Is affiliate sales and dropshipping the same thing?
Short answer to this question is a huge, no. They are so not the same thing. On mywifequitherjob.com, the writer explains, “In other words, they want to be able to make money with as little active effort as possible. They don’t want to have to carry inventory or do product fulfillment which is why I receive many questions having to do with either running a dropshipped online store or becoming an affiliate marketer.”And that is my biggest hint that the two occupations are different.
Let us break it down some more, because the writer is helpful enough and clear enough to help us out here, “Dropshipping is a way to run an online store where you don’t have to store inventory and you don’t have to ship product. The way it works is that you set up your storefront and collect money just like a regular store. But instead of having to pack and ship the product once you receive an order, you simply place an identical order with the distributor at a wholesale price and the distributor takes care of shipping the product to the end customer for you. The amount of profit you make is your selling price minus the wholesale price.” Right? So, drop shipping involves an online store and a distributor who sends the product for you.
What about affiliate marketers? What are those? And what exactly do they do? How are they different from drop sharing companies and stores?
“Affiliate marketing is when you refer a customer to another business and take a commission if the customer makes a purchase. In effect, your website acts like a marketing and referral engine and you don’t actually sell any product. In addition, you don’t directly collect any money either. Once a sale has been made, the affiliate business is responsible for paying you your commission which usually occurs on a monthly basis.”
So, what are the advantages of both positions?
With affiliate marketing, “The main advantage of affiliate marketing is that the entire sales process is completely hands off. Once you refer a customer to a business and the customer makes a purchase, your job is done. You don’t have to worry about product fulfillment. You don’t have to worry about customer support. You just get paid your commission and that’s it. With a drop shipping online store, the customer is effectively making a purchase from “your store” even though you are not the one fulfilling the product. As a result, you are responsible if the customer does not get their shipment on time. You are responsible if the product is defective or arrives broken. Therefore, you will have to devote a certain amount of time dealing with customer issues especially if your dropship vendors are not reliable.”
Nevertheless, drop shipping stores have a similar disadvantage, “The main advantage of dropshipping of course is that you don’t have to manage inventory or product fulfillment. However, since you are selling the product under your own store name, you are still responsible for customer support.”
Is dropshipping a good way to earn money?
A short quick answer for this question is a resounding: yes! It is a good way to earn money, but it is also a dangerous way sometimes, too, so you need to be careful. Before we get ahead of ourselves, let us talk about what drop shipping is and how it works. According to bloggingexperiment.com, “A dropshipping company buys inventory directly from a manufacturer and stores it in their warehouse. As a client of the dropshipping company, they allow you to sell whatever products they have. If you sell something, you pay the dropshipper for the product plus shipping, and they ship it to your customer for you.”
Onlinebz.com shares, “You open an eCommerce store to market some products, customers order products from you and pay the higher price you charge, and you order the products with a lower price from dropshippers. They can be wholesalers or manufacturers. They charge you with a lower price and directly ship the products to your customers on your behalf.”
While it is a successful business opportunity, it does come with warnings and negative effects that people criticize.“However, there are complaints about dropshipping e-commerce being a “too low margin” model. This must be true for some products or niches. The solution to fix this is to spend time finding higher-margin products to market, which is not as easy as it sounds. The margins have to be high enough to factor in a good CPA while making the prices still competitive. Without planning these cautiously at the start, the business can be killed in its infancy. In order to enjoy all the convenience and benefits (saving time, money, workload, inventory, etc.) dropshipping can offer you, doing thorough research to find the right niches and products is a must. This research alone could be one of the most time-consuming activities for any e-commerce owners who look for real success online.”
There are some things to keep in mind before starting a drop shipping business, too. “Will the weight of products matter for successful dropshipping e-commerce? I don’t have e-stores carrying very light and very heavy items for comparison, but this is what I observed online. Normally eCommerce owners prefer to sell lightweight goods with a maximum weight of 10 lbs. This is very easy to understand: If an item costs $10 with a shipping cost of $45 due to its huge weight, it is not going to be appreciated by online customers.”
So, the weight of the package’s matters, too. But, the bloggingexperience.com brings some good news, “Rather than forking over most of your profits to a dropshipping company, you should consider buying inventory directly from the manufacturer instead. Typically, this will allow you to buy products at 50% off the retail price instead of the 25% off you were getting from the dropshipper (dropshippers mark everything up 25% on average).” So, you can make profit. It is just about smart choices and careful consideration of each product being shipped.