Business International business

Affiliate marketing vs dropshipping: The complete guide

Saim Jalees

23.09.25 (last updated)

Read time 7 minutes

Affiliate marketing and dropshipping are among the most popular methods to make money online - but which one could be a better option for you?

In this guide, we’ll compare dropshipping and affiliate marketing head-to-head, looking at everything from the effort required to launch a business within each model to the pros and cons of each.

We’ll also explain how Wise Business solves two of the biggest challenges in affiliate marketing and dropshipping: getting paid in multiple currencies and paying international suppliers.

Dropshipping vs affiliate marketing: Key differences

	Affiliate Marketing	Dropshipping
What it entails	Promote and recommend other companies' products for a commission.	Sell products directly to customers, with a third-party handling inventory and shipping.
Setup and launch	Simple and quick to launch if you have an existing audience (blog, social media, etc.).	Takes longer to set up as it requires building an online store and finding suppliers.
Upfront costs	Very low. Main costs are typically for website hosting and content creation tools.	Low compared to traditional retail, but requires setting up an e-commerce platform.
Content requirements	Heavily reliant on creating high-quality content (reviews, blog posts, videos) to attract and engage an audience.	Content is not the primary focus; marketing efforts are geared towards driving traffic to the online store.
Customer service requirements	No direct customer service responsibility. The merchant handles all customer interactions post-sale.	Directly responsible for handling all customer service, including inquiries, shipping issues, and returns.
Profit model	Earn a commission (a percentage of the sale) for each purchase made through your affiliate link.	Profit is the difference between the supplier's price and your retail price. You set your own prices.
Income potential	Can build long-term, passive income as content continues to attract an audience over time. Commission rates are set by the merchant.	Can be profitable more quickly with higher margins per sale, but requires effective marketing and trend-spotting.
Risk	Low financial risk. No investment in product development or inventory. Income can be unstable if affiliate programs change.	Minimal financial risk as you don't buy inventory upfront. Risk lies in finding reliable suppliers and managing customer satisfaction.
Control	Little control over the product, pricing, or customer experience.	More control over product selection, pricing, and branding, but less control over shipping and product quality.

What is affiliate marketing?

Affiliate marketing lets you earn commissions by promoting another company’s products or services.

You share a special tracking link with your audience, and if someone makes a purchase through it, you get paid by the company you’re affiliated with.

Some companies also offer an incentive for customers who click through to a seller’s website even if they don’t buy (known as pay per lead or pay per click).

The global affiliate marketing industry is on track to reach around £25 billion by 2031.¹

An example of affiliate marketing in action:
You have a travel blog where you write about backpacks. As an affiliate marketer, you might write a post about the best backpacks that includes an affiliate link for each product from multiple backpack manufacturers.

If the reader clicks through one of those links and makes a purchase from the company, you get a percentage of the sale, kind of like a referral fee.

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What is dropshipping?

Dropshipping, also known as digital dropshipping, is when you ship products directly to consumers from your supplier, without ever holding stock.

You set up a digital shop to facilitate transactions, but the stock is dropped at the customer’s address directly by the supplier through a courier.

This market too is growing and is projected to reach $1,253.79 billion USD (about £990 billion GBP) by 2030.²

An example of dropshipping in action:
You sell backpacks through an online shop. Your website allows customers to browse your collection of backpacks, add items to their cart, pay, and check out.

If someone buys a backpack, they are actually purchasing it directly from the wholesaler, who then ships it directly to the customer. You just facilitate the transaction, without storing or shipping anything yourself.

Your profit is the margin you bake into the price. This could be UK dropshipping suppliers or foreign suppliers, such as those based in China.

The pros and cons of affiliate marketing

Attribute	✅❌	Explanation
Cost	Pro ✅	Affiliate marketing is a pretty simple way for you to monetise an existing content-based site, especially if you’re well-established.
Flexibility	Pro ✅	Because many businesses have affiliate programmes, you can promote products in a niche you’re already knowledgeable and passionate about. There’s usually some kind of affiliate programme for everyone and creative ways to cross varying niches.
Operations	Pro ✅	You’re not responsible for shipping, returns, or customer complaints. Your role is simply to recommend. Once someone clicks your link, the merchant handles everything.
Financial risk	Pro ✅	You don’t have to put up much money to get started with affiliate marketing, since you’re not investing in product development or inventory. The biggest outlays likely to come up are fees for website hosting and content creation tools.
Market conditions	Con ❌	Affiliate marketing has become a heavily saturated space. Even the most authoritative websites out there now use it as a revenue stream, and these can be tough competition for bringing in an audience.
Legal and compliance	Con ❌	Some industries can be heavily regulated, so you need to make sure you’re following the laws and regulations specific to that industry. With financial products, for example, you need to be clear that you’re not providing financial advice.
Income stability	Con ❌	Your income depends on the affiliate programmes you join. If a company decides to suddenly lower its commission rates (or shut down the programme altogether), your revenue can drop overnight without warning.

The pros and cons of dropshipping

Attribute	✅❌	Explanation
Cost	Pro ✅	Compared to traditional businesses, dropshipping comes with minimal financial risk. You don’t have to buy any inventory upfront, and if a product doesn’t sell, you’re not stuck with unsold stock.
Operations and setup	Pro ✅	Setting up an online shop is fairly simple these days, thanks to ecommerce platforms that make this work easy for sellers. Your website can be set up pretty quickly once you’ve sourced your products.
Scalability	Pro ✅	When done right, dropshipping can scale quickly. Factors like warehouse space or logistics don’t hold you back, so if you decide to add new products or suddenly get an influx of new orders, scaling up will be a lot easier than in traditional retail.
Market conditions	Con ❌	Like affiliate marketing, dropshipping is a heavily saturated space. You may have to spend a lot of time and effort finding unique products that will set your shop apart. You may also have to compete with other sellers on price, which can shrink your margins.
Logistics	Con ❌	Finding quality yet affordable manufacturers can be difficult. Moreover, if you decide to test products before committing to selling them, the vetting process can take time and eat into your budget. Shipping distance and time can also become an issue.
Customer Service	Con ❌	Because your suppliers handle fulfillment, you have little control over customer service issues like packaging and shipping. Shoppers may complain directly to you about slow deliveries or poor quality, holding you responsible, but you won’t always be able to fix the issues directly.

How long does it take to make money online using dropshipping?

With a compelling product and an effective ad campaign, it's possible to make your first sale within a few days to a week of launching a dropshipping business.

However, if you set your prices too high-and other sellers are offering the same or similar items at a lower cost - customers will likely buy elsewhere, delaying profitability.

The bigger challenge is achieving consistent profitability. In 2025, competition is fierce, and to succeed, you need to be able to anticipate customer needs and wants early, then get related products in front of buyers before other sellers do.

That means if you’re great at spotting trends and have the marketing know-how, dropshipping can scale fast.

But "fast" is relative. While an initial sale can happen quickly, turning that into a reliable income stream takes time.

You should expect it to take between 3 and 6 months of consistent effort-testing products, refining ads, and managing customer service-to build a dependably profitable store.

If you end up offering products that many other sellers are also pushing, you’ll face tough competition and thin margins, which can extend this timeline.

How long does it take to make money online using affiliate marketing?

You can usually earn your first commission within 1 to 3 months of publishing high-quality content. However, building an audience large enough to generate a meaningful, consistent income often takes 12 to 24 months or more of dedicated work.

With affiliate marketing, commissions are decided by the supplier and are usually smaller, ranging from the low single digits to double digits. No one sale is likely to give you a big lift in your income. Instead, success is built on a foundation of trust and volume over a longer period.

The magic comes once you’ve built an audience and gained their trust, but this is the most time-consuming part of the process.

At this point, your sales can tick along almost passively. For instance, a video you post today could still earn you commissions years from now if it’s evergreen content that keeps drawing people in.

Of course, building an audience in 2025 is no small feat. The influencer space is crowded, and it takes creative chops to stand out.

If you genuinely enjoy creating content that helps people make decisions, affiliate marketing can be a natural fit. This could take many forms, from writing in-depth product reviews and 'best of' listicles on a blog, to filming tutorial videos for YouTube.

The key is that the content provides real value. If the thought of consistent content creation feels like a chore, this path will be a constant uphill battle, making that 1-2 year timeline feel even longer.

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The verdict

Affiliate marketing suits those who excel at building an audience, writing, making videos, and establishing themselves as a trusted voice in a specific niche. With affiliate marketing, your business is your brand and the content you create is your money-maker.

In contrast, dropshipping suits those whose talents lie in spotting trends, marketing products, optimising online stores, and managing customer service. With dropshipping, you curate a collection of products and build a retail brand.

Tip: Many people blend the two, using affiliate marketing content to drive traffic to a dropshipping store that sells related products.

Manage your international business earnings with Wise

Whether you go with affiliate marketing or dropshipping, chances are, your business will connect you with suppliers and customers around the world.

One place online entrepreneurs often lose money is in payment processing. With dropshipping in particular, international transactions are the norm. And for affiliate marketers, commission payouts often come from companies abroad. If you’re not careful, high foreign exchange fees can eat into your margins fast.

A Wise Business account helps you keep more of what you earn. You’ll get the mid-market exchange rate - no markups, no hidden fees. That can save you up to 3x compared to other providers.

Plus, you’ll be able to send money to 40+ currencies and get paid with local account details in 8+ countries.

Keep more of what you earn through dropshipping or affiliate marketing with Wise Business.

FAQs

Is affiliate marketing legit in the UK?

Yes. Affiliate marketing is a genuine, regulated business model in the UK. Major brands and thousands of UK bloggers, influencers, and publishers participate in these programmes.

To stay compliant, you need to follow the regulations set by the UK’s Advertising Standards Authority (ASA). That includes clearly labelling affiliate links and avoiding misleading claims.

Is dropshipping legal in the UK?

Dropshipping is very much legal in the UK. As with any other business, you should follow UK laws that require you to be transparent with your customers about your policies.

You should also work with trusted suppliers that uphold customer rights. Issues can come up if you use unreliable suppliers or fail to give customers the protections they’re entitled to under UK law.

Sources:

Sources last checked on September 22nd, 2025

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