Online businesses have been on the rise since COVID-19 hit us. This was mainly because a lot of people lost their jobs and had to find opportunities online.
To be frank, online business opportunities are endless. You could start a blog, an eCommerce store, affiliate marketing, drop servicing, freelancing and a lot more.
If you are here, then you are probably confused on which to choose between Drop servicing and affiliate marketing.
Drop servicing is a business model where you act as a middleman that connects both clients and freelancers. However, affiliate marketing is quite different. It is a way by which you promote other people’s product to gain a percentage of commission for each sale you make for them.
And I will break everything down so that you can choose one and start building a business online.
What is Affiliate Marketing?
Affiliate marketing is the way by which you promote other people’s product and receive a percentage of commission whenever someone buys that product through your website/link.
You join a particular product’s affiliate program and start promoting them on your website or by using other methods. Whenever a person buys that product from you, the product owner makes some money and he gives you a percentage of commission for that sale.
This is one of the most preferred ways of marketing for most product owners because there is no upfront cost. He just needs to pay the affiliate whenever he gets a sale.
How can you become an Affiliate Marketer
When it comes to affiliate marketing, a lot of people tend to make mistakes. The number one mistake that I see online is spamming those affiliate links all over the internet.
This doesn’t work!
Having a website is the basic necessity of a successful affiliate marketer. Without one, it would be pretty hard for a beginner to make money.
You could do it with YouTube alone but you would need to get a significant amount of views on your videos to convert them into customers.
Here are some things that you need to know and do before you become an affiliate marketer.
1. Choose Your Niche and Affiliate Products
You need to select a niche when you first begin promoting affiliate products. And more importantly, stick with the same niche until you make some money from it.
When choosing an affiliate product, make sure that –
- The product is of good quality (Very important!)
- Does pay a good amount of money for each sale.
- Has a sales page that converts well.
If you are struggling to find a niche and an affiliate product, start with internet marketing, fitness, softwares etc. These niches have a lot of affiliate products to promote.
2. Build a Website
Every successful internet marketer that you see online does have a website. Because without one, you can’t build a business.
You could use WordPress (self-hosted) or use other SAAS Softwares like Clickfunnels, Kartra, Wix etc to build websites.
Using a self-hosted WordPress website is the least expensive one. You can start one for just $3.95/month on Bluehost.
Free Training – How to start a Blog with WordPress
3. Understand your Audience and Promote.
With Affiliate marketing, what you are trying to do is, giving a solution to people by recommending products that can help them solve a problem.
For example, Obesity is a problem that many people face and losing weight is the solution to that. So, recommending weight loss products to those people would solve their problem.
These people are your prospects!
But! These prospects may or may not have the same knowledge or behavior. Basically, these people are classified into one of the following categories: Cold, Warm or Hot!
So, marketing or promoting your affiliate product to these 3 audiences should be different.
Pros of Affiliate Marketing
- Very low investment
- A passive form of income
- Doesn’t need your own product
- Can be recurring
Cons of Affiliate Marketing
- Can take some time to make money if you just use free traffic.
- Some affiliate companies may reduce their commission rates or can even cancel their affiliate program. Amazon is an example of this, they recently reduced their commission rates for almost all the products.
- In the end, it’s just a commission-based job.
What is Drop servicing?
Drop Servicing is a kind of business model where you sell services. But, you do not directly provide them yourself rather you hire a freelancer to do it for you. Once he finishes it, you send them over to your client.
It basically goes like, your customer places an order for your services and gives you the details. You pass these details on to a freelancer who does the service for a lower price than what you asked for your customer. And once your freelancer finishes the work, you send them over to your customer.
Now, the profit comes when you sell your service for much higher money to your client than you pay a freelancer.
For Eg: Let’s say you sell logo designs for $99. A customer buys your service and he inputs some information regarding the logo. A logo design freelancer on Fiverr costs around $20. You pay him and give the information needed. Once finished, you deliver them to your client and you get a profit of $79.
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Related Article – What is a Drop servicing Business? Free Tutorial on How to Start One!
How Can You Start a Drop Servicing Business?
The concept of drop servicing is quite simple and it can be set up quickly. But, If the service that you wish to “dropship” goes wrong, everything else fails.
So, I would advise you to choose a service that is ordered by businesses. Something like Youtube ads manager, Facebook ads manager, eCommerce/Website creation or management, etc tend to get more sales than other services which are bought mainly by individuals.
There are many ways to start a drop servicing business. Some of them are:-
Here, you set up a website where you list your service. Then drive traffic by using Google ads or by manually reaching out to businesses.
You can learn more about this here.
This method is way easier than the above one. But, it may involve communication with your client through emails or calls.
You also won’t be needing any money for a website nor for running ads. You can learn more about this method here.
I wouldn’t recommend starting this one because it will take a lot of time to start receiving orders.
Here, you list your service on Fiverr and then use other freelancing platforms to outsource your the work that your recieve.
You can learn more about this here.
Related article – 10 Best (HOT!) Drop Servicing Niches in 2020!
Pros of Drop servicing
- Low investment
- You can make a huge amount of money from just one sale by selling high-ticket services
- Easy to set up
- You can start making money within one or two weeks
Cons of Drop servicing
- Bringing in new clients can be a daunting task in the first few days.
- If you get the niche wrong, everything will go wrong.
Drop servicing vs Affiliate Marketing: Which One Should you Choose?
Affiliate marketing is something that has been proven to be working for a very long time. People have made money from it in the past and are still making.
But, Drop servicing is something that was copied from the dropshipping model and is quite new. It does work and you can make money from it, but it needs more testing in different niches to know what works and what doesn’t.
If you are a kind of person who has patience and is ready to work for a couple of months, then affiliate marketing would be the best for you!
But that doesn’t mean you can’t make money in the first few days with affiliate marketing. You can do it if you are willing to pay for ads and can invest some time in learning different marketing strategies (using sales funnels, email marketing etc..).
In the case of drop servicing, if you are willing to take the risk and explore something new that can potentially help you make money within the first few days, then you should definitely try it.
Or maybe you should start both the businesses together!
No! I’m kidding, never do that!
Stick with one business model and don’t jump over to the other one until and unless you make money from it.
Anyway, that’s pretty much it. Let me know which business model you are gonna choose by commenting down below!