod shipping.
Pros and Cons of Affiliate Marketing
Now let us talk about the pros and cons of affiliate marketing.
Pros of Affiliate Marketing
Let us first begin with the pros of affiliate marketing.
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Great for beginners
Affiliate marketing is a very easy-to-start source of income plus it is very easy to start.
You don’t have to manage a store of handle andy customer support all you need to do is write excellent blogs for your target products and you will be good to go.
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A great way of earning a passive income
If you want a passive income source then affiliate marketing is a very good option for you. You don’t have to spend hours managing the store and finding products and deciding the cost.
All you need to do is put the affiliate link and you will get a pre-decided commission.
Hence, it takes away all the math and gives you a simple and clear path to follow.
Cons of Affiliate Marketing
Here are some cons of affiliate marketing.
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No control over the commission
As we told you that in affiliate marketing you can not fix the price according to you, which means that you have a fixed commission that you can earn.
Generally, that commission is not very high and you have to sell a bunch of products to meet your needs.
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Delay payments
In affiliate marketing, there is a lot of chance of payment delay.
In affiliate marketing, you will be paid at the end of the month but that time can be delayed due to the backlog or some other financial issue.
Which can be demotivating.
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Affiliate links can be removed
Many people who don’t have much knowledge about how affiliates work thinks that you will be earning commission out of their pockets.
Which is not true.
Affiliates do not influence the price of the goods.
But still, this misconception leads to people removing your affiliate link and buying directly from the merchant
So these were the cons of affiliate marketing.
Which One is Better: Affiliate marketing Vs Dropshipping
There is no sure winner for this.
Affiliate marketing is great for beginners and people who do not want to give extra effort for earning money however, the composition is low.
In dropshipping, you get to choose the price of the product plus you have to offer some additional service like customer support but the commission is very good, and it is decided by you.
Hence there is no clear winner, both of them have their pros and cons.
One can suit some and not the other and that completely depends upon your goals.
What do you think is better?
Tell us in the comments.
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