W03 Reflection: Drop Shipping vs Affiliate Marketing

W03 Reflection:  Drop shipping vs Affiliate Marketing…

 

As we continue to explore business ideas and business models, our attention this week was directed to exploring the advantages and disadvantages of drop shipping and affiliate marketing.  I actually really enjoyed learning about both methods and to be completely honest, struggle to know which of the two would best fit my business idea.  

 

Affiliate Marketing seems to be the easier method with perhaps fewer potential headaches.  Affiliate marketing has a low startup cost and takes care of shipping and returns themselves; freeing a business owner of that duty.  In addition, they handle all customer service and complaints.  This model is simple in that you just add their link to your website and your customers order directly through them.  In return, you get a commission for each sale.  

 

Some disadvantages include directing your customers off your website and having zero control on how much you can charge for the product or the commission amount you will receive.  Often times, it takes several months to see the commissions earned through this model as well.  

 

Drop Shipping offers more risk but potentially a higher payout.  Customers place their order and pay on your website and you purchase directly through the supplier.  Some obvious advantages include being able to name your own price and receiving payments as orders are placed.  This method allows the business owner slightly more control over affiliate marketing.

 

Some disadvantages that are noteworthy include being stuck between the customer and supplier if the customer is unsatisfied with the quality of the product.  In addition, you have no control of the quality of customer service or quality of product your customers receive.  

 

Each of these models offer a great solution to avoiding inventory or a possible loss of income.  At the current moment, I am struggling to know which method is the best.  I look forward to learning more and exploring which option would best suit my needs.  

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