No business model is quite perfect. The best model is always going to depend on the goals of the company of course, of your industry and of your resources.
But while this is true, there are certainly some business models out there that come pretty close to being perfect. And probably the best example of this of all is dropshipping. Why is dropshipping so special? Let’s find out…
The Problem With Affiliate Marketing
Affiliate marketing is the route that most internet marketers will take when trying to make money from a blog or a social media channel/mailing list. The idea is simple: they promote someone else’s product and then they get a profit.
The problem is that these products are almost always digital products. In order to get the biggest money, that’s what you need to sell.
While this has big advantages for the manufacturer, it has some significant downsides for you. For starters, the appeal of a digital product is much smaller than that of a physical product. Try and sell a digital product to your Grandma for instance and you won’t likely have much luck. The same goes for trying to sell digital products to your Mum. Probably your Dad. Probably even your friends!
The other big issue with digital products is that you’re sending customers away from your site. They’ll be more likely to remember the company that sold them the product versus the blog that sent them there! And this prevents them from buying multiple items through you.
The Problem With Selling Your Own Product or Reselling
So you could sell your own product, sure. But then you have to manufacture it, spending thousands of dollars and potentially wasting your money if the product isn’t a hit. Many of us don’t have the money or the knowhow to go this route.
So you can resell instead… only this way you still need to take a big risk by spending lots of money on inventory. Then you have to find a way to store all that product and then you have to deliver it and worry about whether it arrives on time or not. It’s a huge amount of admin and not much fun…
But with dropshipping, what you’re doing is selling a product through your own store as though it were your own item and then letting the wholesaler worry about fulfilment and delivery – as though it were an affiliate product.
This has all the benefits of selling an affiliate product because you can sit back and let the orders roll in without having to do anything. But it also has all the benefits of selling a real product as a reseller or manufacturer – you get to keep your customers on your site and improve your brand awareness, while also selling real, useful products.
Best of all, some companies will even offer ‘white label’ dropshipping services. This means you can actually print your logo on the product and claim it as your own!