Dropshipping vs Affiliate Marketing: Which Model Should You Choose?

Dropshipping and Affiliate Marketing are both attractive MMO models with simple operations, not requiring much time or initial costs, but still have good profit potential. So, how are these two forms different, and which is the right choice for you? Let's explore the details with NextSky in the following article.

Overview of Dropshipping and Affiliate Marketing

What is Dropshipping?

Dropshipping is an online business model that allows sellers to not import, store or transport goods themselves. When customers place an order, the supplier will process the order and deliver the goods on behalf of the seller. The seller earns a profit from the difference between the selling price and the import price. Thanks to the streamlined process, low cost, and easy implementation, dropshipping is increasingly popular in the online business community.

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What is Affiliate Marketing?

Affiliate Marketing is a modern form of marketing in which an individual or organization introduces a supplier's products or services to consumers through platforms such as websites, blogs, social networks, emails, or online advertising. When a customer performs a specific action, such as clicking on a link, registering, or making a purchase through that link, the affiliate will receive a corresponding commission.

Read more: What is Dropshipping? Everything You Need to Know in 2025

What are the advantages and disadvantages of Dropshipping and Affiliate Marketing?

Dropshipping

Advantages of the dropshipping model

• Easy start, sustainable profit: With just a few simple setup steps, you can operate a dropshipping model and start generating income as your customer base grows.
• No need for a large audience to start: Dropshipping allows you to launch without a large customer base, ideal for newcomers looking to penetrate the market quickly.
• Full ownership of your brand: Dropshipping opens up the opportunity to build a distinct brand, where you have complete control over the customer experience from the website interface to the communication message to create long-term value for the business.
• Extremely low start-up costs: No need to import goods in advance or rent a warehouse, you just need to invest in a sales platform, an economical but potential start.
• High profit margins, freedom to set prices: Instead of just receiving commissions like affiliates, dropshippers have full control over product pricing. With a clever positioning strategy, you can achieve profit margins of up to 20–40% for each order.

Disadvantages of the dropshipping model

• High competition easily reduces profits: With popular and easy-to-find items on the market, prices are pushed down and profit margins are significantly narrowed.
• You must handle customer service yourself: When customers have problems with products, you need to have a clear, professional customer care process and respond quickly to maintain your reputation.
• Less control over the supply chain: If your supplier runs out of stock or delivers late, it will directly impact your customer experience and brand reputation. This is one of the major challenges when you don’t have complete control over your supply.
• High initial setup effort: This model requires you to invest time in creating a store, setting up products, payment systems, and connecting with suppliers. You need to prepare everything before you start selling.

Affiliate Marketing

Advantages of the Affiliate Model

• Low Cost: Like the dropshipping model, affiliate marketing doesn’t require you to import or store inventory, so the initial capital is very low. Even if you promote via text messages, emails or direct referrals, you don’t even need to invest in building a website.
• Easy to join: You can start at any time without any referral. Registration is voluntary, free and just requires direct contact with the provider.
• No worries about operations: The supplier handles all the product, shipping, and returns. Your job is just to promote and attract customers. You act as an intermediary and do not need to directly participate in business operations.

Disadvantages of the Affiliate Model

• Loss of control: You have no control over product quality, pricing, or after-sales service. A bad experience with a supplier can damage the reputation you’ve worked so hard to build.
• Fluctuating commissions: Platforms can adjust their payout policies at any time, leaving your earnings vulnerable without notice.
• Personal reputation is vulnerable: Recommending products that are no longer relevant or of poor quality can cause the community to lose trust in you — something that is not easy to regain.
• Cookies are easy to lose, commissions are easy to lose: If users don't buy right away, you can lose all the commissions you brought in, even though you brought in traffic.
• Competition is getting fiercer: As more players jump into the game, potential markets become saturated, forcing you to be more creative, different, and strategic than ever.

Read more: Dropshipping vs Wholesale: Which Model Is Right for You?

The difference between Dropshipping and Affiliate Marketing

Although there are many similarities, each model has different operating characteristics and profits - this directly affects the choice that is right for each person.

• How it works: With Dropshipping, you directly run an online store and sell your products. With Affiliate, you are simply a referrer, leading customers to visit the supplier’s website through a personal link.
• Customer care: Dropshippers must proactively handle all feedback, complaints, and support requests from customers. Meanwhile, Affiliates do not need to worry about after-sales service at all – everything is handled by the original seller.
• Profit mechanism: Dropshipping brings higher profits thanks to the ability to set the price of the product yourself and enjoy the full difference. In contrast, Affiliate only receives a fixed commission, which often fluctuates not much.
• Payment time: With Dropshipping, revenue is recorded as soon as the transaction is completed. With Affiliate, the commission receiving time can last from 1 to 3 months, depending on the partner's policy.

Should I choose Affiliate or Dropshipping?

Both Affiliate and Dropshipping are business models that require no capital, are easy to start and can be implemented anytime, anywhere. If you want to start simply, with little risk, Affiliate is the right choice because it does not require a website or complicated operations. 

Dropshipping, on the other hand, offers higher profit potential thanks to price control and customer base, but requires more investment in store building and sales strategy. No matter which method you choose, as long as you are persistent and serious, success is still within reach.

Frequently Asked Questions about Dropshipping vs Affiliate Marketing 

Which is better, Dropshipping vs Affiliate marketing?

It depends on your business goals. Affiliate marketing is ideal if you prefer earning commissions by promoting other companies’ products without handling orders. Dropshipping, on the other hand, lets you run an online store without holding inventory, but it requires more effort in product selection, marketing, and customer service.

Can I combine Dropshipping vs Affiliate marketing?

Yes, you can. For example, you can run a dropshipping store while also promoting affiliate products through your blog or website to diversify your income streams.

How much money do I need to start dropshipping?

Starting a dropshipping business is relatively low-cost, typically ranging from $200 to $1,000, depending on factors like your eCommerce platform (Shopify, WooCommerce), paid advertising (Facebook Ads, Google Ads), design, and branding.