This week we learned a lot about 2 different business models. One business model was drop shipping, which I had never heard of before, the other was affiliation.
Let's start with drop shipping. Drop shipping is a situation in which you offer the product for sale. However, you are not the one that keeps the inventory or ships the inventory you've effectively contracted out to another company to process your orders. (ish)
In some situations this would be an ideal solution, for example if you were selling a fashion accessory. The client would select what they wanted to purchase from your site, you would reach out to your drop ship contractor and pay the fee, and the drop shipper would in turn ship the item that was purchased from your site. However, one should know that if there are any issues where the client isn't happy with the product you are the one that is going to have to refund the money etc. So this is good for some situations, and not so great for others.
Then there is affiliation. Affiliation allows you to build a site such as a blog, informational, etc. Then you are "contracting" with a larger company (think Amazon) and place links to their items. The user simply clicks on the link on your page, is whisked away to your affiliates page and they purchase what they were wanting. In return for you funneling traffic to their site the affiliate gives you a "cut" (commission) for the sell.
The question is, what's really best? The answer isn't a straight one... It all depends on what type of site you are wanting to build. Do you want something that is a very traditional store front? Or are you looking for something with more creative license? The answer to both of those will determine which one is your best match. Creative license and freedom is more available via the affiliate program, while a traditional storefront would be quite reasonable to utilize drop shipping.
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