The main difference is customers. Do you want to deal with them?
Option 1: Affiliate
You don’t have to worry about any problems related to customers. You keep the commission, and all you have to worry about is how to spend it.
Since, not dealing with customers frees up a lot of time, you could later find another market for other affiliate products/services.
Option 2: Drop Shipping
If there’s a problem with the product, you are the one they are going to call. That’s a drawback, that could seriously take up a lot of your time.
But, here’s a great advantage to Drop Shipping. You get the customer base. You get a list (if you are smart enough to assemble it) of prospects and customers.
This is a list of people with a common interest and you could easily contact them later (again, if you have the skills) with related products OR even affiliate products.
This is a great advantage, to Drop Shipping.
So, the question is. Do you feel that you are better finding markets for products? Then you go Affiliate..
If you feel customer service is you strong spot, and you feel passionate about the market/products? Then you go Drop Shipping
Say you are trying to build volume in a smaller target market instead of a mass affiliate program, and many of the individual products are not yet using affiliates, would it be a good idea to do half and half?
And for those who not yet offer affiliate and drop shipping, what’s a good way to approach it?
In this situation you are after a tight niche market. That’s good. Also, this market could need/want/demand several different kinds of ONE-product retailers; where most of them are not really adapted to the internet.
You should research your market.
If you have a good product, you should research the market.
Since the regular-retailers don’t seem to be up to speed, it becomes a little bit tricky. (It could be that the reason is that the retailers know that there is NO online market, OR it is a huge opportunity for you).
Here’s the trick. (you seem to be somewhat interested in the market) Develop an informational product related to the topic. Don’t sell it. Give it away, in exchange for their email adress. The info product could be an E-book, Audio, Special Report, Interview, a link collection, assembled articles.
This does 2 things, you get a way to contact them, and you build up credibility.
If you got credibility, you can affiliate, drop-ship, retail… whatever.
Next you need to get products to the customer. You persuade someone to create an affiliate program, or even drop-shipping…. But it won’t be worth the trouble, if they don’t understand.
So, what you can do.. Is to go to the company, and tell them you have x amount of people that might be interested in the product.
…Would they be interested in giving a x amount of commission (affiliate) to you, if you refer them to the store, through a specific campaign.
…Would they be interested in giving a x amount of discount(drop-ship) to you, if you order, and they were willing to ship it out separately to the customer, through a specific campaign.