Why Should You Combine Affiliate Marketing And Dropshipping
Global retail eCommerce sales are expected to reach about $8.1 trillion by 2026. Because of this, there’s a growing interest as more people join the booming industry. Affiliate marketing and DropShipping are popular ways to deliver products to customers and generate income in eCommerce.
Statistics show that the affiliate marketing industry is worth approximately $12 billion and generates up to 25% of online sales for big brands while the global DropShipping market was valued at $102.2 billion in 2018 and is projected to grow by a CAGR of 28.8% by 2025.
While both require little investment, they each have advantages, similarities, and differences. However, if you want to be more strategic, combine affiliate marketing and DropShipping.
What is affiliate marketing?
Affiliate marketing is an eCommerce business model that allows you to market your products to different audiences. When you adopt this business model, you’ll provide the customers with a unique referral link or coupon code to the merchant’s site. You can share the affiliate link and promote these products on a blog, website, or social media account.
Once a customer purchases through the affiliate link, you get a percentage commission on every sale. Depending on your products and service, you can get paid a fixed commission or for other actions like leads, free-trial users, website clicks, or app downloads.
As a low-cost marketing strategy, affiliate marketing is quite popular in eCommerce. You don’t have control over the price of the item the customer wants. Instead, you get paid by the affiliate merchants.
For instance, if you are an Amazon affiliate promoting electronic products like fridges, you can write a review on your blog, Facebook, LinkedIn, or Instagram on fridge models, their unique features and add promotional links to the article or social media posts for customers to purchase the product.
Affiliate marketing works well with DropShipping because it also has fewer risks. Your only job is to promote the affiliate link for the customers to buy the products. Because of this, you can work with many brands and merchants since you don’t bear any risks with the products.
The DropShipping business model allows you to fulfill and sell orders from third-party suppliers using your website. You’ll need to partner with a DropShipping supplier for the eCommerce fulfillment process. Once you receive the order, the supplier delivers it to the customers on your behalf.
Your work is to communicate with the customer about the progress of the order and handle any complaints and returns. DropShipping is a convenient means to earn money and a low-risk business because you are only required to pay for the products you sell.
Why should you combine affiliate marketing and DropShipping?
If you are looking to scale your eCommerce business and make more sales, here’s why you should use both affiliate marketing and DropShipping.
Low entry barrier
Both affiliate marketing and DropShipping are easy to get into. To become an affiliate marketer, you just need to sign up for a program and start including the referral links in your content. You won’t need any licenses or certifications to get started.
In addition, since you don’t deal with the products, your expenses will only be overhead costs for your tech, blog, and website. The same applies to DropShipping, especially if you are new to the business. Your costs will be mainly for the eCommerce website to advertise the products and any DropShipping ads you create to help drive traffic.
Fortunately, there are different ways to start DropShipping for free if you don’t have money to invest in the business.
Combining DropShipping and affiliate marketing is an excellent strategy because it increases the sales for your store — both models allow you to offer a wide variety of products from different brands, increasing your market reach.
No need to hold inventory
Inventory management is an essential part of the eCommerce industry. It helps keep track of the inventory from the supplier to the customer; therefore, it requires time and money. Both DropShipping and affiliate marketing don’t require you to keep inventory or monitor stock levels.
With the DropShipping model, you only need to advertise the products on the website. For instance, when you start a DropShipping company, you won’t need warehouse space; a third party handles all the inventory and shipping suppliers. You can sell any product on your eCommerce website without thinking about the availability of stock. The supplier is responsible for replenishing all the orders.
On the other hand, affiliate marketers also just provide a referral link that redirects the customers to the supplier or a coupon code that can be used at checkout. Therefore, they don’t need to have the stock at hand. This allows you to run a more efficient eCommerce operation and reduce the risk of losing capital from dead stock.
Combining these two marketing strategies will make you money without incurring any inventory management costs.
For instance, if your eCommerce store specializes in electronics, you can use DropShipping to get customer orders and have the supplier deliver them. At the same time, you can include affiliate links on your blog post and social media pages to get electronics orders. You can make sales from both methods without having the items in stock.
Affiliate marketing and DropShipping save you a lot of costs and when well done, they can skyrocket your profits. You can boost conversions using affiliate links to earn a commission, then make more money selling different items via DropShipping.
Some of the highest-earning bloggers use affiliate marketing to make millions of dollars a year. There are also many well-known DropShippers earning over a million in annual income.
DropShipping and affiliate marketing can become profitable even when the freight rates increase globally. For example, once you get an order for a DropShipping product, you’ll get the price from the supplier, including shipping costs based on the current economic conditions. You can add the margin to your prices on the website to ensure that you still make a profit.
In 2021, e-retail sales surpassed $5.2 trillion globally, and this is expected to rise in the coming years. This presents an opportunity for more entrepreneurs to get into affiliate marketing and DropShipping. You can start earning high-profit margins by combining these two business models and using automation to scale your eCommerce business.