Dropshipping: A Useful Alternative to Affiliate Links – By Alex Bugeja

by Jenae Reid on April 11, 2018

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Most readers are presumably familiar with traditional affiliate links, through which an affiliate earns commission for promoting a merchant when a transaction occurs on the merchant website. Tracking of such links is through means, such as a cookie placed on the customer’s computer when the link is clicked.

In this article we examine dropshipping, which offers an alternative to this traditional affiliate marketing flow, and which opens up a new set of possibilities to both affiliates and merchants.

In a dropshipping relationship, a merchant fulfills transactions driven by an affiliate without the identity of that merchant necessarily being revealed at any point – it is the affiliate that “owns” the customer and has full access to their data, rather than the merchant.

The merchant is generally furnished only with the required data, so as to fulfill the transaction on the affiliate’s behalf. Dropshipping is most commonly thought of in the ecommerce context: the customer purchases a product on the affiliate website, the affiliate sends the customer’s shipping address to the merchant, and the merchant then ships the product to the customer.

The affiliate normally sells the product at a price higher than the one the merchant charges them, with the difference being their profit.

Dropshipping is a natural extension of the repertoire of both affiliates and merchants, since it opens up new possibilities for both sides. Space prevents us from considering all possible benefits here but we will examine a couple of the more important ones.

As far as affiliates are concerned, owning customers provides full control. Keeping the customer on the affiliate site means that the affiliate can now do things such as engage in email marketing, retarget customers via cookies, follow up on abandoned shopping carts, work on further optimizing conversion rates, etc.

Dropshipping therefore generally allows affiliates to capture more dollars per customer than traditional affiliate marketing and is particularly useful for working with brands that have expertise in making and/or fulfilling products, but not in operating modern ecommerce stores. In such cases dropshipping allows a natural division of labor between affiliates performing customer-facing marketing and user interfacing, and merchants executing fulfillment logistics.

One obvious benefit of providing dropshipping to merchants is that it opens up a whole new class of possible partners as affiliates: online stores. Brands that previously were limited to working with traditional affiliates such as bloggers, social media influencers, coupon sites, etc. can also work with online stores and other websites that offer purchasing functionality of some kind with dropshipping.

Even if a merchant operates their own online store, allowing products to be listed on other stores besides their own can be highly beneficial. Those stores may have access to customers the merchant does not, or may offer functionality such as subscriptions, retargeting campaigns, etc. that the merchant site lacks.

In conclusion, merchants capable of providing dropshipping should probably give this technique serious consideration. Likewise affiliates capable of implementing web purchasing functionality should consider seeking out merchants that would be good dropshipping partners.

 

Alex Bugeja is the founder of ReferDigital.com, an affiliate network with specialized capabilities including dropshipping.

This article appeared in issue 42 of FeedFront Magazine, which was published in April 2018. https://issuu.com/affiliatesummit/docs/feedfront-42

 

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