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Blogging Vs. Dropshipping: Which Business Model Is Better in 2021

If you’re debating the online business models of blogging vs. dropshipping then this post is for you!

My wife and I make a living from blogging. 

And although I have never started a dropshipping business, I studied them closely back when I was debating which online business model to pursue. 

Before I get started, here’s a quick refresher on how these two business models differ:

A blog is a content-driven website typically revolving around the written word as its primary information medium.  

Blogs can monetize in any number of ways but usually do so with ads, information products, or subscriptions. 

A dropshipping website sells a physical product manufactured by a third-party that also handles order fulfillment. 

Both businesses are popular in today’s growing online economy but their business models are very different. 

Let’s take a look at some qualities of each of these business models to see which is best for you.

Startup Cost

Startup costs are an important factor when considering any business to pursue. 

Thankfully, starting an online business doesn’t need to be expensive. 

In fact, it can be nearly free.

You can buy a domain name for $1 in your first year and ~$15 per year thereafter. 

And you can have free web hosting, though usually, bloggers pay $3-$8 per month from a company like Bluehost. 

That’s all you need to set up a blog. 

The startup costs to set up an online store to dropship can be the same as setting up a blog. 

However, if you want to use a popular dropshipping platform like Shopify which handles web hosting and makes the dropshipping process very smooth, your monthly cost will be ~$30. 

Blogging Vs. Dropshipping Startup Cost Winner: Tie

Required Skillsets

Bloggers usually require the following to succeed: 

  • Patience: It takes years for most bloggers to make any money, let alone a full-time income. For instance, my wife and I hit $3,000 per month in advertising income from her travel blog in December of 2020, and we started the blog in April of 2017. 
  • SEO Knowledge: SEO stands for search engine optimization. If you’re blogging, you most likely want to focus on getting traffic from search engines, and SEO is the study of how to do that. 
  • The Ability to Create Content Prolifically: Most bloggers need to create a high volume of content before they get much traction. Be prepared to write 100+ blog posts before you really start getting traffic (and earning income). 

On the other hand, dropshippers typically require the following to succeed: 

  • The Ability to Validate and Source a Product: You want to sell a product with proven demand, and you need to find a manufacturer for this product that also does order fulfillment. 
  • Knowledge of Paid Advertising: You need to get visitors to your site somehow, and dropshippers typically use paid advertising to acquire visitors and customers. So you’ll need to learn how to run successful paid advertising campaigns, whether that’s on Facebook or elsewhere. 
  • Capital: Because dropshippers typically use paid advertising to obtain traffic, you’ll need some money to pay for that advertising.  

Blogging Vs. Dropshipping Required Skillset Winner: Tie. It just depends on what your skills are. 

Moat

If you don’t know what a moat is in the context of business, don’t worry. 

The idea is simple. 

Moats are important in any business model including blogging and dropshipping. 

Why?

You want to build a business with a strong moat that generates profit for as long as possible. 

And building a moat is easier to do with some business models than it is with others. 

In the context of blogging and dropshipping, you can more easily build a moat blogging than you can dropshipping. 

How do I know this? 

A simple way to test how easy it is to build a moat with a given business model is to think through how easily a competitor could build the same business. 

The more easily a competitor could build a similar business, the less likely it is that you have a good moat. 

For instance, say you build a successful blog with 100 well-researched articles that are on the first page of Google for all of their respective keywords. 

Theoretically, a competitor would need to write 100 higher-quality articles and outrank you for all of those keywords (which could take years). 

If you know much about SEO, you know how challenging this can be. 

On the other hand, imagine you have a dropshipping business selling widgets. 

Because of your success, someone else sets up a similar web store, finds your manufacturer for widgets, and starts selling your exact same product on their web store at a slightly lower price. 

As you can probably tell from this example, setting up a competing dropshipping company is usually easier than competing with another blog. 

Thus, building a moat is typically easier with a blog than with a dropshipping business. 

Blogging Vs. Dropshipping Moat Winner: Blog

Profit Margin

The profit margin of a business refers to the percentage of income the company keeps as profit. 

It’s usually easiest to think of business terms like this one in the context of an example. 

Unfortunately, dropshipping is a low margin business. 

Even Shopify, one of the most popular dropshipping platforms, acknowledges that dropshipping is a low margin business. 

How low? 

According to billda.com, dropshipping margins are around 15%-20%. 

That means if your dropshipping business generates $100,000 in sales, your business’s profit is likely going to be around $15,000 to $20,000.  

Why do dropshipping businesses have low margins? 

Typically, dropshippers have high website traffic acquisition costs because they rely on paid advertising to get traffic. 

Also, dropshippers need to pay the wholesale cost of whatever product they’re selling. 

On the other hand, as Sam at the Financial Samurai notes (and as I’ve experienced personally with my blogs), blogging margins are often between 70% and 90%! 

How can blogging margins be so high? 

Most bloggers rely on organic traffic sources for their blog. 

As a result, they often don’t have any traffic acquisition costs. 

Plus, monetizing with ads doesn’t have any costs associated with it. 

So if your blog generates $100,000 in income, you could very well take home $70,000 – $90,000 or more in profit! 

In short, blogging is almost always a higher margin business than dropshipping. 

Blogging Vs. Dropshipping Margin Winner: Blog

Business Value

Building a successful business, whether that’s through blogging or dropshipping, is almost certainly going to take a lot of time and effort. 

So naturally, you want to put that time and effort into building the highest value business you can. 

Usually, higher-value businesses have great margins and strong moats. 

For evidence of this, check out the online businesses for sale on Flippa

Flippa is a website where you can buy and sell all sorts of online businesses, from apps and domains to blogs and e-commerce dropshipping websites. 

In fact, on Flippa you can filter online businesses for sale by whether they are dropshipping businesses or content-driven businesses like blogs.

One thing I’ve noticed as I’ve looked at business listings on Flippa is that:

blogs usually sell for more than dropshipping businesses earning equal net income.

Why are blogs often higher-value businesses than dropshipping websites? 

Because, as I’ve mentioned, they tend to have better margins as a result of lower operating costs and stronger moats. 

Even if you have no plans to ever sell your blog or dropshipping business, it’s nice to have that option.

And if you ever do sell, know that you will likely get a better price for your blog than for your dropshipping company. 

Blogging Vs. Dropshipping Business Value Winner: Blog

Conclusion

As you can probably tell, I think blogging is a better business model than dropshipping. 

But it’s not just me. 

I genuinely believe the data supports the idea that blogging is a superior business model, and I hope I’ve conveyed that in this post. 

That said, you can still succeed if you want to build a dropshipping business. 

And ultimately, I believe you stack the odds of business success in your favor most effectively by pursuing whichever business model you are most excited about and willing to put in the work for. 

If that’s dropshipping, then go for it! 

Let me know in the comments which business model you think is better for you and why. 

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