Dropshipping store vs affiliate store

In this post, we are going to have a look at a dropshipping store vs affiliate store. From what you need to create them, to the biggest difference and advantage of each model.

How to create:

For a dropshipping store and an affiliate store, you need to have a website and a web hosting platform. You can follow the early step of creating a website here.

dropshipping store vs affiliate store

For a dropshipping store.

We have platforms like Shopify, commerce HQ, big commerce, woo commerce, Magento, opencart, and many others being created every day. The advantage of these platforms is that you do not need a separate hosting service. Because, from the platform, you can buy a domain and host your store.



You also get all the tools needed to create and manage your store daily. You get the tools. like the one we saw here to import products from the online mall, you would like. And you can choose from amazon, from aliexpress, from eBay, and many others.

Tools to help you manage your pricing, your inventory, create ads on social media and search engines, even tools to create an invoice if needed.

It is a big package with everything you need.

For an affiliate store.

Here you will need to sign up for an affiliate program of your choice. It can be amazon associates or aliexpress affiliate program, these are the two biggest ones.

And find web hosting service to create your website. Like bluehost, because it is better done with a wordpress website.

With tools like aliengine store builder, you will be able to connect your store with aliexpress. So, that you can import products from aliexpress to your store, the product will have your affiliate id and will link directly to aliexpress. Your clients will finish their orders on aliexpress.

We also have the same kind of plugins for amazon affiliate store, like amazon store builder. Which, allows you to realize the same results.

 

Marketing your store.

For both models, the marketing strategy can be the same. Because, contrary to a simple affiliate program. An affiliate store is more likely to create social media ads, be part of google merchant and use all the online advertising system. Because, the link used will not be an affiliate link but a normal URL.

Many social media marketing platforms will not allow you to advertise and lead people to an affiliate link. But they will be ready to accept a URL without any issue. This is the biggest advantage of creating an affiliate store instead of using affiliate links directly.

So for a dropshipping store and an affiliate store, you can create an ad campaign on social media. You can submit your website for Google merchant or google adwords. You can create videos or use videos from your supplier to advertise your products.

 

Profit.

In these two business models, there is a profit for sure. But depending on which one you choose to pursue, you can earn more or less. Because, one has a fixed commission rate and the other the margin profit depends on you.

For a dropshipping store.

Here you are likely to earn more money. For something sold at 2$, you can charge as much as 8$ for it. You are the only one who can decide on the price. But competition sometimes leads us to use the same price as anyone else in our niche.

So, the difference between the supplier price and your price is what you get as profit.

For an affiliate store.

Here, what you do is that you take the product with the price as it is. You can not add any extra money on the price of the product. You are paid based on a fixed commission already agreed on. There is no way to improve your sales revenue.

 

Pros of these e-commerce models

For a dropshipping store

For an affiliate store

– It is easy and cheap to start. You just need to know your way around a computer. No specific skills are required. You can start it with as low as 50$. For your domain and the usage of the platform.

– You can start with zero inventory of your own. The only start-up capital you need is for advertising. Which means you can test many products until you find the one which sells better.

– Very easy to start and create your store. Instructions are clear for anyone to apply. You can start with 30 to 100$. To pay the store builder tool and your web hosting.

– No need for an inventory, just your marketing budget.

– You can make extra revenue from your audience by placing ads on your website.

– All marketing is done online. Which means you get all the relevant data to create a successful ad campaign.

– You have a low fulfillment cost. Because, your supplier is the one taking care of it, all you need to do is track the fulfillment until delivery.

– Customer retention is very high because your customers know your brand and not your supplier’s brand.

– You earn bigger profits

– You can do your marketing online without any problem. Because, your affiliate links are on your website and you use your website URL to advertise online.

– You do not have a fulfillment cost, Once the order is in, all you have to do is wait. Because, everything is taken care of by the supplier.

– You do not handle client’s money as they pay directly to your affiliate company.

Cons of these 2 business models

For a dropshipping store

For an affiliate store

– The fact that you do not have control over the fulfillment process means also that you do not know exactly when your client will be delivered. And the client will bring complaints to you but you can not really make an improvement on it. So, the best thing will be to talk to your supplier or change the supplier.

– And that will affect your customer service quality. If you can not reply positively to your client and prove it. Your clients will be disappointed and may not come back.

– You have no control over the inventory. A product can be available today and not tomorrow. So, you need to check constantly, so that you do not continue advertising an out of stock product.

– You also lose money if your winning product is out of stock.

– There is no customer service. The client has to contact your affiliate company directly in case of any problem.

– Because, you do not have your own stock. You can face a shortage of your best-selling products and lose a lot of money.

– The profit is not really huge. That is why you need to choose the right products. And choose a product which value is hard to tell and you will be able to charge more for it.

– You handle the client’s money because the payment is done in your store.

– Your store is just like a bridge, clients will not know much about your store. And there is a danger that next time they will need a product, they will go back to your affiliate company. And not to your store.

– Customer retention is very difficult.

– Which will lead you to constantly creating ads campaign instead of enjoying repeating clients to your store.

– It is very hard to establish your brand.

 

Conclusion of dropshipping store vs affiliate store.

So, for the two e-commerce models, we have seen today, both can be profitable and they come with some part of the responsibility for the owner. So, after comparing the dropshipping store vs the affiliate store helped us determine that an affiliate store has less responsibility, all you need to do is to set it up with your chosen products and market your store to make sales and earn a commission. Nothing else is needed.

But for a dropshipping store, you establish it as your brand. So, in case of any issue customers will come to you with a complaint and you need to be able to address them. And because of all of that the revenue is somehow more than the revenue of an affiliate store.

So, if you want less responsibility, you can go to an affiliate store. But if you want to establish your brand and make more money, you can opt for a dropshipping store, read our introduction to dropshipping business.

Thanks for reading, feel free to leave a comment below.

14 thoughts on “Dropshipping store vs affiliate store”

  1. Thank you for explaining details about the dropshipping store and affiliate store. After reading the whole article I got to know some basic differences between these two stores. Both are profitable. In the case of the dropshipping store, the store would be my brand so I need to establish it by myself.  On the other hand in the case of an affiliate store, there would be less responsive as we just have to promote already chosen product to sale and we get a commission. And I dropshipping store. 

    Reply
  2. Makes sense. A dropshipping store requires arguably more work and can thus give you more profit, especially since you don’t have to worry about your commissions being too low, as is often the case when having an affiliate store.
    One advantage having an affiliate store does have over a dropshipping store is that since having a dropshipping store is more about the brand, in affiliate stores you are arguably less limited in the content you can sell. You can sign up more easily for many different affiliate programs and incorporate them in different ways, even if they aren’t all in the same niche.

    Reply
    • With an affiliate store, you have that possibility to go broad and sell many different product. You can create a mall of your own and that can be quite profitable too. You can create something in the likes of amazon where everything is available. 

      Reply
  3. I have been thinking about looking into to some kind of online store as oppose to a website with affiliate links. I have heard about dropshipping but haven’t really looked to much into it, until recently. Your article has given me ‘food for thought. I will have to research more and I have bookmarked your site as I see there is more information available. I also had a look at your article on Dropshipping for Dummies’ and you give some good insight into the whole process. Initially I think using the affiliate marketing method will suffice as there seems to be less hassle, although if I want to make higher profit margins I will have to seriously consider the alternatives. Thanks, I’m glad I found you.

    Reply
    • Thank you dear and I wish you success in whatever choice you make.

      Reply
  4. I looked into drop shipping a couple of years ago, around the same time as I got started in affiliate marketing. There are key differences between the two which you highlight well. My personal preference is for affiliate marketing and I’d certainly recommend that route for a newcomer to the World of e-commerce.

    Reply
  5. I read your post because I was confused by the difference between a dropship store and an affiliate store.  I’ve considered opening one, but have not thus far. The one thing that bothers me…if a customer orders from your store, how fast will the item ship from its source?  Do you have much trouble with lost or delayed orders?  It seems to me that it might be a bit harder to keep up with a dropshipping store, than with an affiliate one.  What do you think?

    Still, it might be fun to try.  I’ve considered opening a store in Shopify, as I rather like their site.  Will think about it some more. 

    Reply
    • Delivery time is one of the headaches of dropshipping. You can avoid that by choosing the best suppliers, the one with less shipping time but they are usually more expensive which will ultimately reduce your profit. As I said an affiliate store is less responsability and less profit, you can choose what suits you best.

      I personally do not want to waork with shopify, because, you do not have the control of your store. I have seen them closing people’s stores for no reason. I prefer to use Alidropship products review. You keep the ownership of your store and with wordpress and woocommerce you can do much more.

      Reply
  6. Thank you so much for this informative article. Based on your opinion which do you think is better for a new marketer? To me it seems that dropshipping requires more expertise. Maybe affiliate marketing would be better suited for the less experienced. However, both require a leaning curve which wiil take time, patients and experimentation. 

    Reply
  7. Hey Davina,

    I must confess that I have watched many videos on both Dropshipping online business as well as Affiliate Marketing. In one single post, you have managed to outclass the videos I watched and what I read about Dropshipping and Affiliate marketing. I did not have interest in considering Dropshipping as a good online business, but you have definitely come out clearly to simplify more advantages of Dropshipping than the disadvantages to the extent that a newbie like me is now inspired to venture into it. Of course, you get more money as a Dropshipper because of responsibility and more time to be spent on this business. However, you have simplified things for many of us who had little or no interest in Dropshipping. thank you very much for sharing this important info.

    Joseph

    Reply
    • You are most welcome.

      Dropshipping is very demanding, in time and money, before jumping into it you really need to have enough money for the software and the ads. Because, you can’t tell when you will be able to make a sale or to break even. But all in all it is a very good business model that anyone can do from anywhere in the world.

      Reply

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