 Dropshipping versus Affiliate Marketing, which one is easier to start, which one's more profitable, what are the key differences, and most importantly, which one should you start? Those questions and a lot more will be answered in today's video. This is interesting. Now, everything that I'm going to be mentioning in today's video is coming from personal experience. Yes, I've had personal experience. Along with a little bit of extra research, I personally have made money in both affiliate marketing as well as dropshipping. I like both business models. I think they're both absolutely fantastic. But with that being said, I know that each one of these models is not necessarily for everyone. Some people are going to prefer affiliate marketing. Some people are going to prefer dropshipping. So with that, let's go ahead and get started, shall we? But right before we do get started, I do want to let you all know that if you check out the description down below, there's going to be a link to a relevant article down there. All of the different talking points that I'm going to be making throughout this video, you can find there. You can learn a little bit more about dropshipping versus affiliate marketing. So if you want a little bit of extra information on both business models, again, just check out the description down below. So let's go ahead and get started with affiliate marketing. What exactly is affiliate marketing? Well, I'm pretty sure that you have all heard of this business model and most of you have probably bought into it without even knowing that you have done so. Let me explain. So when it comes to affiliate marketing, the whole point of this is to promote certain products via links. So you're going to have your own personal links for a particular product or from a particular brand and you're going to go ahead and promote those links. Whenever somebody clicks on that link, that action is going to be recorded. And if they make a purchase, then you're going to get a commission from that sale. Now, the commission will vary from item to item or from company to company. It's really all dependent on the company that you're affiliated with. Now, as you can see, it's fairly simple. Share a few links, get a couple clicks, get a couple sales, make some money. Easy, right? Well, yes, but not entirely. While affiliate marketing is fairly easy to start, it is definitely something that you're going to have to build up to. So don't get into this business thinking that you're going to start making hundreds of dollars right away. This all takes time. Now, just like with any other business, affiliate marketing comes with both its pros and its cons. So let's go over a little bit of both. So to start, affiliate marketing is essentially a form of passive income. Whenever you start promoting your different links, there's a few different ways that you can go about this. For one, you can start posting them on Facebook groups whenever somebody asks a relevant question. And that's very important. If you're posting your links on Facebook groups, only post when it's relevant. You're not going to be posting your links to, I don't know, a cheese grater. If somebody's asking about a particular TV show or something like that, what's going to end up happening is you're going to get blocked. So let's say, for example, somebody in a Facebook group asks, where can I buy a particular type of hairbrush? And you're affiliated with a company that sells that particular hairbrush. Well, in that case, it's perfectly acceptable to send them your link or comment your link on their post. This also gives you a way higher chance of actually having somebody click on the link and making a purchase. If the post is not relevant at all to what you're recommending, then like I said, most likely what's going to end up happening is you're going to end up getting blocked from the group or blocked from the person. And honestly, nobody's going to click on your link if it's not relevant. Nobody's going to want to click on it because they don't need it. But I digress. Aside from that, you're also able to start up a blog. So you can start a blog that talks about, let's say, a certain problem and it can link to a particular product or a particular company that you're affiliated with. That can help with that particular problem. Aside from that, you can also create content in the form of videos. So you can create TikTok videos, Instagram reels, or even YouTube videos to promote certain products or certain services. A lot of the times another thing that is also very popular when it comes to affiliate marketing is going to be courses. So there's going to be a lot of people or a lot of gurus that offer courses. Now, in order to get more people to sign up for those courses, more than likely, most of these places are also going to have affiliate links. So they're going to be looking for people to promote their courses. Now, one thing that I have noticed is that when it comes to commissions and payouts, courses have some of the higher payouts courses. A lot of the times can start anywhere between 50 to even $500 in commission. Of course, I really recommend on the course that you're pushing, but there's a lot of money in courses. Now, aside from that, another pro is the fact that it's extremely low risk if there's any risk at all. Honestly, when it comes to affiliate marketing, again, all you're doing is promoting your links. You're not spending any money. So you're not putting up any upfront investment. You're not spending any money except whatever you're spending to maybe run a blog, maybe run your website, or even just order the products so you can make videos or content based around those products. So because of that, that also means that there's really no risk either. So it's low startup and it's low risk. Another thing that I really like about it is the fact that you don't have to deal with customers. Think about it, you're only promoting a product. If there's any issues with that product, yeah, sometimes they might come to you and ask you a question about it, in which case it's perfectly fine to answer the question if you're able to. But if it's too technical or if there's an actual problem with the product, you can't do anything about it. So what's going to happen is they're going to have to go to the supplier, to the manufacturer, to the company that they purchased it from, and they're going to deal with it. Now with those things in mind, you can really tell why so many people want to get started in the affiliate marketing space. But because of that, that also means that there's a high level of competition. There's a lot of links out there in the internet that people are trying to promote. So like I said, when it comes to starting up with affiliate marketing, it's super easy. The easiest way to do this is simply go to a website like share sale, sign up and start applying to become an affiliate with different companies. Another option is also click bank. But personally, I prefer share sale. So because of that, because of it's such low barrier to entry, there is a lot of competition. But that doesn't mean that you can't succeed. Just like any other business, there's always going to be some sort of oversaturation. It's really up to you to be able to stand out and be noticed. You need to be unique with your content. You need to be unique with the way that you promote your links. Another thing that can really help you out is if you already have an existing audience. So let's say you're pretty big on TikTok or not even big. Let's say you have maybe five to 10,000 followers on TikTok and you talk about certain topics. When you're talking about those certain topics, you can start talking about certain products that can help out whatever situation you're in or that can provide some sort of value to your viewers, something that's relevant. Of course, it doesn't always have to be the same exact product. You can vary your products the same way that you vary your videos or your content. Now another thing that you need to think about and you need to watch out for and just always have in the back of your mind is the fact that when it comes to affiliate marketing, you're going to be paid based off of commission and commission payments aren't necessarily always the highest. It really all depends on how much your customers are purchasing and how frequently. So of course, the more clicks you get, the more purchases and the bigger the purchases, the more money you're going to get. But that's not always guaranteed. Let's say one video goes viral and 200 people click on your link and you start getting some pretty good sales. The next five or six videos might not go viral and you might not get any sales or you might get one or two sales. It's really always going to vary and it's always going to take a lot of time and a lot of patience. And honestly, I think that is the most important thing that you need to keep in mind. Stay patient, stay dedicated. You must be patient. These are the two most important things that you need to follow pretty much with any online business. Online businesses are going to tend to be over saturated no matter what it is. So just stay consistent, stay patient, you'll get to where you want to be one step at a time. Now before we continue any further, I want to hear what your thoughts are on both affiliate marketing and dropshipping. Let me know down in the comments below. Let me know which one you prefer. Have you tried one? Have you tried the other? Have you found success in any of the two different business models? Let me know down in the comments below. I'm really excited and curious to hear what your thoughts are on this. Now, what about dropshipping? What exactly is dropshipping? Well, simply put dropshipping is a fulfillment business model. What ends up happening is you start up a store, whether that be on a marketplace such as eBay or Etsy, or you start up your own store on Shopify. You create your own website. Either way, you set up shop and you start uploading different products. It can either be different products, it can be products within a particular niche or it can be a single product. However, you choose to do this. Now, when somebody comes to your store and makes a purchase, then it's up to you to place that order with your supplier and have them send it directly to your customer. So you're never touching any inventory. You're never purchasing any inventory. You're never holding any inventory. The entire thing is online. And one major benefit to dropshipping is the fact that you can automate the entire thing, which ultimately ends up giving you passive income as well. Once you automate your dropshipping store, it really gives you enough time back to be able to focus more on that store and keep reinvesting your time into your product research, into bringing in new and exciting products, or to just simply market your store more. Now, if you pros to dropshipping for one is going to be that it has a low startup cost. So you can literally start with $0. Although starting with such a low budget really will take you a lot longer to scale than if you were to start off with, let's say, a thousand or even $500. Having a higher budget can really help you start to market your products more so it can help you get in front of the eyes of more people. So you can see why starting with such a low budget will take you longer to scale because it's going to take you longer to reach your audience. But again, that doesn't mean it's not possible. Another thing is you don't have to hold any inventory that alone can save you a lot of money in storage fees. Storage fees can come in the form of renting out a space, renting out a warehouse, or even simply just using a room wherever you're staying to hold your inventory. It takes up space. Inventory takes up space. And imagine if you have multiple products, it's really going to start taking up a lot of space because when you order inventory, you're not only going to have 10 or 20 products, you're potentially going to have hundreds. Dropshipping is also really low risk. The only thing you really have to lose is whatever budget you set. Aside from that, of course, the time that you spend, but really the drop shipping business model is low risk, high reward. Dropshipping is also something that's extremely easy to scale. Again, especially if you implement automation, you really do get a lot of time back to be able to reinvest into your store. Now one thing that I really like about dropshipping that affiliate marketing does not offer is immediate payouts. Well, not necessarily immediate, but definitely a lot faster payouts. When it comes to affiliate marketing, a lot of the times the company that you're working with might need to verify the purchase and they're not going to pay you your commission until the return window is closed. So they don't want to pay you commission, have the item returned, and then just have you keep the commission, you know, when it comes to dropshipping, it's completely different. Depending on the platform that you're using, it can take anywhere between one day to maybe a week Shopify, for example, is probably one of the quicker ways to get paid. For the most part, if you have a good standing account, you can get paid from one day to the other other payment processors such as PayPal could potentially give you holds at the beginning. But once you start to build history, then payouts are going to be again either immediate or from one day to the other. Now, just like with affiliate marketing, there is a very low entry barrier to dropshipping. So that means that pretty much anybody can get started in the business. And again, because of how easy it is to get into it, there is going to be a lot of competition. But once again, that doesn't mean you can't succeed, you need to be creative with your marketing. Aside from that, you need to make sure that you're sourcing high quality products, products that are in demand, products that provide some sort of value to your customers and products that have a wow factor. This all contributes to attracting our target demographic, which is impulse buyers and impulse buyer is going to make a purchase on impulse. They're going to see something they like if it has a wow factor. If it makes them say, whoa, this is pretty cool. And if it makes them think I could really use this for whatever it may be, then an impulse buyer is going to make that purchase immediately. And those are the types of buyers that we're looking for. So because of that, you need to be unique and you need to stand out with your marketing. Now since we are dropshipping and we're not holding any inventory, we need to rely on our suppliers to have the appropriate amounts of inventory. A lot of the times our suppliers might run out, in which case we could potentially lose out on sale. But in order to remedy that, one of the best things that you can do is simply have multiple suppliers for the same product. So that way if one supplier raises their price, or they just simply run out of stock, then you can go to your other supplier and purchase with them and you won't have to lose a customer or an order. Now because we're not touching inventory, another thing that can happen is we might have bad quality products. But it's pretty easy to get around this. For one, you can either order a sample yourself and check it out. Or two, the cheaper way of doing it is simply checking out the reviews. Look at all of the different reviews for the seller and look at the different reviews for the item itself. If you see that it has the majority of positive reviews, then go ahead. Then you can feel safe offering this product or using the supplier. But one thing that you do need to watch out for when it comes to reading different reviews is if they're too generic, be weary. If you see somebody saying my cousin loves this product or I loved it, it's great. You know, really basic dry comments that don't necessarily show that this particular person made the purchase could potentially be fake. It doesn't always happen, but it does happen from time to time. Some sellers are known, especially newer sellers, are known to either buy or manufacture reviews. So what you want to look out for is specific reviews to the product reviews that mentioned the product or service and even better. Look out for reviews with pictures. Now the ultimate question, which one is better, drop shipping or affiliate marketing? Which one do you think is better? Like I said earlier, me personally, I've done both. I like doing both and I'll continue to do both. But at the end of the day, it's really going to be up to whichever business model feels right for you. Some people might prefer drop shipping. Some people might prefer affiliate marketing. Some people might be better at making content. Some people might be better at marketing a product. It's really all going to depend on your personal preferences and what you're good at. If you're good at marketing a product, then you can definitely market your own drop shipping store or your own drop shipping products. If you're really good at making content, then you can go with affiliate marketing. But at the end of the day, the skills that you use for one can be mixed and matched with the other. Now some similarities between the two are going to be for one, the fact that they're both pretty low effort and they're both low cost. They're also both low risk businesses and they're ultimately really easy to start. Now, as far as key differences, of course, there's a few more than there are similarities. But for the most part, one of the main things is going to be your profit margins. Drop shipping can tend to have higher profit margins than affiliate marketing, although this can really vary wildly depending on the product that you're offering or the product that you're promoting via affiliate links. Honestly, when it comes to profits, they can be all over the place when it comes to drop shipping and the same goals for affiliate marketing. But while you make a thousand dollars on one, you can make $50 on the other and vice versa. Another thing is the generated traffic. So when you're doing affiliate marketing, you're generating traffic for a different website while when you're doing drop shipping, you're generating traffic for your own website. Either way, you can still make money because if you bring people to your own drop shipping store, then people can purchase multiple items. Now, if you generate traffic to somebody else's store for affiliate marketing, then the same goes in that sense. The viewers or the people that you're sending to that particular store can purchase multiple items, therefore increasing your commission. Customer service is also a huge key difference, simply because when it comes to drop shipping, you're going to be the one that's providing your customer service. When it comes to affiliate marketing, the company that you're promoting are going to be the ones providing customer service. And last but not least, automation. When it comes to drop shipping, you can automate your entire store and have the entire process done automatically. So using a service such as auto DS, you can automate everything from your product importing. So that way you don't have to input anything manually to your store, you can simply just automatically import whatever products you want all the way to your order fulfillment. So that way whenever an order is placed, it is automatically rerouted to your supplier and you can even automate your customer service. The easiest way to do this would be simply to go on a website like Fiverr, hire a virtual assistant, which honestly, virtual assistants can be hired for pretty cheap, especially if you're okay with looking for virtual assistants in other countries. But out of DS also gives you the option to add a virtual assistant. And on top of that, they give you access to limit whatever access your virtual assistant has. Now at the end of the day, when it comes to profits, in my opinion, drop shipping has to win simply because you have a bit more options. You can even start your own brand when it comes to drop shipping. And when you start your own brand and you start selling your own branded products, you can generate a lot more income because you can charge more for a branded product. Branded products are going to equal a lot higher profit margins. On top of that, you also have loyal customers. So when you have loyal customers, you're going to have repeat customers, which means you're going to have happy customers that are going to continuously go to your website and keep making purchases. So each time they make a purchase, you keep getting your profits. When it comes to affiliate marketing, that's not necessarily the case. If somebody uses your link, then yes, you are going to get a commission after they make a sale. But these links are not going to last more than two or three days. Sometimes maybe a week, it really depends on the company. So whenever somebody clicks on your link, they're going to have up to a week again, depending on the company to make a purchase. If they make a purchase after that, then you're not getting a commission unless they click on your link again. Now because of that, unless they keep clicking on your link every single time that they go make a purchase, you're probably not going to be getting a commission aside from maybe the first one or two times. At the end of the day, like I said earlier, both affiliate marketing and drop shipping are fantastic business models. But when it comes to profitability, drop shipping is the clear winner because of the specifics that I just mentioned. Now with that being said, I want to know what you think about affiliate marketing and about drop shipping. Let me know down in the comments below, which one's your favorite, which one have you tried in the past? Have you tried doing both? I'm really interested to hear what your thoughts are on this. So let me know down in the comments below. Now with that being said, again, remember, if you want a little bit more information on anything that I talked about in today's video, all you have to do is check out the description down below and click on the link to the relevant article. So if you did find this video helpful, if you found it entertaining, if you enjoyed it, please make sure you smash that like button and hit that subscribe button. Huge thank you term for watching, especially if you made it all the way to the end. It truly means a lot as always. My name is Mario with AutoDS and I'll catch you all next time.