Dropshipping vs Affiliate Marketing 2024: Which PAYS More?

Dropshipping vs Affiliate Marketing: Which one is best to make money in 2024? If you are still confused, you’ve come to the right place!

Affiliate marketing and Dropshipping are two different things with many differences and also many similarities.

Now, whether you’re looking for a side hustle or a full-time job to take over your current job, both of these business models can help you get there.

In this blog post, I am going to discuss Dropshipping vs Affiliate Marketing so that you can make the decision on what is the better business model for you to run.

Let’s Drive in!

Dropshipping vs Affiliate Marketing in 2024:

Ready to launch your online empire? But wait, which path to choose: building your own brand with dropshipping or becoming a master influencer with affiliate marketing?

Affiliate marketing is a type of performance-based marketing where an affiliate earns a commission for promoting other people’s or company’s products.

Dropshipping, on the other hand, is a retail fulfillment method where a store doesn’t keep the products it sells in stock.

In dropshipping, the magic happens behind the scenes. Instead of stocking shelves, the store simply forwards orders to a supplier who whisks the product right to the customer’s door.

Key Statistics

Let’s take a look at some statistics before we get started and dive deep into what each one means.

Year	Metric	Estimated Value	Source
2024	Affiliate Spending	$15.7 billion	DemandSage, Astute Analytica, Rewardful
2030	Market Value	$36.9 billion (including sales generated by programs)	Astute Analytica

Affiliate marketing that is continually growing and expanding, which isn’t that different from a dropshipping business model.

According to resources, more than 80% of brands have affiliate programs, so this, of course, has to do with affiliate marketing.

If you are not sure what exactly this means yet, we’re going to dive into the definitions very soon.

But first, it’s important to take a look at these numbers.

America is the biggest player in the affiliate industry with a 39% share, so you know where to get most of your affiliate marketing links once you get started.

Nearly 64.48% to 79.3% of affiliate marketers generate traffic by blogging, and that is another thing that we’re going to talk about when I get to the affiliate marketing section.

Perhaps, 94% of publishers use multiple affiliate marketing networks.

So, just like if you are dropshipping, and I always advise in my blog to work with multiple dropshipping suppliers and not just one, this is how it works also for affiliate marketing.

It’s the same concept. Advertisers generate between 15% to 30% of all sales from affiliate programs.

Now, granted, this is not all affiliate programs. Some will even give you just a small two percent, but with the compounding effect, that could be a lot.

Of course, depending on what item you’re selling or what product you are marketing with the affiliate program and how many sales you can make from that.

Affiliate marketing is responsible for 16% of global eCommerce sales. Now, the majority after that will, of course, be dropshipping, but affiliate marketing is also a growing market.

And now, let’s talk about the dropshipping market size for just a second.

Feature	Statement	Analysis
Market Size in 2030	$621 million	Likely inconsistent with the high growth rates expected in the dropshipping industry.
CAGR	Not mentioned	Likely inconsistent with high growth rates expected in the dropshipping industry.
Source of figures	Missing	Limits credibility and context assessment.
2023 Market Size	$162 million	Potentially valid for a specific niche, but not representative of the overall market.
Comparison to other reports	Mismatch with major research findings like Maximize Market Research (USD 1426.44 billion) and Market Research Update (USD 599940.91 million).	Indicates an unlikely scenario for the overall market.

The dropshipping market size between 2024 to 2030, which is a forecast, is projected to reach 621 million dollars.

Now, for comparison, in 2023, which was the year before, we reached 162 million dollars.

So, if you can notice the difference between 162 million and 625 million, we’re talking about a five times increase from last year. That is 5x in the next five to six years.

Data from Google Trends shows a significant increase in searches for ‘best Shopify alternatives‘ over the past year, suggesting dropshipping may be increasingly perceived as costly.

So, for those of you who are asking yourselves if it’s too late to enter the world of dropshipping or if last year or if two years ago or five years ago was the gold mine and it was the best time to join, well, this marketing is going to continue growing and multiplying itself.

So, there is no better time to join than now and one year from now, you will regret not doing it one year ago, just as time moves forward.

We always look back and say these things, and according to these forecasts, this is not expected to go anywhere but actually continue growing.

So, it is not too late to join dropshipping, and it is definitely not too late to be an affiliate marketer.

Now, let’s go over these terms and understand more in-depth what they mean.

Affiliate marketing strategies

What is affiliate marketing? In affiliate marketing, you earn money by promoting other companies’ products or services.

It’s kind of like dropshipping where you are selling someone else’s product.

Only here, the buyer is not paying you the money to purchase that product or service, but you’re giving them a link, your own unique link, which they can click on and then go to the seller’s website.

Because you aren’t the seller here, you’re just the affiliate marketer. So, they’re going to click on your link to go to the seller’s website, to that company’s website, and purchase the product from there.

Only when the customer uses your unique link to get to that website, then that company see that the buyer came from your link, meaning you are going to get a certain percentage off of that sale.

So, that is your profit. You don’t have to hold any stock, you don’t have to hold any inventory, and you don’t have to worry about payment methods because you are not dealing with the payments yourself.

The customer is purchasing the product from that company, which is different from the dropshipping business model.

The Ways to Promote Affiliate Links:

There are multiple ways for you to share your affiliate links with your audiences.

For example, if you like social media, you can use platforms like Facebook or TikTok or create YouTube videos and promote the product or service that you are trying to sell.

Then, add your affiliate link in your bio, in your video description, or whatever platform you use to create that shout-out for that product.

And of course, your viewers, and your audience will go ahead and click on that link.

When crafting product descriptions or any content, the use of a paraphrasing tool can be helpful.

While it can be a convenient tool to generate alternative phrasing and avoid direct duplication of content.

Another way to do it is to have your own website. A blogging website is a great way to promote affiliate links via blog posts.

Because, when you’re a blogger, it might be true that you have a specific niche. Like, let’s say, you joined as an affiliate to some big pet store, and you want to send people to that store to purchase their products.

So, what you’re going to do? Maybe, create your own pet blog, create great content for pet lovers, and promote affiliate products or services.

By creating high-quality content, you can attract organic SEO traffic to your blog and when someone clicks on your link and makes a purchase, you earn a commission.

However, Affiliate marketing is a great way to earn passive income.

Pros of Affiliate Marketing:

One of the pros of becoming an affiliate marketer is that it has a low-cost startup. You don’t need to create a brick-and-mortar company, so your costs are minimal.

If you’re posting things on social media, your cost is zero. If you’re creating your own website, that could cost you $70 – $80, which is a very low startup cost. It also comes with low risk.

If something happens and your business isn’t working well, you’re not really losing any money.

You just lost some time, but that’s not a bad thing because you have just learned what doesn’t work, and now you can continue working on what doesn’t work.

Cons of Affiliate Marketing:

However, there are some cons to affiliate marketing. One of the cons is the high level of competition.

You are not the only affiliate marketer who’s going to that company to get your own unique affiliate links and then trying to market it out.

On the other hand, you can do it in your own unique way. You can do it better than your competitors and always beat them to it.

Affiliate marketing is a commission-based payment model, meaning that you earn a percentage of the sale. If you’re not making enough sales, then you won’t make much profit.

Another con is that it requires patience and learning. However, if you have patience and enjoy planning, then affiliate marketing could be a great option for you.

Dropshipping Business Model

Dropshipping is a business model where you host your own online store and sell products from various suppliers.

Platforms like eBay, Shopify, Wix, Facebook Marketplace, WooCommerce, and more can be used for this purpose.

Suppliers such as AliExpress, Alibaba, Amazon, China Brands, and CJ Dropshipping, among others, offer products for dropshipping.

Automation tools, like SaleHoo, Doba, Inventory Source, Worldwide Brands, and Spocket, make it easier to manage the business.

These tools assist with price monitoring, stock monitoring, automatic orders, and customer service management.

Dropshipping allows you to import products into your store, automate processes, and have thousands of products available for sale.

In the dropshipping model, you operate your online store without holding inventory.

When a customer places an order and pays you, you then purchase the product from your supplier and have it shipped directly to the customer.

This process involves no physical contact with the products being sold.

On the other hand, affiliate marketing differs from dropshipping where you need to promote other companies’ products by signing up for their affiliate programs.

You receive a unique affiliate link that directs potential customers to the company’s website.

For instance, Amazon’s affiliate program offers commissions of up to 10% for sales generated through your unique links.

Many major companies have affiliate programs to leverage recommendations and gain more customers.

Now, where can you actually recommend those links? I mean, you can’t just get links and start joining all kinds of forums and just spamming that link everywhere because it’s not going to work so well.

Get started with a dropshipping business: Try Shopify free for 3 days, no credit card required.

Pros of Dropshipping:

Some pros of the dropshipping business model are low startup budget, just like affiliate marketing. There is no need to hold any inventory since you’re selling other people’s inventory.

It is low-risk and scalable. It is low risk because, once again, you’re not starting a brick-and-mortar business, and you don’t have to put down a hundred thousand dollars just to start a business.

It is very scalable once you get automation. Automation is a huge advantage for the dropshipping business model.

If you’re doing everything manually and need to check the prices and stock statuses every day, you’ll never be able to scale.

But if you’re using automation, then you can easily and definitely scale your business.

Cons of Dropshipping:

One of the cons of dropshipping is that it is highly competitive.

If you’re only targeting one certain country, like let’s say you’re only selling to the US audience and you’re selling what everybody else is selling, then you will notice some saturation and competition.

But if you try different products in different regions and check out new products. You should always test out the market with new niches and categories that you haven’t checked before.

While continuing the run rate of those products that are selling for you, add more products that are similar to them. Then you always will notice a good level of success.

Key Similarities and Differences

So, you’re interested in starting an online business, but the thought of a traditional shop with rent and inventory gives you hives.

No worries, friend! Affiliate marketing and dropshipping offer two hot paths to online business success, both with low risk and effort. But which one is right for you?

Let’s break it down!

Low Effort, Big Dreams: Both models are kinder to your time and bank account than a brick-and-mortar business. You can get started quickly and cheaply, without needing a warehouse full of stuff.

Profit Party: Here’s where things diverge. Dropshipping lets you set your own prices, meaning potentially juicy profit margins (think 10-60%, with 50% being sweet). Affiliate marketing gets you a commission for each sale you bring a seller (usually 1-10%). But hey, even small percentages can add up with enough sales!

Orderly Chaos: Dropshipping means you’re the order fulfillment king (or queen). You source products, ship them out, and handle any customer hiccups. Affiliate marketing? Just send traffic to the seller’s site – they handle the rest.

Customer Care Conundrum: In dropshipping, buckle up for customer service duty. You’re the first line of defense for happy (and grumpy) customers. Affiliate marketing lets you hand off customer inquiries to the seller – peace out!

Scaling Up: Dropshipping lets you automate tasks like order fulfillment, freeing you to focus on growth. Affiliate marketing relies on attracting more buyers to climb the profit ladder.

Investment & Inventory: Both models keep your bank account happy with minimal investment and zero inventory worries. No mountains of unsold fidget spinners here!

Affiliate Marketing: Great if you want a low-risk, low-effort option with minimal overhead, even if profits are smaller. Ideal for bloggers, social media mavens, and anyone who loves spreading the word about cool stuff.

Dropshipping: Perfect if you crave control over profits and scalability, even if it means handling orders and customer service. For the entrepreneurial spirits who enjoy building and managing their own empires.

Remember, whichever model you choose, success requires dedication, marketing smarts, and the ability to roll with the punches. Now go forth and conquer the online world!

Get started with a dropshipping business: Try Shopify free for 3 days, no credit card required.

Which is Better Affiliate Marketing or Dropshipping?

There is not a bad one and a good one, but the better one is dropshipping in this case from the reasons that I already talked about. Plus, let’s add in some more.

We’ve got branding on dropshipping that we can do much better than we can on our affiliate websites.

Even though as I mentioned earlier, if you’re going for a pet niche and you create a pet’s website, it does look like a brand, but you can’t tell people to go to another brand and purchase from them. It just looks kind of weird.

When you have a dropshipping store, and it’s a completely branded store, you create your own brand around it, and your store’s whole visualization theme complements your brand design and style.

It definitely will make it look like a real business, which it is, and your buyers will have the confidence to proceed to the checkout process when shopping at your branded store.

Branding is easier on a dropshipping business. Higher profit margins, as I just explained, because you have full control.

You decide how much to profit from every order instead of the company that decides for you.

Scalability because you can add business automation as opposed to doing everything manually on an affiliate marketing business.

More website traffic when you have a dropshipping store. Even though you can generate traffic, on your affiliate marketing website, when you have a dropshipping store.

It’s a little bit easier to generate traffic there because, on the one hand, as I explained, you can do it on a marketplace where you’re going to get free organic traffic.

You can also add marketing promotions like PPC ads and more things that you can also do for affiliate marketing, but dropshipping. It is an added bonus to your website traffic and loyal customers.

Now granted, you can also get loyal customers on your affiliate marketing website, but when it’s your dropshipping website, the customers bought from you, they purchased from you, and they paid you.

So, they’re going to be loyal to who they paid to and not to the link that you sent them where they actually had to pay over there. And then they will be loyal to that website.

So, for example, if you gave them an Amazon referral link, and they purchased from Amazon, they’re going to be happy with Amazon, not with you.

They’re not going to come back to purchase from you. More likely, they could, but they know that they purchased from Amazon.

So, next time they need that product, they can simply go directly to Amazon to purchase it again.

Get started with a dropshipping business: Try Shopify free for 3 days, no credit card required.

Can You Combine Affiliate Marketing and Dropshipping?

Loyal customers are relevant to the dropshipping business model. Here’s a great question: Can You Combine Affiliate Marketing and Dropshipping?

What if you want to enjoy both of the worlds? Both of the worlds are increasing in numbers, and you want to take pieces from both of these cakes.

That is definitely a possibility, but you will, of course, have to work and put in some effort to make this work.

Now, there are several methods to do it, but my recommendation would be to have a dropshipping website, for example, on Shopify where you have your own customizable website.

There’s a big difference between having a website on Shopify than having it on eBay.

Whereas on eBay, you don’t really have the customer’s information. When someone purchases from your eBay dropshipping store, you don’t actually get the customer’s information.

You get their name, you get their phone number, and you get their shipping address, but you don’t get the most important thing here, which is their email address.

If you have an online store on Shopify, you’ll have your brandable domain name websites where you can have your own.

Also, when a customer purchases from your store, you’ll get their information such as email address which is the most important thing because you’re going to save these email addresses in your database to hook them. 

Then you can send email marketing promotions to these customers, which is one of the best and also low-cost methods for marketing your products.

There are other methods like running PPC ads and so much more. But once you get their email address and you have a list of them, you can start sending them email promotion campaigns.

In those email promotion campaigns, you can promote your own products that you have in your store.

You can also add affiliate links to those emails and send them to that company or that affiliate website where they can purchase that product, and you will make your commission from there.

And/or on your online website, you’ll also have a blog section. So, you’re selling your dropshipping products, but you also have a blog link that takes them to your blog.

Inside your blog, you have articles with affiliate links where they can, of course, read that blog article, click on the link, purchase the product, and you will earn that commission.

So, those are just two quick methods on how you can combine the dropshipping business model with the affiliate marketing business model and enjoy both worlds.

Get started with a dropshipping business: Try Shopify free for 3 days, no credit card required.

Conclusion

I hope this article helped you understand what affiliate marketing, and dropshipping, and what are the key differences and similarities between them.

Also, how you can profit from either of these worlds or even both of them combined.

Let me know if you have any questions or if anything wasn’t clear to you or if you simply want to say hi in the comment.