Posted by Affiliate Marketing Vs Dropshipping today. So, you’re looking to start affiliate marketing or dropshipping, but you know nothing about it in today’s climate. All your knowledge of these businesses is from the mid-2000s to late 2010s, when blogging, SEO, and email marketing were the key strategies for affiliates.
Now, you’re in a different climate altogether. You find YouTubers like Greg Gotffried, John Crestani, and Mike Vestil telling you that Affiliate marketing is the route to go, while others like Nathan Nazareth and Biaheza swear by dropshipping.
Still, there’s a third group that says these business models are dead or unsustainable. Which group is right? Or is anyone group even right? Find out the answer as we dive deep into Affiliate Marketing vs Dropshipping in 2024. We’ll explore both models and see which still reigns or which has fallen to now being a ploy tool for selling courses.
Affiliate Marketing Vs Dropshipping
Let’s get into our story by explaining what affiliate marketing and dropshiping are all about. How are you supposed to make money with these business models?
Affiliate Marketing
First up is affiliate marketing. This strategy involves you spreading the word about a product or service and getting paid a commission for every successful referral, i.e. when they complete a purchase. Sometimes, it might be recurring commissions or a one-time payment.
Hundreds of companies run affiliate programs like Amazon, Etsy, and eBay. You can even join dedicated affiliate marketing sites such as ClickBank and promote listed products for a cut in sales.
You promote a product to buyers, they click your link, and you get a transaction cut. Pretty easy, right?
John Crestani would beg to differ. Despite starting Affiliate marketing at a time when the industry was just taking off, he only managed to get his entrepreneurial journey on track after 4 years. Prior to this he saw affiliate marketing as a side gig and kept slaving at an 8–5 job he didn’t find fulfilling. He had to because that unfulfilling job was what paid the bills.
In 2012, John took a leap of faith, putting away the fear of disappointing his family and friends, and faced affiliate marketing fully. He lost everything in this process and had to begin from scratch. However, with more time on his hands and a passion for pitching products, John managed to turn things around. John now makes millions each year simply by promoting other people’s products.
Dropshipping
Let’s talk about dropshipping. You find a product, mark up the price, and sell it to consumers. Again, it is a sweet gig.
Biaheza, a top entrepreneur in the dropshipping space, also has a story similar to John Crestani’s in that they both rose from grass to grace.
Biaheza got his big break in 2018; what strategy did he use then? Simply running ads on his own Instagram pages for a product. This wasn’t just any product; it was the now famous “teeth whitening pen.” He managed to find a quality product that consumers actually wanted before it became mainstream.
So what were the key attributes that made John Creastani and Biaheza successful in their respective industries? For John Creatsani, it was facing Affiliate Marketing fully, dedicating his time to the grind. While for Biaheza, it was leveraging Instagram posts and ads and a killer product.
Can you replicate these strategies today? Are dedication, ads, and quality products enough to achieve success in affiliate marketing or dropshipping?
The Problem
John Crestani got in somewhat early on affiliate where many of the problems that now plague this business model were non-existent.
Remember how I said hundreds of companies run affiliate programs? The same can be said of the other side of the spectrum, with thousands of people clamouring to join these programs, there’s a massive saturation of affiliates. What we have is a situation where companies receive hundreds of affiliate requests each day, many of which are from shady characters.
Many affiliate marketers lie about the products or services they’re promoting. They fabricate features, fail to disclose that they’ll get a commission, coerce customers into buying products they don’t need, and numerous other nefarious practices. That’s on the consumer side of things.
The affiliate provider also has to battle with affiliate fraud such as URL hijacking, fraudulent leads, purchases from stolen credit cards, mystery shoppers, I mean the list goes on.
If you were in the shoes of brands, what would you do? You can’t stop running affiliate marketing campaigns, you need the customers. So you do the next best thing: raise the bar for entry. Joining your program isn’t a breeze, and affiliates now need to have a strong online following and sometimes live in specific locations, to qualify for your program.
Affiliates now need to have high monthly visits to their website to be eligible for consideration for big affiliate programs. We’re talking 5000–10,0000 monthly visits. To think a few years back, as little as 100–500 monthly visitors would make you eligible to join these programs.
What about the landscape of dedicated affiliate marketing companies like Clickbank? What’s the problem here? Another familiar foe appears again: saturation. Platforms like ClickBank work with you, promoting your links to a product mostly via reviews on websites or content created around it.
In the earlier years, ranking your page on the Google search engine only required you to use as many keywords as possible on your content. You’d see things like “auto repair shops near Georgia” and “auto repair shops in Georgia near me” on a website trying to pitch an auto repair shop to Georgian residents. This setup made it easy to enter. You could start a website today and already be making the big bucks within three months.
Then, a few years later, Google changed its algorithm. Now, you need quality and content volume. Alright, slightly more work for affiliates. But the algorithm didn’t stay stagnant, it evolved to requiring backlinks, then to now requiring that you have quality content on basically every area in your niche regardless of how small or big to rank.
So, essentially, the time it takes for beginners to join the market space and make money early is far behind us. You not only have to compete with the issue of ranking but with giant whales who got in early and now have already established efficient channels to snap up a huge chunk of traffic at the drop of a hat.
Does this mean affiliate marketing is dead for beginners? Does this mean you can’t make money getting into the industry now? We’ll come back to this. Let’s see if the grass is greener on the shoplifting side of things.
The Problem with Dropshipping
Is dropshipping still as relevant as it was a few years ago? A business model where you find things for cheap, mark up the price and sell to consumers. Apple does it, so why can’t you? Here’s the thing: you aren’t Apple, you don’t have a loyal list of customers willing to buy your products no matter how outrageous, and you don’t control the manufacturing process for the products you sell.
To make a profit, you have to mark up the price significantly and sell products from unpopular brands, mostly from China, where quality control is almost nonexistent. Does this sound like the makings of a sustainable business?
As if this situation isn’t bad enough, you now have to deal with shipping. Consumers want their products as fast as possible. Many people pull the plug on an order if they see a shipping period going beyond 3 days.
Promoting your business is now also a hassle. The same problem with the essential overall of the Google algorithm rears its head again. You can’t rank for products as easily for products as you used to.
What about Advertising? The trusted solution that can get your products in front of potential customers. You check advertising rates, Mama Mia; you’ve never seen numbers so high.
One thing you need to know is that Biaheza had spent years learning and grinding his Instagram accounts to amass thousands of followers. Not only that, the teeth-whitening pen wasn’t his first shot at dropshiping. He initially created a Shopify store to sell lash enhancement serums. However he had to close it down as the high advertising fees meant he could just barely break even.
This was a time when advertising cost was a fraction of its current cost, and Biaheza had to pack up shop on his first go due to it. How can you keep up? Your business has you setting a high-cost price, your shipping system sucks, and you still haven’t added the price of advertising.
Are the glory days of Dropshipping and Affiliate Marketing behind us?
The Solution
In the earlier years of Instagram, you could grow your account organically by slapping a hashtag on your content. You barely needed to have followers. A simple picture with the right hashtag could have you reaching thousands of people. Now, such an impression rate is only reserved for the elites — people who already have a massive following. Instagram used to be the king option for affiliate marketing and dropshipping promotion. So, is this the end?
Hold on! What’s this? A saviour that rolls back the glory days and gives you what Instagram used to be but better. Yes, TikTok. This social media giant is on every affiliate marketing and dropshipping guru’s lips. A well-made or just decent video can gain traction so fast it’s unbelievable. It can even be pictures featuring just captions, and you’re on your way to being viral.
You can get millions of views on your content overnight, with users even feeling more inclined to patronize you. Many people often prefer recommendations from real people over traditional ads, making TikTok an absolute monster tool for dropshipping and affiliate marketing.
If you don’t want to go through the viral content route, you can use TikTok advertising. This is especially useful for dropshipping, as the platform uses a powerful algorithm to find potential buyers based on your target niche. Tons of dropship entrepreneurs employ this approach, including YouTube stars.
However, if advertising is to be your main avenue for conversion, expect to spend around 500–1000 dollars on advertising. It’s at this price point most top affiliate marketers, and dropshippers start to turn a profit.
Final Thoughts
To answer the question of whether Affiliate Marketing and Dropshipping are still viable business options today, the answer is simply Yes, these two are still viable business options. However, you’d basically need to fulfil the following rules to have any shot at success.
- Find a Product that’s affordable, fulfils a need for the consumer, and has a wow factor. Sites like Temu and AliExpress are excellent marketplaces for finding such products. Also, if you’re new to dropshipping, you can build your portfolio with the beauty niche. Beauty products are essentials and have a large consumer base, making them ideal for beginners.
- Build an eye-catching website that immediately captures the attention of your consumers. You can emulate the style of the biggest brands in your niche in this section. If you don’t have the skillset to build a website from scratch, you can use Shopify or hire a Freelancer from Fiverr to handle it.
- You have your product and you have your website, now it’s time to get creative with your promotional video. For this, only one form of content is King, and that’s UGC, which is user-generated content. UGCs are videos that are created by regular people using a product, kinda like a review.
- Yes, you don’t have a consumer base, but nothing stops you from hiring someone to create a video for you. It’s all advertising. Users trust such content more than traditional advertising, as I said earlier. And yes, you can find tons of freelancers on Fiverr looking to help you create such videos.
- Next, head over to TikTok advertising and get your ad approved. The rest should be history.
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