Affiliate marketing and dropshipping are business models for selling products online. In affiliate marketing, you promote other companies' products and earn commissions on sales. With dropshipping, the key is to sell products without the need to stock them, as suppliers handle order fulfillment. In terms of their market size, affiliate marketing, and dropshipping continue to attract marketers. Based on the recent report published by Authority Hacker, the value of the global affiliate marketing industry is worth over $17 billion. The global dropshipping market could reach $301.11 billion in 2024, per Statista's forecast.

As to the role, you focus on driving traffic to your affiliate links through effective marketing as an affiliate. Meanwhile, as a dropshipper, you need strong marketing skills because you need to compete with dropshippers who control product pricing and branding. Both models require finding a profitable niche with in-demand products. 

In addition, earning significant revenue from affiliate marketing and dropshipping could be challenging because of market competition, but it is possible. YouTube content creator Mikey Again recently shared that he profited $130,000 from dropshipping in 2023. Spencer Kelly Mecham, creator of Affiliate Secrets 3.0 and founder of Buildapreneur, grew his affiliate marketing business to 7 figures after over two years. 

Dropshippers usually earn $500 to $10,000 per month. Top performers can make $50,000 or more. Affiliate marketers earn $100 to $10,000 per month. Both business models can earn a lot; actual income varies. It depends on experience, niche, marketing skills, and time invested. Only a small percentage of participants reach the highest income levels. Successful ones can make 5 to 6 figures or more.

Over a decade ago, I did both affiliate marketing and Shopify dropshipping. I was able to earn 6 figures with both. However, those were the golden days. Back then, the market was less saturated, and marketing was cheaper. I gave up both businesses because it started becoming unsustainable. As competition increased, I needed to put in more and more time into my businesses. The constant need to search for new products and optimize marketing campaigns became unsustainable in the long term.

I've done affiliate marketing and Choosing the right model depends on your skills and goals. Do you prefer content creation and audience engagement (affiliate marketing) or managing an online business (dropshipping)? Both offer earning potential, but which aligns better with your aspirations? Let's explore further.

Comparison Between Affiliate Marketing vs Dropshipping

Similarities

What Is Affiliate Marketing?

Affiliate marketing is a digital marketing business model where an affiliate finds a promotional offer and promotes it to customers via content containing an affiliate link. The affiliate marketer will earn a commission for an action by the client. This can either be a click, download, or sale. Statista data shows that 56% of US content creators earn from affiliate marketing. A 2021 survey of affiliates found that 57.55% earned less than $10,000 from affiliate marketing. Meanwhile, 1 out of 6 reported earning $50,000, and almost 4% earned over $150,000.

What Is Dropshipping?

Dropshipping is a retail fulfillment-style business where you take orders without keeping inventory. As a dropshipper, you're the middleman between a customer and a wholesaler or supplier. This business model is popular for its low entry barriers and low startup costs. When a customer orders through your online store, you forward the details to your supplier. They then ship the product directly to the customer. This lets entrepreneurs start an e-commerce business without warehousing or managing inventory. Oberlo, citing Statista, reports the global dropshipping market will hit $476.10 billion in 2026. There is potential to make good profits if you have good strategies.

Now, you need to be a better marketer. The tough competition demands you to show your products' benefits and solve consumer problems. You must show how your product can solve a problem or save them time. Find trending products that sell well before the market saturates.

Is Affiliate Marketing Easy or Hard for Beginners?

Affiliate marketing is hard for beginners. You must generate traffic consistently, and there is plenty of competition. Your only job as an affiliate marketer is to drive traffic to your offers. But because you're not selling your own product or service, you make less profit. You also don't build a consumer base to generate recurring sales. And if your traffic doesn't act on your affiliate link, you don't make any money. 

3 Things That Make Affiliate Marketing Hard for Beginners

Affiliate Marketing Research Criteria Checklist

Is Dropshipping Easier Than Affiliate Marketing?

Dropshipping is not easier than affiliate marketing. Setting up an online store takes longer and requires constant management. Affiliate marketers only promote an offer and do not deal with customers. Dropshippers manage their online store and deal with the customers. You also have to deal with platform policies and fees.

Why 90% Of Dropshippers Fail

Lack of control is the reason 90% of dropshippers fail. Dropshippers don't own or store inventory. In dropshipping, you rely on third-party suppliers to fulfill orders. This setup makes it hard to manage shipping times or fix quality issues, like replacing damaged items.

A reason for the low success rate is that many dropshippers see it as a get-rich-quick scheme. As a result, they choose the wrong niche and fail to research and treat their online store like a real business. Max Robinson of Fish Tank Bank says that 90% of dropshippers fail. The reason is, "they don't try to add value for customers." Dropshipping is about testing many products. So you need to be prepared. You might fail more than once before you find a winning product. 

Dropshipping Checklist for Beginners

Is it too late to start dropshipping in 2024?

It's not too late to start dropshipping in 2024, but you need to find unique products that fill a void in the market. You must also learn the best ways to increase your dropshipping success rate. Use tools like PowerAdSpy or Social Ad Scout to find hot-selling, in-demand items. Find a top store in the niche. Then, use real-time tools like Niche Scaper or ShopInspect to find top competitor ads. Then see where the competition is lacking and do better. It's about controlling the story with your marketing and ads to boost your products' perceived value.

Use customer psychology to find an angle that convinces people to buy your product. So if you don't have the skills, you need to outsource until you're confident in your own abilities. Connect with a dropshipping video ad service. Or hire a copywriter for product descriptions and ad copy. Because if you're not the best in the business, you won't get results. 

Could You Do Both Affiliate Marketing and Dropshipping?

Yes, you can do both affiliate marketing and dropshipping. But it will take longer to learn the business models and succeed. Successful marketers and dropshippers would advise you to focus on one. Hrishikesh Roy, an affiliate marketer and CEO of Roy Digital, says that affiliate marketing and dropshipping need different approaches to sell the same product. Dropshipping is about order fulfillment and customer support. Affiliate marketing is about creating content and building a brand to promote affiliate links. This leads to different required skillset and comes with unique challenges and risks.

That said, you can combine both affiliate marketing and dropshipping into your business. Ivan Golden, founder and CEO of THX News, says it is possible to add affiliate marketing to your dropshipping business. Ivan says you can promote your dropshipping products to your affiliate audience and vice versa.

Affiliate Marketing vs Dropshipping Reddit: Which Would You Recommend for a Beginner?

Reddit has mixed views on affiliate marketing vs. dropshipping. Users are divided on which is better for beginners. Most commenters say that affiliate marketing is better than dropshipping for beginners. One commenter says affiliate marketing is best for beginners as it's easier to scale than dropshipping. He adds that affiliate marketing lets one focus on marketing. Since with affiliate marketing, the vendor handles the customer service.

Another commenter says neither method is best for beginners. Both affiliate marketing and dropshipping are oversaturated. Another thinks your experience decides between affiliate marketing and dropshipping. This same commenter adds that dropshipping needs more time to set up than support. Affiliate marketing, though, focuses on selling the product. 

Dropshipping vs Affiliate Marketing Quora: Which is More Profitable?

Quora covers many topics, including which is more profitable: dropshipping or affiliate marketing. David Barnes, an expert in affiliate marketing and dropshipping from Jacksonville, Florida, says you can make money with both. Still, he believes affiliate marketing is more profitable because you don’t have to run paid ads. He adds that affiliate marketing can offer higher commissions. It also requires less worry about having physical products.

Katrin Brandberg, a Swedish affiliate marketer for 8 years, said both affiliate marketing and dropshipping can be profitable. However, she said that the problem with dropshipping is that you must deal with customer and product issues.

Lastly, Ryan Levacy, a digital marketer in Austin, Texas, said that affiliate marketing is more passive than dropshipping. Ryan said that, after promoting the offer on their email list, they sold 15 units and earned $2,500 in one day from a product review he wrote 2 years ago. He said it depends on how involved you want to be with customers. Ryan prefers affiliate marketing as the affiliate partners handle customers.

What Is Better, Affiliate Marketing or Dropshipping?

There's no correct answer on which is better between dropshipping and affiliate marketing. Both dropshipping and affiliate marketing have pros and cons. They have minimal risk and low start-up costs by being the middleman. Only you can decide what best fits your skill set and long-term vision.

Affiliate marketing doesn't require significant funds because you pay with your time. You need a large, engaged audience for your affiliate site or a big social media following. It takes time and effort to build them. Dropshipping is also low-cost, but you'll need an initial budget of $2,000-$5,000+ if you want to set yourself up for success. Dropshipping is about riding trends before the market saturates. It takes a daily grind and the ability to stay one step ahead of the curve. In addition, you need to be an ace marketer with the skills to design high-converting ad content. And be ready to spend money on paid ads and test products (budget for $200-$300/product). 

Local Lead Generation Is Better Than Dropshipping and Affiliate Marketing

Local lead generation is better than dropshipping and affiliate marketing. It offers more control and scalability. Local lead generation is also much less saturated compared to the two business models. Both affiliate marketing and dropshipping have low entry barriers. So, they are vulnerable to market saturation. With affiliate marketing, you just need to promote a product. You earn a commission for any sales. It works even if English isn't your first language. So, you'll be competing with more global affiliate marketers.

Dropshipping needs a low initial investment and overhead. So, it's popular with beginners. Adobe's blog says you can easily "start a dropshipping business." You can do it even if you "don't have the funds necessary to run a traditional retail operation." As a new dropshipper, you can copy other dropshipping companies. You may even sell the same products, post similar ads, and get the same suppliers. 

Local lead generation is less saturated. Natural geographic barriers and its specific skill set are the reasons. In local lead generation, you need to target the right niche in your local area. This type of parameter itself avoids competing with too many players. Local lead generation requires knowledge of basic local SEO. It also means using Google to rank your online assets at the top of its search results. Once it's ranked, you can decide which local business owner will get to rent it. 

Local lead generation has less competition. You also gain more control over your business since you own the digital assets. This control is lacking in affiliate marketing and dropshipping. If the affiliate program changes the commission, you can't do anything. If the dropshipping supplier sends defective or low-quality items, your reputation suffers. Affiliate marketing has the same problem: a lack of control over product quality.

Also, you must spend mostly on paid Facebook ads to see real returns in dropshipping and affiliate marketing. Brad Rosenfeld, Prove's CMO, wrote a Forbes article in November 2022 about rising ad costs. For Facebook ads in particular, the ad costs, according to Brad, have increased by 89%. These costs dip into the profit margins of marketers. Plus, as the industry becomes more competitive, they will only get higher. With local lead generation, you leverage Google's organic traffic to rank your site. We have a course on the local lead generation biz model. It teaches you to build a stable, scalable, passive income. If you want to learn more, consider it.