The Difference Between Dropshipping and Affiliate Marketing
Many people have this question, what is the difference between Dropshipping and Affiliate marketing? They are both common and different, let me explain below.
What is Dropshipping?
Dropshipping is a business model equivalent to a middleman, the seller does not need to have inventory of goods, directly send the order information to the supplier, the supplier on behalf of the seller to process the order and send the goods to the final customer. In fact, is a form of distribution, is now often said to be a form of generation. In the previous distribution industry, the retailer has to personally handle the order, but with the development of the network era, the supplier is now sent directly to the customer on behalf of the goods, thereby simplifying the intermediate links of the retailer.
When it comes to Dropshipping, many people immediately think of Shopify, Shopify is also because of this Dropshipping model, in the past few years exploded in the world. As we all know, Chinese goods have a big advantage in the global price competition, so in 2015, a Shopify app plugin called Oberlo was born, which can directly connect to the Aliexpress platform (foreign version of 1688) and import goods to sell in their own stores. In 2017, Shopify acquired this app plugin and optimized it to make Dropshipping a model known to everyone.
Here a little introduction to Shopify, already know the reader can skip this part, there is a part of the Shopify is not very well known.
Shopify was established in Canada in 04 to provide sellers with online sales of goods e-commerce platform, which solves the website for sellers to build, logistics, collection and other marketing aspects of the problem, simplifying the procedure for sellers to open a store online, it can also support the offline physical stores on the same platform for management. Due to the white-hot competition and platform policy changes in the past few years, many Amazon sellers have begun to use Shopify to open their own stores, so Dropshipping has become a sought-after sales model for many sellers.
Dropshipping's partner - Oberlo
Oberlo is an application plugin in Shopify, by searching for the products you want to sell in Oberlo, and then importing the product information to your store to sell. This is the same as we find affiliate products in Affiliate Network, an affiliate marketing platform.
Find Oberlo in the Shopify App Store, click in and add it to your Shopify store.
Once the store is connected to Oberlo, you can find the products you want to sell by entering the product name in the search bar, or by the categories within it. Once the products have been imported, your store is ready to start selling.
Pros and Cons of Dropshipping
Everything has its two sides, and Dropshipping is no exception.
- Low risk level of inventory. No need to worry about the backlog of inventory, you can start your online store with 0 inventory.
- Low input cost. You don't need to rent any warehouse or other places to store products or even office space, which greatly reduces the investment cost for entrepreneurs.
- You can go to test the productsquickly. Through various online advertising strategies such as facebook, you can find products with market potential faster.
- Supply chain uncertainty. Because the product is not yours, you can't predict and control the supply of the product and thus out-of-stock situations. When you have a product that is just crackling with sales and your supplier tells you that product is no longer being made, you run the risk of out-of-stock, which can directly affect customer churn and shopping experience, and even affect your reputation on the collection platform and lead to closing your collection account. So you need to make sure your supply chain is stable to avoid out-of-stock situations.
- There is no guarantee of order processing and shipping timelines. After you send the order to the supplier, you can't guarantee whether the supplier will ship the goods on time and what kind of logistics they will choose to send your goods to the customer. Therefore, sometimes you have to use some discount offers in order to win back your customers who are unhappy with the delayed delivery or complaining about the slow delivery time, which will reduce your profit income and also affect your secondary sales. Order processing and logistics speed is now the most important thing to care about when making online purchases, and is one of the most important considerations for whether a customer will buy your product.
- After-sales service issues. Do not think that the goods sent to the customer is the same as a great success, collect the money and finished. After-sales service is not finished, the product in transit will happen damage, product loss, the customer received the product found that the goods are not the right version or received the product can not be used and so on the problem you have to deal with.
Should I choose Dropshipping or Affiliate Marketing?
There is no right or wrong way to choose either way to start an online business, but ultimately you have to ask yourself what way is more suitable for you. Everyone's purpose is different, so set your own direction to be more motivated to execute each thing.
Dropshipping and affiliate marketing both are low-risk investments in terms of capital investment, no inventory pressure, lowering the threshold for you to want to start an online business, especially for people who have just graduated. In terms of profits, Dropshipping allows you to control the price of your products to maximize profits, but don't forget that there are costs involved in the Dropshipping process, such as advertising and so on, so you should also take this part of the cost into account when setting prices.
Affiliate marketing revenue is earned on a percentage of the merchant's product price, and affiliates have no control over the price of their products. In terms of customer service, affiliate marketing doesn't have to deal with any pre-sales or post-sales issues, it just needs to lead the customer to the merchant's website and that's it. Whether the customer eventually buys the product or not depends on the merchant's marketing strategy.
So from the point of view of results, Dropshipping is an immediate result, through the product sales can be judged whether the product can achieve their own set profit goals, while Affiliate Marketing is a long stream, it is not a moment to see the results, it is necessary to persist for a period of time and to create more and better wealth.
Finally, it is recommended that the best choice to do Dropshipping Shopify to build a site, and the best choice to do affiliate marketing WordPress to build a site, this is my personal experience, if you want to use WordPress to build your Dropshipping site is also possible, but you will soon understand why I will give you this advice If you want to use WordPress to build your Dropshipping website, you can, but you will soon understand why I am giving you this advice.
May your heart be in the right place soon!