What is the Difference Between Affiliate Marketing and Dropshipping?

Dropshipping, whether you’re using Shopify or another platform, is the process where a brand creates a website that they list products on and they take orders from customers. They then arrange for those products to be delivered to the customer. The brand doesn’t ever touch the products, the company that completes the fulfillment is the merchant/manufacturer of the product.

The manufacturer then charges the brand for the cost of the goods. The amount of money that the customer has paid the brand and the amount that the merchant/manufacturer charges the brand are the profits for the brand.

Any problems that are with the order are dealt with by the brand. The merchant/manufacturer does not deal directly with the customer, they are invisible. Even the order is sent out with the brand’s identity.

Affiliate marketing is where a brand advertises products on behalf of a third party. The customer needs to click through to the seller’s website from the brand in order to make a purchase. The brand does not get any money from the customer. Instead, for every conversion that happens, the brand gets a commission.

Commissions can be anything from 1-50%. This can make a big difference. The customer deals directly with the third party for all the after-sales and knows who is supplying the product. Once the customer has clicked through, then the customer has no interactions with the brand for the sale, they have no responsibility.

Both affiliate marketers and dropshippers are technically advertising products that are supplied to the customer by a third party. Both groups need to have merchants/manufacturers in order to have a product to advertise/sell.

On both groups, the brands need to advertise themselves. This can be done with blogging, SEO, social media and other options.

There are two main differences. One is who pays the brand. In affiliate marketing, the merchant or manufacturer pays the brand when there is a successful sale. The amount they pay is a set amount based on the price that the customer pays. With dropshipping, the customer pays the brand and the brand pays the merchant for the goods that need to be sent.

Another difference is who is responsible for the order. With dropshipping, the brand is responsible for after-sales. If there is a problem, then the customer has to contact the seller and they will deal with the merchant to solve problems. With affiliate marketing, the responsibility is with merchant or manufacturer to service the customer.