Why do I say Affiliate Marketing is better than selling products? I have been selling products online through Amazon, eBay and our own website since 2010, and it has become more and more difficult as time goes on. Let me go through one by one and see the advantages and disadvantages of each method.
Affiliate Marketing versus Dropshipping
Dropshipping is where you get the order on your own website, and the Dropshipper send it directly to the customer. But to make any profit at all, this usually means sourcing from China one of the manufacturers listed on Ali-Express. The system works in about 75% of dropship sales, but the other 25% will drive you crazy as there is hardly any way of knowing the quality of goods delivered or tracking them. For me that was a NO NO. I’ve been there and done that for a short time only
Affiliate Marketing versus eBay
I started back in 2010 with eBay when a very rich old school friend agreed to supply me with kit to sell. There was good Margin in it and even with eBays fees there was a good living to be had. Especially that I was the only one on eBay selling his goods, which were well advertised in the newspapers. And the amazing thing was that, although he had 65 retail shops of his own, and his website selling his goods, people trusted eBay sellers more because of their money back guarantee. Right from the start, I always had an eBay “Featured” shop costing £77.00 + VAT per Month rather than pay as you go as it works out cheaper if you have a lot of products.
https://www.ebay.co.uk/help/selling/selling-fees/store-fees?id=4809#section4
However things gradually got worse as more and more of my suppliers bricks and mortar dealers saw eBay as an opportunity and started selling on eBay. So to win sales from my competitors, I started using a repricer tool. This allows you to set a top price and a bottom price you will accept, and enables you to beat off most of the competition. As you can imagine the profit margins decreased but we got the sale 90% of the time. but it became a sort of Pyrrhic Victory.
The next thing to diminish sales, was that the Chinese took note of how many containers of each product they were sending to my Supplier and thanks to the internet, started looking at the price that we, in the UK were retailing for. Knowing that retail customers would not wait for shipping from China, the Chinese bought huge warehouses all over the UK USA and Europe and promised next day delivery, selling at much less prices than we could afford to.
If your supplier has a solid brand it will protect you somewhat, but people being people will just buy the cheapest.
Affiliate Marketing versus Amazon
In 2012 I had a phone call from Amazon asking me if I would like to sell on their platform. I certainly would as at that time Amazon treated their sellers fairly. But with the fees much higher than eBay, I had to sell our products at a higher price, which for a while worked well. And the competition arrived and we all got repricer programs which resulted in a race to the bottom.
Then Amazon specifically sent their employees to Chinese manufacturers to teach them how to send their products to UK and USA and EU fulfilment centres. One wonders how our governments allow that.
My wife came up with a good idea though. One of her friends had a mastecomy on both breasts. And after a bit of research my wife found that silicon breast forms were available in China at less than a quarter of the retail price over here. So we bought £2,000 worth of them on a credit card and put them on Amazon, and they sold like crazy for 2 years. Pre- Brexit we sold them Amazon.co.uk, Amazon.de,Amazon.fr, Amazon.es and Amazon.it. There were only 3 other sellers selling the same at that time. Now there are more than 200, mostly the Chinese themseves.
The only way to make money on Amazon is to get your own barcode on something you’ve either imported or manufactured yourself. And if you do well, after a few years, Amazon copy what you are doing, and you find that you are competing with Amazon who sell it at 2/3rds of your price. Of all the Amazon methods, manufacturing the product yourself works best. And you have got manufacture for at least 30% of your sale price
And that is why I switched to Affiliate Marketing.
If you need to ask questions, do it through the comments section below, and I/we will answer you within 24 hours
I really appreciate how you lay out the advantages of affiliate marketing in such a clear way. It’s motivating to see how flexible and accessible it can be, especially compared to traditional business models. The points on low startup costs and passive income potential really hit home. Thanks for breaking it down and showing how anyone can get started!
Thanks Randi. I appreciate your comment all the other methods you are vulnerable to competition and outright stealing your ideas
I thoroughly enjoyed your article on why affiliate marketing is better than selling products. Your personal experiences with dropshipping, eBay, and Amazon provided valuable insights into the challenges of each method. I was particularly intrigued by your point about the unpredictability of dropshipping from China, where you mentioned that “the system works in about 75% of dropship sales, but the other 25% will drive you crazy.”
Your discussion on the diminishing profit margins due to increased competition on eBay and Amazon was eye-opening. You noted that “to win sales from my competitors, I started using a repricer tool,” which led to a race to the bottom in pricing. This highlights the importance of choosing the right business model.
Thanks for the praise. Its appreciated. My wife made a fortune on Amazon when her friend who had a double mastectomy bought breast forms in the UK for £89.00. SO my wife traced a company in China that sold them for around $10.00 and she made lot of money for about 2 years selling the for around £30.00 and pre Brexit in Europe for 40 Euros. That was 2015-2017 but now there are 200 Chinese sellers selling them for about 50% above costs.
Thank you for your article, I really enjoyed it. I guess you could sum it up with “it’s a dog-eat-dog world out there!” Just as you start doing well, someone comes in, copies you cutting into your profits and market share. With affiliate marketing, there is no inventory, the competition will not be as fierce as selling the actual product. Further, with the Chinese being your competitor it becomes a numbers game. Also, you don’t have to worry about affiliate marketers flooding your market! And lastly, I am guessing with affiliate marketing, you don’t have ebay or amazon telling you what to do.
Hi Mark your comment about eBay and Amazon is spot on. There are real bullies. No matter how outrageous the buyers scam is they always side with them