Before this week, I had never heard of drop shipping. I had heard of affiliate marketing but hadn’t really given it much thought. This week, I want to record some of my thoughts on the two, including how I could apply that knowledge to a future web business.
Affiliate marketing is fairly simple. Your business will promote a product, and that company will pay commission to you when someone buys a product through that link. I saw a lot of pros and cons with this one. While affiliate marketing sounds simple, it actually takes a lot of time. First of all, you have to build a high-traffic website or no one will ever click on those links. It takes a long time to build content on a website. Some people write content for a year before promoting the site, but some write for a few months. Either way, it requires writers, videographers, etc., and a really great idea.
Another con I’ve noticed is that people generally dislike feeling that blogs or websites are paid to write rather than doing it out of generosity. I’ve seen this is a few instances online. Usually, bloggers can be upfront about it and not have any issues, but occasionally people complain. To gain a large following, you need to know what your audience is looking for, what their concerns are, and how you can solve those. You have to pay attention to them. Basically, everything that you do is controlled by your audience. Because of this, it isn’t always reliable. Some months, people may love your site and visit it often. Other months, they may forget you exist.
At the same time that there are cons, there are also a lot of pros. My favorite being that you don’t have to deal with inventory. Inventory gives me a headache just thinking about it. An inventory business model and affiliate business model differ mainly on what you want your headache to be about.
Drop shipping is simpler than I first thought. At first, it sounded so complicated. It didn’t make much sense at all. Here is a diagram that helped me:
This is the simplest model I could find. Basically, the customer buys something from your website and you send that order to a supplier. The supplier then sends the product to the customer. The great thing about this is that you don’t have to invest money into products that might not sell because you get the money from the customer ahead of time and don’t have to worry about keeping unsold inventory. You only take what you need.
As you can see, if you want an inventory business model, this seems like the way to go.
Drop shipping can have some dangers, though. Before ordering 500 pairs of sunglasses, you probably want to make sure your customer is getting the quality they are paying for. As well, some suppliers will upcharge for more services than others. It is smart to do some research before putting all your money on a supplier, especially if you’ve never worked with them before.