Combining Affiliate Marketing with Dropshipping

May 25th, 2007 in Traffic, Website Help by Dan

Is it a good idea to mix dropshipping and affiliate marketing on the same site? For some reason this is a question that I’ve been getting quite a bit lately from people that I work with. The answer really is “it depends”. Of course that’s not the best answer, but let me explain.

You have to decide on what the main focus of your site is. Are you focused on selling the physical products on your site (dropship etc.) or are you more of an information site that is planning on making money from affiliate? In some ways you could say that these two ideas are strategically opposed to each other.

Let me explain.

With dropshipping/retailing, you want people to stick around on the website and actually buy something. That’s how you make money is when people actually buy from you. With affiliate marketing, you make money when people leave your site. Whether you get paid on a per-click basis (adSense for example) or on an action basis (affiliate commissions from sales), you don’t make money when people stay on your website. So, with one idea you want people to stay, with the other you want people to leave. Are you seeing the difference here?

If you have a dropshipping website and you are also placing affiliate ads all over your site, then you have a mixed focus. You also need to look at how much you make on a sale. Let’s say for example you make $10 on a sale but you also have some adSense ads with which you average $0.50 a click (this varies per industry and ad). What you have just done is sold a lead for $0.50. But if that lead had actually purchased something or taken another action you would have made $10. In my opinion that isn’t a very good trade-off if you have a good conversion rate. Now do that same example with a $20 margin. You can see that the more you make per sale, the more important each lead is to you. Don’t sell your leads cheap!

So to make it short, I don’t normally recommend mixing affiliate ads on a dropshipping/retailing website. You could possibly get away with it if you were offering some type of complimentary service through an affiliate link, just make sure you still keep the main focus the main focus.

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10 Comments

doraleecoSeptember 18th, 2009 at 3:31 am

Its really a good example. Thank you for the post.

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Thanks for sharing some nice information. I was not much aware about this Dropshipping before. But, after reading your article, I came to know about this.

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HomeworkerJanuary 27th, 2010 at 8:02 am

You make some great points - the goal of affiliate marketing is at odds with the goal of retailing. If you want to make sales you need to give your visitors as few opportunities to leave your site, before making a purchase as possible. However, if you opt for pay per action affiliate marketing you could integrate your affiliate links into your after-sales communications with your customer - for example include a complementary affiliate link in your sales confirmation email to the customer. Also, if the customer is added to your mailing list you could utilise this to recommend your affiliate products - you could get a high conversion from this, as the customer will trust you, if they’ve had a positive buying experience with you.

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Greg MFebruary 1st, 2010 at 4:56 pm

I agree you definitely made some good points. In my experience, drop shipping with WorldWide Brands is definitely the way to go no matter what kind of drop shipping you are doing, but that’s just my opinion

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MaDeByTeslAMarch 22nd, 2011 at 12:52 pm

Excellent questions!!

“…why are more business owners not putting the people they sell too first?

Simply, they were never trained or told to.

“Why are they not spending time getting to know what the people they can serve want?”

For the longest time business was built on interrupting people and seeing them as simply the consumer. No need to ask for their opinions or what they want.

“…why don’t small business owners spend more time learning how to communicate with the people who make up their target market?”

They are too concerned with making payroll!

“Is it fear?”

Yes

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