If you’ve ever considered making money online, then there’s a good chance that you’ve heard about affiliate marketing and e-commerce. They’re both excellent methods of getting a reliable income, but you should focus your efforts on one or the other when you’re first getting yourself established.
The difference between affiliate marketing and e-commerce is that affiliate marketing requires you to sell other company’s products. E-commerce is when you sell your own product. You can sign up for plenty of affiliate memberships to sell more items. E-commerce requires you to set up an online shop.
Throughout this post, you’ll also learn additional info about e-commerce and affiliate marketing, including:
- The pros and cons of each
- How you can start affiliate marketing or e-commerce
- The primary differences between both online income sources
Ready? Let’s dive right in.
How Is E-commerce Different From Affiliate Marketing?
There are all sorts of differences between these two popular income sources. You’ll eventually be able to pick one or the other, but focusing your attention will allow you to make the most out of the experience. It’s also a better way to get your feet in the door of online sales.
If you’re stuck between both of them, this list should help you to understand the right type of online money-making route that you should choose:
- E-commerce requires much more investment upfront. You’ll have to pay the money to open an online store, maintain a website, and create products. On the other hand, affiliate marketing doesn’t require you to make any of your own items to sell to other people. Instead, you can sell other companies’ products.
- Affiliate marketing doesn’t require that you have a website, but it’s definitely helpful. When you’re starting an e-commerce website, you’ll need a platform to sell your products. Affiliate marketing can be done on YouTube, forums, social media, and plenty of other online websites that you don’t need to create to generate sales.
- E-commerce gives you 100% of the sales (in most cases). Unless you’re selling through a third-party service, you collect all of the profits. However, affiliate sales typically only grant you a small percentage of the total sale. Affiliates generally make between 5% to 75% per sale through an affiliate program.
- Affiliate products usually don’t cost as much as e-commerce products. In other words, you can sell something on your e-commerce shop for $500, whereas the vast majority of affiliate sales are for products under $100. That doesn’t necessarily mean that e-commerce generates more income, though.
- You’re much more in control of the whole operation when it’s an e-commerce store. Affiliate memberships can be canceled, adjusted, or upgraded at the whim of the company. For example, Amazon often changes the commission rates for their members without much of a heads-up.
Affiliate Marketing vs E-commerce: Should You Choose Affiliate Marketing?
As with all online money-making methods, affiliate marketing has its ups and downs. Let’s run through the advantages and disadvantages of starting an affiliate membership below.
Pros of Affiliate Marketing
- You can work on your own schedule without having to deal with a boss. Affiliate income is largely passive once you get the ball rolling. It can take a while to get started, but it’s more than worth it if you’re able to find success in any given niche.
- Affiliate marketing doesn’t require any shipping, returns, or customer feedback and complaints. If something goes wrong with the order, it’s 100% up to the company to deal with everything. Your only purpose in the sale process is to link the customer to the product.
- You’ll be able to sign up for memberships with a variety of companies. As long as there’s no hidden clause or agreement with the company (and there usually isn’t), you can make memberships with all sorts of businesses. Check out the commission rates to see which ones fit your expectations the best.
Cons of Affiliate Marketing
- You’ll never receive all of the money from an affiliate sale. Affiliate marketing does not grant a free range of profits. You might be able to get up to 75% commission, but most places don’t go too far over 10% per sale. This means that a $100 sale only gives you $10 before taxes.
- You need to find a way to drive traffic to your affiliate links without seeming spammy. There’s no way to suggest a random product out of the blue; You have to develop trust with your audience to start selling products to them.
- If the company changes its membership rates, you lose money on future sales. All of your links, including the ones from previous websites and posts, will now be worth less money. This drop can result in a massive net loss of income if you primarily make your money through affiliate links.
Affiliate Marketing vs E-commerce: Is E-commerce Worth It?
E-commerce has problems and huge benefits as well. It’s not uncommon to see a successful e-commerce site to make enough income to change the owner’s life. If making your own apparel, accessories, and other products in a dream of yours, then you’ll need to expect the following pros and cons from e-commerce:
Pros of E-commerce
- You get all of the money generated by sales. Granted you should probably reinvest in your company to come up with more ideas and pay your employees, e-commerce definitely makes more money on every individual transaction. There’s no reduced price as you’d get from an affiliate membership.
- Selling products with your logo and business information creates a sense of pride. People will start to trust you, which generates repeat customers. Trust is often the key component of e-commerce, but it can also be the downfall. Always take care of your clients and customers!
- Happy customers will start to drive the sales for you. When you produce good products, word of mouth makes people come back and suggest you to their friends. You won’t have to spend much money on ads, which reduces the net expenses and increases the net profits.
Cons of E-commerce
- E-commerce requires you to have your own product. You’ll need to go through the creation process to ensure that it sticks. If you do it incorrectly, there will be quite a bit of money lost in the process. You might need to take out a business loan and create an LLC.
- All complaints, feedback, returns, and other transaction issues go to you. You’ll have to deal with all of the problems, which requires a whole lot more time on your shoulders. You can hire someone to automate the process for you, but you’ll obviously have to pay them to do so.
- Bad reviews can cause a seriously bad ripple in your business’s progress. If you start off with negative feedback and nothing to combat it, you’ll have to dig yourself out of a tough situation. Free products, adjustments, and late-night emails are all part of the e-commerce process.
Affiliate Marketing vs E-commerce Conclusion
Affiliate marketing and e-commerce are both worthwhile methods of making a decent online income. Whether you’re trying to make a full-time career or you just want some side income, you can use either route to achieve your goals.
Here’s a quick recap of the post:
- Affiliate marketing doesn’t generate as much money per sale.
- E-commerce requires a lot more work right away.
- Affiliate marketing is good if you don’t want to deal with customer complaints.
- E-commerce allows you the ability to sell your business’s products.
- Both methods will allow you to make money online within 6 to 12 months.
I hope you enjoyed this post. This post contains affiliate links, which means I may make a small commission if you make a purchase.