If you are looking forward to going into a traditional business for yourself, there are a variety of different options to choose from. It’s important to remember that part of any business relies upon various payments issued to employees and vendors and even issuing yourself payments so it can be pretty frustrating to keep track of all the paperwork. The good news is you can always use a quick books check system to make it a bit easier on your accountant.
However, if you want to start a business that uses the internet, you may not know where to start. You may have heard the terms affiliate marketing and dropshipping and seen people talking about these business concepts before, but really have no idea what they are.
Affiliate marketing and dropshipping are two of the hottest online businesses, and they are easy to start, but you have to know the differences and how each of them works in order to start.
Today we will help you by giving the breakdown of both.
What Is Affiliate Marketing?
Affiliate marketing is the process of promoting one’s products or services through various means most of which are internet-based. You as a promoter can earn a commission for every sale that is made through your platform, whether it is through your blog, social media profile, or your website.
To get started, you can look for companies or individuals that offer affiliate programs. By applying for such affiliate programs, you become their affiliate and are entitled to a particular compensation scheme.
The most common way to promote products or services is through blogging. What you need to do is to create a blog and embed an affiliate link on it, so that your visitors may choose to click on it to visit the affiliate site.
When a visitor takes an action that ultimately leads to sales, you will earn a commission. Your blog should provide your visitors with useful information, and your affiliate link should help them solve their problem.
What Is Dropshipping?
Dropshipping works like affiliate marketing in the sense that you connect the original source of products to your visitors who will then become their customers. However, with dropshipping, you act like a reseller or an online retailer. You have an online storefront where visitors can purchase items at.
The difference is that you don’t actually possess the inventory of the items you sell the way retailers do. Moreover, you don’t ship the items yourself even if customers purchase on your site. It’s the manufacturer who ships the products directly to whoever has ordered from you.
Your role as a dropshipper is to act as a manufacturer’s merchant. Each manufacturer may have multiple merchants while each merchant may serve multiple manufacturers.
As a dropshipper, you earn from product margins or markup. Some manufacturers offer fixed margins to fix the price of their products while others just let the price be determined by dropshippers. Of course, most dropshippers can’t simply raise the price on their end because other dropshippers offer cheaper prices.
To become a dropshipper, you don’t need a warehouse or logistics system. All you need is a computer with internet connection.
Conclusion
Affiliate marketing and dropshipping are two good ideas for an online business you can start. You can choose the one that best fits your style and capability. Each of them has pros and cons, so it may be difficult to choose unless you take the time to understand them in detail.
If you focus on promoting services, affiliate marketing may be more ideal. On the other hand, if your focus is on promoting products, dropshipping might be a better choice.
