In Alibaba dropshipping, you sell the supplier’s goods with your markup, without buying the goods in advance. In the case of affiliate marketing, you sell the company’s product or service and get a percentage of the deal. Although both Alibaba dropshipping and affiliate marketing have their characteristics, there are some similarities between them:
- Running a business doesn’t require you to have and ship the product yourself.
- Business models with relatively low risks.
- High profitability with the right approach.
- Ability to launch a business quickly and easily.
- Require about the same marketing skills such as creating advertising creatives, attracting traffic, etc.
- Low initial investment.
Despite their similarities, branded dropshipping is more profitable than in the case of affiliate marketing. Especially if you use dropshipping plugins like Ali2Woo and eBay2Woo that help manage products on the website.
How to make money in dropshipping?
Income in dropshipping is the difference between what you earn from selling a product and what you pay your supplier. This income should be high enough to cover marketing costs (traffic, software, hosting, design), plus you need to make some profit as well. Moreover, the initial investment should not only cover the start-up costs but also provide a cash buffer for the provider. Remember that it can take several days to process a customer’s payment, while you have to pay the supplier when a customer places the order.
How to make money in affiliate marketing?
In affiliate marketing, your income is the difference between your payout for the offer and your marketing expenses. That’s it. You don’t pay the owner of the offerer. Offers that are ready to promote are free in affiliate marketing.
So you’re skipping the major cost factor. Put this together with the other benefits of affiliate marketing like scalability and flexibility. You’ll still have to pay for traffic and tools like an ad tracker, but it’s the same spending that’s required with dropshipping as well.
What is more profitable: dropshipping or affiliate marketing?
It is impossible to say with certainty which model is better – both have their advantages and disadvantages. In affiliate marketing your main responsibility is advertising, in dropshipping there are many more business processes to pay attention to: goods, suppliers, marketing, online store, customer support, payment system. But with special dropshipping plugins like Ali2Woo and eBay2Woo, all that can be automated (you can even sell products as an affiliate marketing specialist using AliExpress Affiliate Key). These dropshipping plugins can help you to start dropshipping and begin earning money as soon as possible.
Traffic can be handled independently. It is not difficult for one person to organize and establish a stable dropshipping business. If you are just starting your journey in Internet entrepreneurship, we recommend you to begin to understand marketing or immediately find a partner who already has enough experience to organize a business.
If you have a lot of experience with advertising tools and make money from them, we advise you to test such a niche as dropshipping. If you don’t have enough knowledge and experience in this field, find a partner and start exploring the direction together and then divide the responsibilities. This way, you can find out which model of work suits you better. Subsequently, you can start working with partners who will take care of most of the advertising.