Direct comparison
Dropshipping vs Affiliate Marketing: Who Owes What
Dropshipping vs affiliate marketing by legal duty: the dropshipper is the seller under the FTC order rule; the affiliate must disclose paid links. Sourced.
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How do Dropshipping and Affiliate marketing compare side by side?
The table below compares Dropshipping and Affiliate marketing across 9 dimensions, from legal role to when to pick each.
Side-by-side comparison
| Dimension | Dropshipping | Affiliate marketing |
|---|---|---|
| Legal role | The seller. The FTC guide states that "the person soliciting the order, not the agent fulfilling it, is the seller under the Rule." | An endorser. It recommends a product and links to a merchant; in 16 CFR 255.5 Example 11 a blogger with affiliate links "receives a portion of the sale." |
| Who takes the customer's money | The dropshipper. The refund duty is framed as refunding "all the money the customer paid you." | The merchant that completes the sale; the affiliate is paid a share afterwards. |
| Shipping-time statements | You must have a reasonable basis for stating or implying that you can ship within a certain time. With no statement, you must have a reasonable basis for believing you can ship within 30 days. | Not an affiliate duty under the Rule; the shipment duties follow the seller, meaning the merchant that solicits the order. |
| If shipment is delayed | You must seek the customer's consent to the delayed shipment. | No consent duty arises for the affiliate under the Rule. |
| Refunds for unshipped goods | You must, without being asked, promptly refund all the money paid for unshipped merchandise, and refund the correct amount within seven working days after the order is cancelled. | No refund duty arises for the affiliate under the Rule; the merchant that took the order owes it. |
| Disclosing a paid relationship | This duty attaches to endorsements, not to selling as such. | A connection that might materially affect the weight or credibility of the endorsement, and is not reasonably expected by the audience, must be disclosed clearly and conspicuously. Material connections include monetary payment, free or discounted products, and the possibility of being paid. |
| Where a disclosure goes | No placement rule applies; the Rule's duties concern timing, consent and refunds. | With the endorsement message itself, where it is hard to miss. The FTC notes disclosures are likely to be missed if they appear only on an About Me or profile page. |
| Medical and lab supplies | Product, regulatory and supplier questions come with being the seller; see the CASRAI guide on drop shipping medical supplies and the role comparison for dropshippers, resellers and affiliates. | Health-product recommendations also fall under the FTC Endorsement Guides; see the CASRAI guides on medical supply affiliate programs and FTC endorsement rules for health products. |
| When to pick each | Pick it when you are ready to stand behind every order as the seller: shipping claims you can support, consent when orders slip, and prompt refunds. | Pick it when you want to recommend products without taking orders, and can disclose the relationship clearly and conspicuously each time. |
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Common questions
Common questions about Dropshipping vs Affiliate marketing
What is the difference between affiliate marketing vs dropshipping?
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In dropshipping you take the order and the payment, so you are the seller under the FTC Mail, Internet, or Telephone Order Merchandise Rule. In affiliate marketing you recommend a product and earn a share of a sale the merchant completes, and your main duty is to disclose the relationship clearly and conspicuously.
Who is the seller when a dropshipper's supplier ships the order?
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The dropshipper. The FTC guide states that the person soliciting the order, not the agent fulfilling it, is the seller under the Rule.
Do affiliate marketers have to disclose their links?
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Yes, where the connection is not reasonably expected by the audience and might materially affect the weight or credibility of the endorsement. 16 CFR 255.5 lists payment and the possibility of being paid as material connections, and Example 11 says a blogger's affiliate-link reviews should clearly and conspicuously disclose the compensation.
