If you’re looking to start an online business in 2025, you’ve probably come across affiliate marketing and dropshipping as two popular options. Both models are low-cost, beginner-friendly, and don’t require you to create your own products — but they are not the same.
So, what’s the difference between affiliate marketing and dropshipping? Which is more profitable? And which one should you choose?
In this guide, we’ll break down each model, compare their pros and cons, and help you decide which business type fits your goals.
What Is Affiliate Marketing?
Affiliate marketing is a business model where you promote someone else’s product or service and earn a commission when a user makes a purchase (or takes a specific action) through your unique affiliate link.
You never handle the product, customer service, or shipping. Your only job is to drive traffic and generate conversions.
Example:
You write a blog post reviewing a fitness supplement and include an affiliate link. When a reader clicks the link and buys the product, you earn a percentage of the sale.
What Is Dropshipping?
Dropshipping is an eCommerce model where you sell physical products through your online store — but instead of holding inventory, you forward customer orders to a third-party supplier who ships the product directly to the customer.
You manage the storefront and handle customer interactions, but you don’t manufacture or stock products yourself.
Example:
You create a Shopify store selling phone cases. When someone places an order, your supplier (e.g., through AliExpress or Spocket) ships the product on your behalf, and you keep the profit margin between the wholesale and retail price.
Key Differences Between Affiliate Marketing and Dropshipping
1. Profit Model
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Affiliate Marketing: You earn a commission (usually 5% to 50%) per sale or lead.
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Dropshipping: You set your own prices and earn the profit margin between the supplier’s price and your retail price.
2. Control Over Products
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Affiliate Marketing: You promote products made by others and have no control over pricing, quality, or availability.
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Dropshipping: You control your pricing and branding, but you’re still dependent on suppliers for inventory and shipping.
3. Customer Relationship
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Affiliate Marketing: The vendor owns the customer. You don’t handle support, returns, or emails.
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Dropshipping: You manage customer service, refunds, complaints, and brand experience.
4. Startup Costs
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Affiliate Marketing: Lower startup cost — you only need a content platform (blog, YouTube, email list, etc.).
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Dropshipping: Higher cost — you need to build and manage an eCommerce store, pay for apps, and possibly invest in ads.
5. Scalability
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Affiliate Marketing: Easily scalable with content, SEO, and email automation.
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Dropshipping: Scalability depends on product selection, logistics, and customer support.
Pros and Cons
Affiliate Marketing
Pros:
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Low to zero startup cost
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No inventory or shipping
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No customer service
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Passive income potential through SEO and evergreen content
Cons:
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Lower control over pricing and product
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Commission rates vary and can be reduced
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You don’t build your own customer list
Dropshipping
Pros:
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Higher profit margins (you control pricing)
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You build a branded store and customer list
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Opportunity to grow into full-scale eCommerce
Cons:
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Must handle customer service
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Longer shipping times (especially with overseas suppliers)
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Higher risk of chargebacks and refunds
Which Is Better for Beginners?
It depends on your strengths and goals:
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If you’re good at content creation (blogging, SEO, videos), affiliate marketing is a great starting point.
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If you prefer building a store and want full control over pricing and branding, dropshipping might be better — but it comes with more responsibility.
Some entrepreneurs even combine both models: running a dropshipping store while also earning affiliate commissions from related products or services.
Final Thoughts
Both affiliate marketing and dropshipping are viable ways to build an online business in 2025. There is no one-size-fits-all answer — the right choice depends on how much control, effort, and risk you’re willing to take on.
Affiliate marketing is more passive and easier to start, while dropshipping offers more profit control but requires more involvement.
Whichever you choose, focus on providing value, building trust, and learning continuously — and you’ll be on the right path.