When it comes to the subject of Ecommerce vs affiliate marketing, there are a lot of things to take into consideration and in this post I’m going to give you some realistic takes on both business models and which option is better for you to start yours in.
I’ve done a little bit of eCommerce and a lot of affiliate marketing (see my about me as well as my affiliate marketing income reports), so my personal preference is towards to the latter, but I know enough about both business models to give you enough guidance to help you decide, because I find a lot of people who ask me about either business model, understand very little about it.
Ecommerce vs affiliate marketing. 5 general things to know:
1) It’s generally cheaper to start an affiliate marketing business vs eCommerce business.
2) Both business models require a lot of practice, time and energy to work.
3) E commerce is better for people who use paid ads. Affiliate marketing is better for blogging.
4) Affiliate marketing is a bit more flexible and beginner friendly than eCommerce is.
5) Both business models have many methods that can be used to make them work.
These 5 points are hard to fully comprehend unless you have experience with both models, which is why I want to break down how each works specifically and what is required for them to work.
If you’re new to either model, this will help you gauge realistically what’s expected and better decide which one is more suitable for you.
What is eCommerce?
It’s simply a website with a list of products on sale. Once you visit the site and click on a product you wish to buy, you’re taken to a checkout cart, buy the product and are shipped it.
The process of making websites like that and driving traffic to them is called ecommerce.
Examples of an eCommerce business:
1) The first is drop shipping.
You set up a website and list the products for sale on your online store. But you don’t own those products.
What happens however is that when someone buys the product on your site, you order it for them from another seller and ship it to them. A lot of people practice drop shipping because it doesn’t involve having to own the product.
2) The second is running a Shopify store:
Shopify is an ecommerce platform which helps you set up an eCommerce store. You get the site, the checkout cart and all the other ingredients required to run an eCommerce website. You pay monthly for this service but if you can make more sales from it, then it’s worth using it.
Note: Most people who practice eCommerce do drop shipping and/or run a Shopify store on their site.
3) The third is running a regular WordPress site with Woo commerce on it:
Woo commerce is a plugin you can use on WordPress (for your website) which creates a checkout cart on it. The benefit of using this is that you don’t need to pay for services like Shopify.
4) The fourth is actually running your own e store and owning all the products:
The biggest eCommerce websites like Amazon typically have this sort of quasi model. They have their own warehouses with the products they have on sale and they also allow people to sell their own products on their platform too.
Each of these business models is in more than one way connected to one another but at it’s core, you have:
- A giant website.
- An ecommerce store.
- A checkout cart.
What it takes to succeed with eCommerce:
1) Paid ads (in most cases):
Most successful eCommerce websites drive traffic to their stores through paid ads. Things like:
- YouTube Ads.
- Facebook Ads.
- Bing Ads.
- Other pay per click networks.
They find audiences on these networks that would be interested in their products, make ads for those audiences and then attract them to their site so they can buy the product.
2) Blogging (rare):
Some people choose to promote their eCommerce store products through blogging about them. The idea is to get those blogs to appear on search engines and drive free visitors to the product page on your website.
This is rare because it’s a double job kind of thing. You first have to write the blog post, then link that blog post to the product page on your site, then link that to the checkout, so it becomes a 3 step process (more steps = lesser sales).
3) Email marketing:
A lot of successful eCommerce websites survive on email marketing which are gathered from existing customers who come to their site. This then allows the eCommerce website to send out emails about sales and upcoming products. I know from personal experience that I am signed up to numerous eCommerce websites I regularly buy from and they often send me flash sales I take advantage off.
4) You can actually do affiliate marketing on ecommerce websites:
I generally don’t recommend this but on your products pages, you can literally promote affiliate products. The thing is, you are less in control of the pricing, so your profit margin might go down a lot more (you’ll likely be using paid ads to drive traffic, so it’s tough to break even).
What is affiliate marketing?
It’s just the process of promoting products you get commissions for. You don’t have to own these products either and can promote any product from any affiliate network that approves you to be their promoter.
There are many available ones including:
Generally, there is less red tape in promoting affiliate products vs selling eCommerce products. You basically just have to get approved to promote a product/s and then input that link through one or more methods.
Examples of affiliate marketing:
1) Blogging and promoting affiliate products there:
This is the most common and beginner friendly option. You set up a blog on a specific niche (like hip pain relief) and do affiliate product reviews on products in the hip pain niche.
In those blogs, you provide affiliate links to the order page to buy hip pain products (it basically becomes a 2 step process).
2) YouTube videos:
You can set up an entire affiliate business on YouTube by making videos on any niche topic or product (see how to review products on YouTube) and link people in the description and pinned comments of each video to your affiliate link URL.
3) Paid ads:
Affiliate marketing is also commonly done with paid ads (like eCommerce), but most typically with high ticket products (since the cost of paid ads adds up quickly). With pay per click affiliate marketing, you typically do this:
- Find a product that is popular.
- Make an ad on it from a pay per click network.
- Steer the ad to a landing page with great copywriting methods (basically a review page).
- Link people in the lander to the product (they buy it from the vendor through your affiliate link).
This is typically how an online sales funnel works in the paid ads affiliate marketing world.
4) Email marketing:
Email marketing is also commonly used in affiliate marketing but it typically takes a traffic source to make it work. For example:
You need to have a traffic generating blog, YouTube channel to get visitors to turn into emails to then market to.
What it takes to succeed with affiliate marketing:
If you’re a beginner to this, then a good starting point is blogging and specifically on a good niche you like. However, it will take about a year to make this work as blogging is a huge part of affiliate marketing success. It will bring you free traffic and allow you to make money off that and it certainly beats using paid ads for the money you can potentially waste on that.
Any of the other methods above I mentioned will also require a learning curve to understand, use and master and for all of this, I strongly advise joining a program like Wealthy Affiliate as it does teach all of these principals.
The biggest similarities between eCommerce and affiliate marketing:
- Both are forms of online business.
- You can actually sell products you don’t own in both models.
- Both options work with similar methods (blogging, paid ads).
- You can do affiliate marketing on an eCommerce website.
The biggest differences between eCommerce and affiliate marketing:
1) You promote other people’s products with affiliate marketing with links. With eCommerce you promote other people’s products by ordering them yourself (drop shipping).
2) Typically success with eCommerce is mostly based around using paid ads intelligently and funneling paid ad traffic to good products people will buy. It is a skill and does require you spend a lot of money to learn it.
Success with affiliate marketing is much more open ended and flexible. You have blogging, paid ads as well, but also YouTube and other methods available to succeed at this business with.
3) If you’re into writing and expressing yourself, affiliate marketing would likely be a better starting path for you as you can blog about what you like and express yourself there. Lots of bloggers do well in affiliate marketing following this advice.
My personal thoughts on eCommerce vs affiliate marketing:
Both business models work and can be quite profitable, but if you’re just getting into the online business world with little investment, then affiliate marketing is where I’d recommend you begin.
The barrier to entry here is far more flexible and less expensive. It takes more time to set up, but the marketing knowledge and experience you’ll get from learning this material can help you cross over into the eCommerce realm once you’re ready.
For me personally, I like to stick to affiliate marketing because of all my experiences there, but I do not deny the power of eCommerce businesses. I just know from experience a lot of people think there’s less work involved with eCommerce websites, when in fact, it’s not true and more money is spent there. But this article should be give people a clear understanding of both models to decide which is better for them.
One thing I can recommend is Wealthy Affiliate, whose training covers both of these business models so whichever option you decide to start with, you’ll have great training in either online business option to go with.