To become an affiliate or a reseller - Which route should you choose, and why?

To become an affiliate or a reseller - Which route should you choose, and why?

A ton of people want to sell something online, but they might not have their own products, so do they become an affiliate or a reseller?   Now, both of these have benefits and weaknesses, so I'll try to cover both as well as I can in order to give you a better understanding of what is needed for both and hopefully that gives you enough information to make a choice.  In the beginning, people tend to get pulled in a few different directions when it comes to specific methods and "tricks" to making money.  You can make your own service and sell it, you can become an affiliate and make other people money while getting a commission, you can sell other peoples products and have the customer think it's actually yours or you can try to go the authority website route and get advertisers to pay you for ad spots.  Each of these routes can make you a lucrative amount of money, or they can make you go broke pretty quick lol.

In the world of online marketing, there seem to be a lot more affiliates because of how easy it is to get started.  Take seocheckout.com for example, you simply have to register an account and you're already set up with affiliate links and banners which you can promote to random people online in hopes of getting them to come here and make a sale, making you some money.

On the other hand, you have something on the other side of the spectrum, and that is drop shipping.  Sure, they have similarities if you are an affiliate for a physical product, but they're actually pretty different in terms of how everything works   In this discussion, I'm going to be going through the ups and downs of affiliate marketing and drop shipping so you can see which would be best for you.


Affiliate Marketing
This method to make money online is where you sign up for a system like seocheckout, Amazon, Clickbank, and various other networks in order to get links for offers and services so you can place these links in front of potential buyers.  People have made millions from affiliate commissions, but they are the 1% of the 1%.  The average marketer doesn't break the bank with affiliate marketing right away, it takes time, but it can make you enough money in order to have a stable enough income to quit your job if you keep it up

The Good:
Affiliate marketing is good if you don't want to talk to people.  You'll basically be signing up to get some affiliate links and getting a website some traffic in hopes of making a sale.  When you do make a sale, you will get a commission from it and get paid out at a specific time during the month.

There is no language barrier when it comes to affiliate marketing.  If you only know English a little bit, that's good enough for affiliate marketing because you don't have to chit chat with potential buyers, that's the website owners responsibility.

The Bad:
The downside of affiliate marketing is that you will usually feel like you're making someone else rich.  This is because most of the good products or services won't give you a 50% commission or higher.  Take Amazon, for example, you can get up to I think 8% commissions per sale, and that's not very much.  Digital products tend to give you a high commission, but they're not always the easiest to sell unless you've been doing affiliate marketing for a while and know a lot of little tricks in order to get sign-ups.


Dropshipping
When you become a drop shipper, you're basically agreeing with a company that you're going to sell their wholesale items for a price you want to determine on your own.  I've actually been doing drop shipping for a while now and I'll sell high then buy low.  Some of you are saying "You said that backward, it's buying low and selling high!" but I did say it right lol.

The Good:
The real beauty with drop shipping is that you don't have to invest in a bunch of stock in order to sell a ton of items on your website.  You simply list the items on your website, and when you make a sale, you go to the wholesaler or website with the product and purchase it with the buyers' information but using your own payment option. 

Drop shipping is good if you want to be portrayed as a big authority website, with hundreds or thousands of products, but you don't have the money to invest to actually purchase the products and fill up a warehouse.  You can make a lot of money with drop shipping if you do everything right.

The Bad:
The bad thing about drop shipping is you will always be worrying when you get a large sale.  You will get the sale, purchase the product and have it shipped to the buyer.  But what you'll be worrying about is fraudulent transactions from people who want the item, but have planned to file a chargeback even before they ordered it.  This happens every single day and it's a business killer because you not only have to cover the cost of the item(s) you just purchased from the wholesales, but you now have your own price deducted from your balance.

Look at it this way, if you started out with $2 in your account and you have someone purchase a $3,000 order, that's awesome!  Now you have $3,000 in your account but it costs you $750 to buy and ship the items to the buyer.  That's not a bad deal at all, you now have $750 sitting in your account and that's all profit from not having even touched the product lol.  The really bad part of this is when someone purchases high ticket items and then files a chargeback after they get the goods.  Since you have $750 sitting in your account, you can't cover the $3,000 that just got charged back to you, so now you're -$750 and if you didn't prepare for this, you're going to have to dissolve your company or figure out a way to fix this.




In Conclusion
There are always ups and downs when it comes to any sort of method to make money online.  Some of the bigger risks will have better payoffs, but they could also bite you in the butt and make it more of an uphill battle to get back to where you started off.  Most marketers will start off with lower-priced services and products so they don't have to worry about chargebacks as much, so I would recommend that if you do decide to get into drop shipping and don't have a decent amount of money to protect you from going negative


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Thanks!

Razzy