If you have been on the internet for a while, you already know that there are different ways to make money online. However, affiliate marketing and dropshipping are the most popular and lucrative forms of generating online income. Specifically, Amazon affiliate and Amazon dropshipping are the best way to get started selling products online without spending much money or investing a ton of time. But, which business model is better for making money? Amazon affiliate or Amazon dropshipping? In this article, we will compare both and get a conclusion.
Amazon is one of the world’s biggest e-commerce platforms boasting millions of monthly visitors. Amazon affiliate and Amazon dropshipping have gained popularity over the last ten years. However, both business models differ in several ways. One involves buying and selling items while the other involves selling other manufacturer’s or supplier’s item and earning a small Amazon affiliate commission. Many entrepreneurs have recorded huge successes, made passive income, and also built sustainable e-commerce businesses using one or both of these two models. Wondering which is better for making money? You will get to know that later on.
Amazon affiliate started in 1996 when Jeff Bezoz, the founder of Amazon, paid people a commission for referring customers to buy at Amazon. This strategy was intended to eliminate the cost of paying for advertisement, and it worked, leading to the inception of Amazon Associates Program launched in 1998. Fast forward to 2020, and you will see how internet entrepreneurs make money using this program. Dropshipping is a rather new business. You can dropship using your own e-commerce store or via Amazon.
What is Amazon Affiliate?
The Amazon Associate Program involves when an Amazon affiliate sells a product only to earn a certain percent of the product’s sale. The percent is a small Amazon affiliate commission usually up to 10%, depending on the product and sales volume. To become an Amazon affiliate, you need to know or have the following:
- You need to be at least 18 years old.
- You need Amazon affiliate sites or Amazon affiliate store that already has some high-quality content on it.
- You need a niche for your blog (that agrees with Amazon’s content policies).
- You must study the Amazon affiliate program policies to ensure compliance with their policy.
- Your Amazon affiliate website must contain About Us page, Contact page, Privacy policy, Legal Notice, and disclosure that you earn your income through Amazon affiliate commissions.
- Your traffic source must be organic and authentic, bots are not tolerated!
You can start selling on Amazon once you have been approved for an Amazon seller account. But first, you must learn how to set up an Amazon affiliate store.
Here’s what you get from Amazon:
- Opportunity to choose from millions of Amazon products from the best-selling products to popular brands.
- Through the Amazon affiliate program, you can earn a commission of up to 10%.
- You can promote any product without the need to get separate approvals from each brand.
What is Amazon Dropshipping?
Dropshipping on Amazon is an e-commerce process of selling a product without needing an inventory or a warehouse. The seller list products on his/her site without having the responsibility of carrying an inventory. When a customer buys the product, the seller then contacts their supplier who fulfills those sales. The seller sets their own prices and earns the majority of the Amazon affiliate earnings of the sale.
- To drop ship on Amazon, you need to comply with the following requirements from Amazon.
- You must comply with Amazon seller agreement and policies.
- Accepting and processing returns from customers will be handled by you.
- You must provide correct shipping information and identify yourself as the seller of your products on all packing slips.
- You must remove any invoices, packing slips, external packaging, or other information identifying a third-party drop shipper before shipping the order.
Which is Better for Making Money? Amazon Affiliate or Amazon Dropshipping
There are great reasons to join Amazon affiliate or dropship on Amazon. The truth is both business models come with a lot of benefits and drawbacks which we will explain.
Amazon affiliate PROS
- Amazon is a trusted site that boasts millions of visitors daily, so trust and sale are guaranteed.
- Amazon Associate Program is free and easy to join.
- There are no traffic thresholds or other metrics you need to be accepted into the program.
- There are millions of products you can promote.
- Amazon offers excellent customer service to its buyers.
- Amazon has many tools for specifying products, reporting, and analytics.
- With Amazon cookies, you can earn an Amazon affiliate commission if your visitor doesn't buy the product that you refer to.
- You get paid via a bank account.
Amazon affiliate CONS
- Amazon’s 6-10% commission rate is low compared to other affiliate programs.
- Sending Amazon affiliate links (via any means) in emails is prohibited. Since emails have a higher conversion, this rule seems strict.
- While you can earn a commission with Amazon cookies, cookies only last 24-hours. Any sales after that period won’t be counted. But if the customer adds the product to their cart, then the cookie will last 90 days.
- No PayPal payment option – sellers get paid via check, direct deposit, or Amazon gift card. This is a limitation.
- The minimum payout is $100, which can be frustrating for beginners.
Amazon dropshipping PROS
- With over 300 million active users, you are sure to get buyers for what you sell.
- Dropshipping on Amazon requires no inventory; i.e. you don’t need to buy products before selling.
- You don’t have to worry about owning a warehouse as Amazon takes care of shipping.
- No warehouse means you will save the cost of maintenance.
- Since there is no inventory, you will focus on getting more customers via advertising, SEO, marketing, and customer relationship.
- Amazon provides tools that you can use to drive traffic and sales.
- You have control over your profit margin – no fixed percentage on your Amazon affiliate earning.
- Sellers using Fulfilled by Amazon (FBA) don’t have to worry about customer service as Amazon takes care of that.
Amazon dropshipping CONS
- One of the major drawbacks is stated in Amazon’s dropshipping policy “purchasing products from another online retailer and having that retailer ship directly to customers” is not permitted. This policy reduces a seller’s profit margin drastically.
- Since you don’t stock inventories yourself, keeping track of inventory can be a challenge.
- Customers can leave negative feedback if their expectations are not met. Accumulating negative feedback can reduce your chances of winning the Amazon Buy Box and in severe cases, may result in account suspension or closure.
A low-profit margin might be a major drawback but the convenience of getting started make Amazon affiliate a beginner’s choice. Dropshipping on Amazon allows the seller to decide their profit margin but lack of control on inventory, while it saves costs, can be a major drawback. In all, it depends on you. Amazon affiliate can be a great way to start your e-commerce career, but over time, you can transition to Amazon dropshipping, which is a more profitable and sustainable model.
Consider SaleYee Dropshipping- No Hassles With The Shipment, No Inventory, More Positive Feedback
While Amazon dropshipping is recommended, strict policies and stiff competition make it difficult to thrive. When it comes to dropshipping, SaleYee.com is a leading dropshipping wholesale supplier. SaleYee dropshipping platform is an alternative to Amazon in that it allows sellers to make high-profit margins, sometimes 25%. They have a wide range of profitable SKUs that you can choose from. Online retailers using the SaleYee platform enjoy 24/7 customer service and 24-hour shipment. With excellent packaging and delivery methods, you make happy customers and accumulate positive ratings that will boost your ranking….and many more.
Conclusion
Both Amazon affiliate and Amazon dropshipping are great ways to make a living at home. Settling on a decision depends on the resources and criteria that you need to meet. With dropshipping, you can control how much your product cost and make enough money after paying for marketing expenses. With Amazon affiliate sign in, you conveniently promote any product and get paid as well. The choice is yours!
