Both affiliate marketing and dropshipping are lucrative business models with a fairly low entry barrier. There’s money to be made there: the global affiliate marketing industry is expected to grow to over $30 billion by 2030, while the global dropshipping market is projected to exceed $1.2 trillion by the same year.
However, it may be just a bit too challenging to do both affiliate marketing and dropshipping at the same time, especially if you have limited resources. Sometimes, you have to choose one before you’ve grown to expand to another.
Now, the question is, what fits you in the first place, affiliate marketing or dropshipping?
Read on to find out.
What is Affiliate Marketing?
With affiliate marketing, the core idea is quite simple: an affiliate (a person or company) earns a commission for promoting a third-party product or service. As an affiliate, you are usually required to drive sales or leads to get your commission.
| Advantages | Disadvantages |
| Minimum to no initial investments | Reliance on the affiliate program’s guidelines and limitations |
| No need to have a warehouse or manage orders | Fierce competition, especially in high-ticket niches |
| It takes months to years to build a steady stream of income | You need to constantly generate commercial value to receive payouts |
What is Dropshipping?
Dropshipping is a business model where you sell products without keeping them in stock. When a customer places an order, it’s simply passed to a supplier who delivers the product directly to the client, while you earn a difference between the supplier’s and your final retail price.
In general, dropshipping is a bit riskier than affiliate marketing because of your reliance on the supplier. So you need to vet your suppliers, set clear agreements, and have a solid customer service plan to handle potential issues.
| Advantages | Disadvantages |
| Lucrative for products with a high margin | Intense competition across niches |
| Full control over your brand | Dependence on suppliers |
| No limitations on the advertiser’s side | More challenging to scale |
Affiliate Marketing vs. Dropshipping: 3 Key Distinctions
Ease of Start
Dropshipping is generally more demanding. While both dropshippers and affiliate marketers have to invest in website creation, content marketing, advertising, and continuous testing, the former also have to deal with suppliers, order processing, product quality, and customer support.
On the other hand, affiliates may receive promotional materials and assistance from their advertisers and affiliate networks, which simplifies the process for them. But then again, both business models are still built around marketing, so you must know who you are targeting, what they want, and how to convert them into customers.
Initial Investment
Affiliates typically allocate resources in several key areas:
| Key Requirement | What should you do? | Cost |
| Domain and hosting | An affiliate website and landing pages usually require a custom domain and reliable hosting to ensure fast load time and fine SEO performance. | $100 per year for an affordable domain and hosting |
| Website or landing page software | WordPress, ClickFunnels, or other builders often require subscriptions and additional licenses. | $100 per year for affordable website software |
| Tracking & analytics tools | Track every aspect of your affiliate campaign to identify bottlenecks and optimize conversion rates. | Starting at $500 per year for simpler software |
| Content creation | You need to showcase yourself as the expert, so users know that you are worthy of trust, and they benefit from taking a targeted action. | Starting at $1,000 monthly if you outsource content creation |
| Email marketing and automation | It’s crucial for many affiliates since it helps them to segment audiences and build converting sales funnels. | Depending on the tool and its features, automation services may start at around $30 per month. |
As for dropshippers, they may also need an e-commerce platform (which may cost $1000+ per year, depending on the plan), a basic web app, and customer support. Combined, they may add a few thousand in yearly costs.
Likewise, to minimize reputational risks, dropshippers often purchase product samples in advance to evaluate quality. Depending on the niche, such tests may cost you hundreds to thousands of dollars.
Earning Potential
Affiliate marketing is typically more stable, as your earnings mostly depend on your traffic, niche, and commission rates. If you want higher payouts from the start, it’s worth exploring high-ticket niches like insurance or solar with networks such as Profitise, EnergySage, or ShareASale.
Don’t expect big money right away, though. In most cases, novices see little to no income during the first months. Over the years, though, you can build your business to earn up to $10,000 per month and even more.
Theoretically, dropshipping can make you even more money, but it’s also riskier. While most beginners struggle to stay profitable during the first few months due to advertising and failed product tests, those who manage to find a “winning product” and scale it with paid ads may reach a monthly profit of $5,000–$7,000 within a few years.
Once you build a team, invest in branding, and optimize logistics, you can push past $20,000 monthly. But that’s already closer to a full-scale e-commerce company than a dropshipping one.
Affiliate Marketing vs. Dropshipping: 5 Questions To Ask Yourself
Now that you’re familiar with the gist of the affiliate marketing vs. dropshipping dispute, you might be ready to ask yourself a few final questions before you can tip the scales in favor of one or another.
How Much Time Do You Have?
Affiliate marketing can technically be done part-time, and many start it as a side hustle. However, if your goal is to generate a consistent four-figure income, it quickly becomes a full-time commitment.
Meanwhile, dropshipping requires constant attention to your store, suppliers, and digital campaigns. It’s necessary to find someone who can manage the store on a daily basis. If you aren’t ready to make it a full-time job, find someone who can manage the store while you’re out.
When considering affiliate marketing versus dropshipping, factor in the time you can realistically dedicate. If you have just a few free hours, it’s better to start with the first option, as initially, you don’t even need to manage your small online business that often.
What Is Your Budget?
Affiliates can start with no upfront investment, depending on the chosen traffic channels and niche. If you take care of content, targeting, and other critical tasks independently, you avoid spending extra money.
As a dropshipper, you may need at least $8,000 – $10,000 to set up an online store and run paid ads. If you choose to use only organic traffic, it may take months before the first purchase.
What Is Your Expertise?
In affiliate marketing, you need to establish yourself as an expert and be able to convince users to take action. In fact, you’re an all-in-one marketer who develops a strategy, creates an affiliate website, designs landing pages, writes copy, and does all other things that are crucial for successful digital marketing.
In dropshipping, you need all of that, plus you need to create and manage an online store, including complaints, logistics, product quality issues, returns, and more.
How Fast Do You Need Results?
In affiliate marketing, your earnings grow gradually, but typically steadily. With consistent effort, it’s possible to generate a passive five-figure income over time. You most likely won’t achieve success overnight, but in most cases, your efforts will pay off. This is especially true for high-ticket niches such as insurance or solar.
Meanwhile, dropshipping has potential for faster returns, but your earnings can be unstable. It has higher stress levels due to customer service demands, advertising pressure, and high competition in almost any niche.
What Is Likely a Better Choice in the Long Run?
Think about your goals from a long-term perspective. Affiliate marketing offers you slow growth, but it’s far more predictable, especially if you have evergreen content or a loyal audience. In dropshipping, you can quickly generate first profits, but your long-term revenue heavily depends on ads and supplier reliability.
Convert Your Leads into Profits with Profitise
Profitise is a high-ticket insurance and solar affiliate network that pays one of the highest prices for web and call leads and provides customizable JavaScript forms that qualify leads on the fly.
Here’s what you get with Profitise:
- Easy-to-embed JavaScript forms to generate quality traffic
- One of the highest per-lead rates in the insurance and solar industries
- The ability to sell your leads instantly
- Support from an affiliate manager
Sell insurance and solar leads with Profitise as an affiliate.
Frequently Asked Questions
What is the difference between affiliate marketing and dropshipping?
An affiliate earns commissions by promoting products or services of other businesses, while a dropshipper sells these products by, in fact, re-routing orders to the supplier, although on the customer’s side, it feels like they’re buying from the dropshipper.
The biggest advantage of dropshipping is that you don’t need your own store. Instead, you can sell products to customers while having a business agreement with the supplier.
Affiliate marketing vs. dropshipping: what’s better in the long run?
Affiliate marketing may take months to see the first results. Dropshipping can yield higher profits, but it entails more risk, ongoing management, and income volatility.
What is more profitable, dropshipping or affiliate marketing?
Dropshipping can generate higher short-term profits if you find a “winning product” and scale it with ads. Meanwhile, you need to invest more while still dealing with operational stress and income volatility. Affiliate marketing usually grows steadily, with lower risks and expenses. It typically offers a more reliable long-term income.
