According to data shown on Google Trend, public interest in eCommerce and affiliate marketing is exploding and has reached the top when writing this article.
Frankly, these results are not surprising, especially in 2020, where tens of millions of people lost their jobs because of the COVID-19 pandemic.
People now realize that depending on one single source of income (9~5 job) is a bad idea, and they start looking for reliable ways to make money online.
Ecommerce and affiliate marketing might be the 2 final results that they obtained. Both of them don’t require expensive start-up costs, as the necessary tools are ONLY a laptop and internet access.
Well, I have tried both of these business models, and I LOVE both of them.
In today’s article, I will show you all the good and bad of the 2 business models, and tell you why affiliate marketing is more beginner-friendly based on my personal experiences.
But first, let’s cover the basics. What is eCommerce and affiliate marketing, and the main difference between them?
Table of Contents
What Is Ecommerce?
E-commerce is a very clear cut idea. You might be familiar with it already.
FYI, eCommerce is also known as electronic commerce or internet commerce. It’s a business model that involved buying and selling goods or services online.
You develop a product or service, or buy the products in bulk from a supplier at lower costs, and then sell it in your online store.
Regardless of which method you use to start an eCommerce business, you have 100% control over your product’s prices, and you own any profit you earned.
What Is Affiliate Marketing?
Affiliate Marketing is a process of earning commission for promoting other companies’ products or services.
There’re many ways to do affiliate marketing, and the common ones are through blogging.
You join an affiliate network (which is free to join), and then find relevant products/services to promote to a particular niche consumer.
In turn, you would earn a pre-determined commission up to 80% every time you make a sale! All the sales you generate for the vendor are tracked via affiliate links from one website to another.
Some of the popular affiliate networks are encompassed:
- Amazon Associates
- Best Buy
- eBay Partner Network
Ecommerce vs Affiliate Marketing: The Main Difference
With affiliate marketing, you don’t need to create, manufacture, or own any products yourself.
You don’t even need to source products, manage shipping or handle customer service, etc.
But with eCommerce, you have to handle all the tasks that are just mentioned.
Perhaps affiliate marketing is easier to manage, but you only earn a percentage of commission from every product you sold.
In contrast, eCommerce enables you to set the prices to keep whatever profits you’re able to obtain.
Pros & Cons
#1: You Get Most Of The Credit
As an eCommerce entrepreneur, when you sell amazing products that a lot of people liked, you will get an excellent reputation from your customer base. As a result, they will keep coming back for repeat purchases.
To rephrase it, a reputable e-commerce store can be incredibly sustainable and makes you a lot of money.
Affiliate marketing will be less likely to get much credit because the affiliate marketer is just a promoter of the product, they aren’t the creator/owner.
When customer decide to repurchase the product, they won’t go to the affiliate sites, but directly to the merchant site.
Unless the merchant offers a membership-oriented product/service that requires a monthly fee, affiliate marketers won’t get any recurring commission.
#2: You Have More Control Over It
With eCommerce, you’re able to get all the leads (i.e. names, emails, and phone numbers) when peoples purchase directly from you.
As you have control over the customer list, you better your odds of increasing your customer lifetime value by getting repeat sales through email marketing or other marketing approaches.
#3: Can Be Scaled Up Very Quickly
Most eCommerce businesses rely heavily on paid traffic. One of the benefits of this is that it could enable the company to be scaled up very fast with high ROI ad campaigns.
Besides using paid ads, eCommerce stores also can leverage affiliate marketing in expanding their business and skyrocketing their sales volume, just like what Amazon and eBay did.
#1: Not Easy To Handle
Starting an eCommerce store often needs a group of people to work together so that the entire process can be done smoothly.
- Inventory management
- Product packaging
- Product fulfillment
- Customer service
- Set up payment processing systems
- Accept returns / refunds
- and everything else
Imagine there’s no team behind your business, and you have to handle all the tasks ALONE.
It could be the worst nightmare for new online entrepreneurs because it’s really time consuming and stressful.
#2: Higher Startup Cost Than Affiliate Marketing
This is pretty straightforward.
As I mentioned earlier:
- First, you need a TEAM to run a successful eCommerce store. The cost of hiring VAs or employees won’t be that low.
- Second, you will be mainly driving traffic to your store with paid ads in the beginning, and this will cost you thousands of dollars (or even more) every month.
After adding up other necessary costs like shipping and handling fees, product restock, and storage costs, you can know that the initial cost of starting an eCommerce store might not be affordable for beginners who run on a tight budget.
#3: The Problem of “Deadstock”
Sometimes, eCom business owners might run into the trouble of having “dead stocks”, which referred to extra products out of style, out of season, and unable to sell.
When this issue happened, they might face a few losses because those products are either giveaway to customers as free gifts, or manage to sell them at lower prices.
#1: No Customer Service
With affiliate marketing, you are acting as a middleman between potential buyers and the vendor.
You provide the potential buyers the information that they need and then link them to the vendor’s site.
When they make a purchase, you get paid with no extra cost applied to them. It’s a win-win-win situation for all parties.
As the payment process is only happening between the vendor and customers, without your direct involvement, you don’t have to worry about ANY customer service/product fulfillment/refunds/queries. It’s the vendor’s responsibilities.
#2: Location Freedom
As you already knew, starting an affiliate marketing business doesn’t require you to develop a product line or invest in any reselling opportunity.
That means you don’t need to stockpile the products at the warehouse rentals, and the entire sales process is completely hands-off.
All these allow you to have the complete freedom to work anywhere you want in the world, as long as there’s internet access.
#3: Extremely Low Barrier To Entry
On the whole, all you need is a website and email list (for follow-up customers and get repeat sales) to start building your affiliate marketing empire.
The essential components of a website like domain name and hosting will only cost you around $100~$300 per year. So it has less financial risks as compared to opening up an eCommerce store.
In fact, you can actually build a profit-ready website for FREE. I will show you how to do it in a second.
#4: A Great Way To Build Passive Income
Promoting affiliate product that provides recurring commission is a great way to build a passive income source. As long as your referrals keep using the product, you will get paid regularly.
When your affiliate marketing business reaches a point that made you a good amount of money, you can reinvest the money into outsourcing the content writing job to a “ghostwriter“.
You can then focus on building the next affiliate marketing site to make a second source of income.
This is the benefit that eCommerce isn’t able to give you.
#1: You Have No Control Over The Business
Like I keep mentioning, as an affiliate marketer, you are like a promoter or a middleman of a vendor.
You have no control over the products, customer leads, and a lot of things, which sometimes makes things easier to manage.
But if bad things happen to the vendor and the business fizzled out, your income will come to a screeching halt, and nothing you can do about it.
#2: Takes A Longer Time To See Results
For most of the part, you will be relying on free traffic from search engine results instead of using paid ads. This is because when you stopped buying ads, your web traffic will stop coming in, and you can’t get new sales anymore.
In order to maximize the free traffic that you could obtain from the search engines, your website content needs to target the most appropriate keywords and make it as SEO-friendly as possible.
Generally speaking, it takes 6~12 months for you to start seeing decent SEO results. But I can guarantee you will reap the rewards you plant. The more effort you can put into it, the more results and income you will enjoy down the road. This is so true in this business.
Both Are Great. But Why I Prefer Affiliate Marketing?
The main reason I prefer Affiliate Marketing rather than eCommerce is that you don’t need significant capital to start and get results in affiliate marketing.
All you need is a laptop, an email list, and internet access. With all these tools in place, you can then promote affiliate offers with free traffic.
While affiliate marketing couldn’t make a lot of money in less time, it comes with significantly less risk and less work.
Furthermore, affiliate marketing has a lower competition than eCommerce when writing this review.
Take a look at the figure below.
Since affiliate marketing is still not prevalent in most countries, it’s less competitive. The best time to start the business is right now.
If you’re patient enough, building a 6 to 7-figure business with less than $1000 financial investment every year isn’t impossible in affiliate marketing.
4 PROVEN Steps To Build A Profitable Affiliate Marketing Site
Step #1: Pick A Niche
First and foremost, you need to pick a niche for your affiliate marketing business.
You can think of it as choosing an interest, passion, hobby, or something you want to learn about.
You’ll create content around the niche that you have chosen, so don’t ever pick a niche that you don’t understand/interested because you may quickly lose interest in your business even if it’s profitable.
Here’s a great article with a video walkthrough on how to choose the best niche for your business. You’ll need to sign up for an account to get access to the resources, but it’s free to sign up.
Step #2: Build A Website/Blog
Although there’re ways to do affiliate marketing without a website, I still reckon that having a quality website or blog is the most profitable way to monetize your business.
With today’s technology, building a website is not exclusive to tech-savvy anymore. Even an average joe could build a profit-ready website with a fingertip. I know that sounds scammy, but it really is!
You can build a website in a couple of minutes for FREE in the first 6 months with SiteRubix. 6 months is considered more than enough time to decide whether you are serious about it.
Step #3: Attract Visitors
Now your website is up and running 24/7. The next thing you should do is loaded your website with engaging articles and “SEO” it.
If you’re like me, who doesn’t have much capital when starting up, you can utilize SEO to get targeted traffic for free.
SEO stands for Search Engine Optimization is the process of optimizing your website, so your content could get higher rankings on the search engines to increase the click-through-rate.
If this sounds vague to you, take a look at the graphic below to get a more in-depth insight:
Step #4: Earn Revenue
As I keep emphasizing earlier, affiliate marketing is not a get-rich-quick scheme. If you are using SEO to drive traffic, it WILL take you a lot of time (6~12 months) and effort to see results.
This is the main reason why most people aren’t interested in affiliate marketing, or they give up early because it’s really not easy.
For sure, if you know how to utilize paid ads to gain traffic, you will be able to see results faster, but I always encourage people to focus more on SEO because of 2 main reasons:
- Paid ads are not easy. It requires a good amount of knowledge to run profitable ad campaigns. If you aren’t experienced in this, you are basically lightning your money on fire.
- When your paid ads stop, your web traffic stop. And hence, your income will be stopped, too.
When you make to that point when SEO starts to get traction, free organic traffic will be rolling into your site like a snowball effect. That’s when your affiliate commission starts to skyrocket.
The Secret Platform That Guides Me To Earn My First $1000 Online
Kudos to you! You’ve just read 2300+ words and still counting. If you make it this far, I commend your commitment.
Meanwhile, I can also feel how serious you’re when it comes to making money online.
Indeed, affiliate marketing and eCommerce are great choices for beginners to start building their own online empire.
However, my first recommendation for all beginners to make money online is always affiliate marketing because of the low risk and affordable startup cost involved. In fact, you don’t even need to pay anything if you use SiteRubix to get started.
Affiliate marketing is actually correlated with eCommerce. Like Amazon and eBay, both have affiliate programs for you to start making money by promoting the products.
That said, affiliate marketing is not going to disappear. Because e-commerce is growing at a pace that no one can predict.
With the growth of e-commerce, Affiliate Marketing is going to expand as well.
If you want to hone this high-income skill with the right training, check out my top recommended Affiliate Marketing training here.
Rest assured, this training is:
- 100% Risk-Free ➜ Free to get started
- No hypes ➜ They’ll set you the right expectation toward affiliate marketing in the beginning.
- Active community ➜ There are a lot of successful affiliate marketers in different markets ready to help you out.
You probably still hold a healthy dose of skepticism towards my top recommended training.
No worries, as I said, they’re FREE to get started.
You can leave anytime if you found the training didn’t suit you, with no commitment required.
So wait no more, click the “Learn More” button to discover my top recommended learning platform that can help you turn your passion into profits with Affiliate Marketing!