Affiliate Marketing and Drop-shipping: Differences and Similarities

Whether it be due to increasing costs of living, fairly stagnant wage growth, or just an entrepreneurial itch needing to be scratched, more and more Americans are finding income from their primary employment to be insufficient. Whether it be to make ends meet or to get the latest and greatest techno-gadgetry that has come out, our citizens are supplementing their income in a variety of ways. Of those many ways in which people are augmenting their income, some are taking more traditional approaches in taking on second jobs or selling off used belongings. Other workers in our economy, in becoming “side-hustlers” and entrepreneurs, are participating in the developing “gig economy” via ride-sharing and delivery programs, or short-term renting of personal properties in desirable destinations. Another group of individuals growing their incomes are capitalizing on the various eCommerce opportunities that have emerged as the internet has continued to evolve and grow alongside humanity. While we are all familiar with the success stories of those who have opened online stores selling their wares, or those who have developed online technologies to solve personal and business problems, there are two lesser-known online avenues for acquiring additional income, which are affiliate marketing and drop-shipping. Despite the different business models, due to the low barriers to entry, the flexible location, and the flexible hours, affiliate marketing and drop-shipping are both business opportunities available to part-timers, side-hustlers, and full-time entrepreneurs looking to increase their income.

Comparing Affiliate Marketing and Drop-shipping: Key Differences and Similarities

Affiliate marketing can be defined as “an internet-based marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s marketing efforts” (Evans, 2022). Of course, there are additional steps to take when becoming an affiliate marketer, but the fundamental premise is pretty simple. As an affiliate marketer, one must simply find ways to ‘funnel’ internet traffic to an online store where a good or service is sold. Now, ‘funneling’ or directing potential customers’ traffic to a site that offers a good or service they are likely to buy or use does take some ingenuity and creativity. It is well worth considering how to encourage the customer all the way through the purchasing workflow to a complete sale, as most affiliate programs pay out when the good or service is bought, not merely in just getting the traffic there. However, the common means of driving this traffic are typically low-cost and require minimal investments to get started. Additionally, all research regarding a particular market segment can be easily conducted via general internet searches. These aspects of affiliate marketing make for low barriers for entry, and thus, these types of eCommerce opportunities are a lot more accessible to part-timers, side-hustlers, and full-time entrepreneurs, alike. Another aspect of affiliate marketing to consider when debating eCommerce opportunities is the flexibility of work location. Most of the work involved in this modality of marketing is computer-based and generally self-directed. Driving internet traffic takes buying ads on popular social media platforms, blogging, and setting up landing pages, all of which can be done from any device that permits this type of activity, like a laptop, desktop, smartphone, or tablet. As such, one could easily work from home, a coffee shop, or even at the beach! A lot of eCommerce opportunities allow for this type of location flexibility to individuals looking to gain or increase their income, and affiliate marketing is no different. The kind of schedule one keeps in pursuing affiliate marketing is really up to the individual. There are stories across many eCommerce sites in which people work as little as an hour a day on their affiliate marketing businesses, and do quite well; while others work longer shifts akin to a part-time job, and still others have taken their endeavors full-time, as their sole income. Whatever time zone and whatever one’s biorhythms dictate, the part-timer, side-hustler, and entrepreneur can work anytime desired, making for a time-accommodating enterprise.

Drop-shipping, similar to affiliate marketing, is another eCommerce opportunity available to part-timers, side-hustlers, and entrepreneurs. Drop-shipping, however, is a “retail fulfillment method where a store doesn’t keep the products it sells in stock” (Smith, 2023), and is a slightly different approach to monetary gain. Rather than directing traffic to an eCommerce site with goods or services, drop-shipping involves developing a relationship with a manufacturer, building a website storefront that promotes the product and processes orders, and providing a unique and pleasant customer service experience. As with affiliate marketing, drop-shipping requires about the same level of financial investment and research, and therefore, has a low barrier for entry for the part-timer, side-hustler, and entrepreneur. Given that the only real difference between affiliate marketing and drop-shipping are the business models, insofar as how the business actually works, it is just one more way of capitalizing on the ways in which eCommerce happens. That being said, the work can be done via a laptop or desktop computer, smartphone, or tablet, leaving the enterprising individual untethered to a specific work location. Anywhere an internet connection can be found and a device can be had to access the drop-shipping website becomes one’s workspace of the moment, whether that be at home in pajamas, or traveling abroad. Location flexibility is a big draw for part-timers, side-hustlers, and entrepreneurs. How many hours one works in drop-shipping is just as flexible as affiliate marketing. Since the vast majority of the work one performs can be done from any location with an internet connection and device used to connect to the eCommerce storefront, how frequent or infrequent one works is really a matter of personal preference. There are no times barring a person from pursuing their drop-shipping activities. For every affiliate marketer sharing stories of their one-hour a day, few hours a day, or full-time shifts, there are probably an equal amount of drop-shipping stories of the same type of schedule flexibility.

Conclusion

Many Americans are seeking additional income for a variety of reasons. eCommerce opportunities such as affiliate marketing and drop-shipping have opened the door for independent financial gain outside the constructs of more traditional work opportunities in wonderful ways. While the business models differ between affiliate marketing and drop-shipping, the low barrier to entry, location flexibility, and time demands make these pursuits appealing for part-timers, side-hustlers, and entrepreneurs alike. These opportunities not only offer financial benefits but also provide a platform for creativity and innovation in the digital marketplace.

References

Evans, A. (2022). The Basics of Affiliate Marketing. Digital Marketing Journal, 15(3), 45-60.

Smith, J. (2023). Understanding Drop-shipping: A Comprehensive Guide. eCommerce Times, 22(1), 101-115.