Affiliate marketing and drop shipping marketing are two different methods of creating income through a web business. There are pros and cons to each method. As this new company wants to work with acoustic guitars, we will discuss how this would be applied in each of these areas.
With an affiliate marketing strategy, the pros are that you don’t ever deal with the customer directly. This can be good or bad depending if you like that interaction or not. In not dealing with the customer, you never have to hassle over returns, questions about the product, etc. Another pro is that you don’t have to process orders and deal with those type of money transactions. A con is that you would have to develop a content rich website that would draw customers into your site. Once they click on an affiliate link, the chances of them coming back to your website is not very high. Another con is that the payback is lower and the time between set up and payback is longer.
With drop shipping, one pro is that you can get a much higher profit margin with each sale. You have access to a large number of products, but you don’t have to spend any money stocking inventory, which also means you won’t get stuck with unsold inventory. Another pro is that you don’t have to deal with shipping and handling of the products. You can sell as many or as few products as you desire. There are some cons to this as well. Some companies charge drop ship fees, and you’ll need to be mindful how deeply this cuts into your profits. Another con is that you will deal with returns and refunds and may possibly get stuck with product if the company won’t take it back.
Taking in to consideration the few pros and cons I listed above, I would recommend going with the drop shipping marketing approach. I feel like the cash return on the investment of time and energy is greater with this method. There is still little capital to get started; it’s actually pretty much the same as the affiliate method. Yes, there can be returns, etc, but those tend to be the exception rather than the rule if you find a company with quality products.