Dropshipping vs Network Marketing Are They Similar Business?

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Dropshipping and network marketing are two potential income streams that involve selling products. Although the processes of both are very different, they all involve selling products and using communication skills in order to gain more customers and increase profit. You may be able to do both, so we’ll compare them to help you decide which route to take.

Definition and business process

Dropshipping simply means working with a supplier (called drop shipper) to fulfill your inventory and delivery obligations. Your online store remains under your control and management, but the drop shipper has full access to the products you sell. They will simply forward any orders they receive to you, and take care of everything until the package arrives at your customers’ door.

Network marketing, which involves licensed distributors, relies on these connections and their marketing skills to sell products. This involves paying a membership fee as well as an upfront purchase of products. These products can then be sold to distributors by themselves, their friends, family, and any other contacts. Some companies offer programs that allow distributors to recruit others to sell the products. This creates a whole network with uplines and downlines.

The Cost

Dropshipping is a low-cost way to get your products and services. Dropshipping subscription fees range from $25 to $50, and website fees range between $10 to $20. You don’t need to purchase the items upfront. Instead, you pay them after you receive an order from customers. Since they have already paid you, you have the funds to pay the dropshipper.

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Network marketing companies require that you purchase a set number of products in order to start selling them. You can choose to purchase multiple products or a complete package with different product varieties. This offers you the opportunity to offer products at a lower price and receive a thoughtful discount.

Set the price

These two things are very similar. You must base your prices on the information you receive from drop shippers when you are a partner. They shouldn’t be too low or your profit margins could suffer. You also shouldn’t make them too high, as customers may choose to shop elsewhere for lower prices.

Pricing is important. Network marketing offers a significant discount when you purchase products from them. This allows you to set your price competitively. Although you have the right to set your own prices, you must use the suggested prices to make sure you don’t lose customers and make a profit.

The Effort

Dropshipping is a great way to make extra income if you have a full-time job. It doesn’t take much time or effort. After you’ve chosen the products you want to sell and you have your online shop up and running, you can simply forward the orders to drop shippers. They will take care of everything else. Focus on your job or spend time creating marketing materials that will attract more customers and visitors to your shop.

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The same applies to network marketing but you will need to put more effort into selling. Dropshipping is where you can access your online store 24/7. In drop shipping, you have to talk to people in person to convince them to purchase the product. Selling products to coworkers may be something you have to do when you’re not on duty. Some companies prohibit this from employees. You can likely focus more on selling the products if you don’t have a job. This will allow you to make more sales.

Potential for additional income

Dropshipping is a way to sell products. Dropshipping allows you to offer many products, focus on niches that are hot or add seasonal items when they are in high demand. As you basically run a shop where customers order products, there is little opportunity to make additional income.

You can use network marketing to create additional income streams by establishing downlines. There are companies that offer distributors the chance to recruit new members and receive a bonus. It is possible to create multiple downlines that will help you generate more income. You can get a percentage of the sales from your downline depending on their program. In return, you will offer discounts to them when they replenish their stock with you. This is a win-win situation.

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Companies that place a lot of emphasis upon recruiting members and offer higher awards for product sales may be a red flag. These could be illegal pyramid schemes. Keep in mind that if a company is primarily funded by recruitment, it is most likely a pyramid scheme. You should steer clear of them.

The bottom line

Dropshipping is a great option if your time is limited. You can set up a website and partner with drop shippers to forward any orders to them for processing. Dropshipping is a great way to save time and money. You won’t need to spend more than $100. It is possible to focus more on marketing your shop, since you don’t have to deal with transactions directly.

Network marketing, on the other hand, relies heavily on your ability convince your contacts to purchase the products from your company, rather than buying them online or at the grocery store. Although the initial cost of network marketing can be high, you only have to pay the membership fee upfront and the products that you wish to sell. There are no additional fees to follow. This one is for you if you are a good communicator and have the ability to engage people in conversation.