Starting your own business, are you? Way to go, we’re rooting for you! Although, getting the initial capital to actually start anything and keep it afloat can be a pretty daunting task. That’s why, nowadays, plenty of people choose to take out a loan as a way to get started, and a fair number are opting for the personal option, rather than a commercial one.
You can read more about different kinds of loans in this informational article. Here, we’re going to tackle the bigger question: what kind of entrepreneurship endeavor will earn you the money to pay your debt quicker? Most budding entrepreneurs go for either dropshipping or affiliate marketing, so let’s take a look at both.
How does affiliate marketing work?
Simply put, you act as the middleman. You never actually sell anything. Instead, your web pages become a referral gate for a third party. You redirect your visitors to someone else’s business website, and if they make a purchase there, you get some predetermined commission from that.
Moreover, you never have to collect the money yourself. When your affiliate business makes a sale, it’s their responsibility to pay the commission to you (usually monthly, just like a regular salary payment). If you’re wondering how that business knows you were the middleman to begin with, the answer lies in privacy settings.
Whenever a visitor to your website clicks a given link that leads to your affiliate’s business website, that visitor gets a tracking cookie installed onto whatever device they might be browsing from at that moment. Then, if that visitor makes some kind of purchase on your affiliate’s website, you get the credit for that, and you receive some of the earnings from that sale.
What are its upsides?
The affiliate marketing business model has some advantages to it. The biggest one is that there’s very little responsibility on your end. You just refer people, and when they buy stuff, your part is done. No need to hassle yourself with customer support or fulfilling individual orders.
Moreover, since it wouldn’t technically be your store, there would be no need to worry about payment options and declined credit cards. You just put up the relevant contact information, kick back, and let the clicking roll on its way. In a nutshell, you set yourself up to earn decent money with minimal effort. If this sounds appealing to you, try using a smart comparison service like GoBear to find the best personal loan options for starting an affiliate marketing-based business.
How does a dropshipping business work?
Since everything is done online, you never have to stock any inventory in a storage space, nor do you ever actually ship any products yourself. What you do is, you create an online storefront through which to collect your earnings, but you have a third party actually handling the orders. However, you are in charge of the customer support, since the business is done under your brand name.
Whatever order you get, you re-place it at wholesale price, with your distributor who then packs it up and ships it to the customer at the other end. So, your actual profit comes down to the difference between the wholesale price and the price at which you sell. You can check out top dropship courses to further learn how to manage a dropshipping business. Dedicating time to a structured course can strengthen your understanding before diving in.
Why does dropshipping make more money?
That’s saying it bluntly, but it really does. It’s a steadier source of income and 100% of the credit is guaranteed to go to you – no worries about cookie blockers. Unlike the fixed commissions of affiliate marketing, you set your preferred prices, meaning greater profit.
The biggest gain, however, is the word-of-mouth. Affiliates are just doors to someone else’s business. You’re invisible, and unnecessary for repeat purchases – a one-hit wonder. With dropshipping, you get to build a reputable brand and solid customer base.
Bottom line
At the end of the day, if you’re looking to earn more money and repay your loan quicker, go for dropshipping. You get more freedom with price setting, your gross earnings will be greater, and you’ll have way higher chances of scoring repeat purchases, instead of trying to hustle up new people for every click.
