Hey guys in this article we’re going to be talking about dropshipping vs affiliate marketing which one is better? affiliate marketing or dropshipping with Aliexpress after the last article where I talked about how we make over $500 a day passively from affiliate marketing we had a lot of people asking which business model is best, so in this article I’m going to be answering the following questions: Which method is the easiest for beginners to make money with? Which method makes the most money? Which method is the most passive? And as you’re going to discover there’s no one that’s better than the other, they’re quite different and they each have their own advantages and disadvantages so let’s start.
We’re going to start out there by looking at what each of the different business models is and how they make their money! We’ll start with affiliate marketing, in this business model it is your goal to refer customers or clients to another business and if they make a purchase from them you get a commission for example here is an affiliate web site that has several products that they sell on their website, their most popular product is a personalized report based on your name and your date of birth and it cost $77, well if you sign up to their affiliate program and refer customer to them you get a 65% commission on that $77 sale price the way that you refer customers to them is that they give you what is called a hot link, a link with a tracking code embedded in it. And when someone clicks on that link and purchases the report you get that commission on the sale, so obviously your goal here is to get as you can to click on the link and then purchase the report, so you might start making YouTube videos about it, you might start up a blog about numerology, you might even choose to run paid to it though as I’m going to talk about later, that’s a little bit more tricky with affiliate marketing. Now let’s look at how you can make money with Aliexpress dropshipping
this is when you set up an online store using a platform like Shopify and you list products for sale in it, that is being sold on Aliexpress. Aliexpress is a web site that lets you buy items individually, directly from manufacturers, they’re based in China so their prices are super cheap, so what you do is you take an item on Aliexpress and you list it in your store and put a huge markup on the price, you then run paid ads to your store with Facebook ads usually being the best as they are low cost and highly targeted and then when customers come to your store and purchase the item in it, you then go to Aliexpress and purchase the item that the customer bought and get it shipped directly to them while keeping the difference in profit, this process is called dropshipping.
As you can see both of these business models are extremely different and they each have their own strengths and weaknesses, so take a look how each of them work and think about which one looks the most fun and interesting to you and which one would play off your strengths more, which method is the easiest for beginners to make money? As I’ve said before on this blog, one of the challenging aspects of starting an online store is that nobody knows who you are, when you advertise your store to someone on Facebook, you are asking them to come on in and buy an item from you despite not knowing who you are, despite the fact that you have built up no trust or credibility with them, and here the advantages of affiliate marketing for beginners, your merchant has most likely already done this part for you and has built up a lot of trust and credibility. Take Numerologist they invested in an amazing domain, they have an enormous Facebook page with more than 718,890 followers, they have huge amounts of free content on their site and they even have invested tens of thousands of dollars into creating quizzes like their like path calculator.
When you see the customer to Numerologist you have the benefit of the brand and the trust that they have built which will make converting sales easier, on the other hand with affiliate marketing running paid traffic can be a bit of a challenge especially if you’re trying to direct traffic directly at your offer, and that’s pretty important to keep in mind because as we’ve discussed on this blog while free traffic is great to have it is slow and you also need to learn extra skills like search engine optimization, but pay traffic is usually the fastest and easiest way for beginners to start making money online. Now consider this when you drop shipping you have huge to work with, so you can make a lot of profit per sale, take this dream catcher necklace
on Aliexpress you can purchase it for $1.02 when you add the cost of fast ePacket shipping which is $2.30 the total that you will pay to dropship this item is $3.50, well necklace like this can sell for $10 easy so that gives you almost 70% margin to work with when spending money on ads, on the other hand while Numerologist does admittedly have a very high commission rate of 65% vast majority of online products and offers do not have commission rates that high usually the limit if 15%, that means in that you’ve got a much smaller margin to work with when you’re running ads to you affiliate offers, plus if an affiliate offer is a particularly high conversion one, then it’s going to become saturated very quickly with affiliates trying to run paid ads for it, so if you choose affiliate marketing and you get the bonus of the fact that your affiliate merchant has gone ahead of building up brand awareness and trust which will make it easier to get higher conversions, but with dropshipping you have the advantages that you have bigger margins to spend on paid ads, and plus it’s likely that your niche is less saturated.
Which method makes the most money? now both methods can make huge amounts of money and when I say huge amounts of money I mean millions of dollars every year, something to keep in mind though is that while yes with affiliate marketing, you can earn super high commissions, you are ultimately giving your customers your affiliate partner which in this industry will refer to as the merchant, here’s what I mean let’s say that you’re going to into the Numerologist or new age niche you plan to sell items in it and you’ve got two options to pick from; option 1 create a website that recommends Numerologist reports, option 2 create an Aliexpress dropshipping store that sells released items and accessories, well here’s the thing if you choose option 1 then you will make fast commissions at the price though of giving up your customers information to your merchant partner, and you know what they will do! They will use that information like their email to market them again.
To show you what I mean I went ahead and purchased a personalized report from Numerologist
within a week of buying I had received multiple emails from them like many other affiliate merchants, they don’t just plan on making money from one of sales they turn their customers into loyal followers and repeat buyers, as an affiliate then you are constantly on the treadmill of making one-off sales because the moment that you send your customer to an affiliate partner is the moment that you lose them, but it had chosen option 2 and built a dropshipping store then this wouldn’t happen to you, why! Well it’s because when someone comes into your store and buys an item from you, it’s you that gets your customers details, it’s you gets your email addresses, it’s you that gets to build up a list of people, that you know are interested in buying new items, which means that it’s you that gets to see and follow up emails to customers recommending that they purchase more items from you…
you know for example that they like color changing dream catcher necklace
so there’s a good chance that they’re like another necklace as well. But you know what you can do after few weeks or maybe even a month after your customer has purchased this item from you and you’ve been recommending other ones to them you can send out an email to them that says; “Hey we’ve found this great personalized report that takes your name and birthday and uses that to identify your strengths weaknesses and even predict the future click this link to get your own personalized report now”, so now you get to combine drop shipping and affiliate marketing together get to take advantage of the super high commissions after you’ve given yourself some time to upsell more items to them a lot of people don’t think about the importance of retaining your buyer list and a drop shipper you get to do this, and it crucial for marketing long term money, because what you can do is you can take that list of buyers and you remark it to them again and again, you can turn your customers into a repeat buyers.
Which method is the most passive? I will be upfront here there is a clear winner here affiliate marketing is usually a lot more passive than drop shipping is which is a major reason why we have diversified into it, and the reason why! Is because of the issue of order fulfillment, consider this and the state of my article last week here on Meshrange we’ve got several articles that earned over $360 a day in commissions, well here’s the thing if I got into a car accident tomorrow while still recovering those articles still be getting traffic to them, every day people will be reading those articles and everyday people will be clicking on the affiliate links and everyday people will purchasing those products, all of these will be happening automatically it doesn’t matter that I’m tripped in a hospital bed, this would all be happening on autopilot on the other hand, let’s compare that to a dropshipping store, I’ve got my store up I’m running Facebook ads to it I’m seeing traffic to my store and it’s converting people are buying items which are great, I’m making money but I need to fulfil those orders as soon as possible, when someone purchases an item from me I need to go to Aliexpress and order the item and get it shipped out to the customer and this process is called order fulfillment, this process admittedly takes me in minutes especially if you’re using a Shopify essential app, but someone every day still needs to come in and fulfill each of those orders and plus you will also need to reply to customers emails each day as well, but with affiliate marketing you don’t have to worry about any of that, it’s Numerologist that sends the customer their reports and it’s Numerologist that answers the customers emails and they answer a lot of emails.
Now don’t worry you can still turn a dropshipping store into an automated asset by hiring someone to run your store for you and run your ads, and in reality if your store is doing around $1000 to $2000 a day in sales then if you’ve got a semi-automated app like those here, only going to take one to two hours a day to manage, so it’s not a huge time but it doesn’t compare to affiliate marketing which is passive, with an automated traffic funnel in place you can literally make money in your sleep.
As you can while both business models are great they each have their own pros and cons, so pick one that’s right for you and if you find affiliate marketing sounds great, if you find this post exciting then you should be sure to subscribe to my newsletter to get the newest articles first.