Dropshipping vs affiliate marketing is a heated discussion at affiliate forums. Deciding which one is more profitable is not that easy from the first sight. 

Let’s first take a look at characteristics that affiliate marketing and dropshipping have in common:

• Own responsibility for product promotion;
• No responsibility for holding inventory or shipping;
• Endless income opportunities at both business models;
• Rather fast set-up and launch of the business;
• Comparably low-risk business models;
• No need for large-scale investment.

Though they bear many similarities, affiliate marketing and dropshipping are still strikingly different.

1. How it Works

Dropshipping means you will have a supplier manufacture products and ship them directly to the end customers. Your only job is to handle the orders and make a profit.

If you choose affiliate marketing, you receive commission from being the intermediary. To make a profit, you refer a customer to a brand and once they are done with a deal, part of the revenue will go to you.

2. Business Model

In dropshipping, your total amount of profit is the money earned from sold products minus the price you need to pay the supplier for production, packaging and delivery.

In affiliate marketing, your income is the percentage of the profit from successful orders. For most of the time your paycheck will be given out on a monthly basis.

3. Business Management

In dropshipping, you don’t have to entirely manage the inventory when selling your products. After a consumer makes a purchase, you pay the manufacturer to complete that order.

In affiliate marketing, you will promote the merchant’s products and receive an affiliate link which will be directed to that person’s website. For each click from a potential customer, you will receive a small revenue.

4. Ease of Use

In dropshipping, you are responsible for customer support while in affiliate, you are not responsible for handling anything related to the store.

5. Recurrence

In dropshipping, you get repeated business and recurring orders from customers while an affiliate purchase is just a one-off transaction.

6. Control

You are able to choose the dropshipping offers as you wish while the available affiliate offers are more limited.

7. Future Prospect

As a dropshipping store owner, you will have a better chance of establishing your business in the industry with a strong foundation. On the other hand, working as an affiliator means you are dependent on your partner’s business.