Ghost Commerce VS Affiliate Marketing: Key Differences

Ghost Commerce vs Affiliate Marketing: which is better for beginners in the vast world of e-commerce? The answer isn’t that simple—but it’s not complicated either! Let’s clear up some doubts so you can learn everything you need to make the right decision as a seller.

With every step in digital commerce, new questions and alternatives arise, making us think about the many ways we can boost our online sales. Affiliate marketing and ghost commerce are among the best! Join us as we explore their similarities and differences.

Ghost Commerce VS Affiliate Marketing: Overview

Affiliate Marketing Characteristics

Let’s break it down!

We assume you’ve already asked yourself, what is ghost commerce, and found the answer. But what about affiliate marketing? First, affiliate marketing is a business model where a person, known as the affiliate, promotes third-party products or services in exchange for a commission for each sale or action generated through their link.

We must register in an affiliate program and get a unique link to implement an affiliate marketing model. Our task will then be to promote specific products or services through various channels, such as blogs, social media, videos, email marketing, and more.

Every time a potential customer clicks on the link—whether to make a purchase or perform another action, such as subscribing—we, as affiliates, earn a commission. Affiliate marketing is based on performance, meaning commissions are only paid if a specific sale or action occurs. This makes it a beneficial model for both companies and affiliates.

According to Statista, in 2023, affiliate marketing spending in the United States stood at 9.56 billion U.S. dollars. The source projected it would increase to 10.72 billion in 2024 and roughly 12 billion in 2025. This shows us that affiliate marketing is a continuously growing model that enjoys market trust, solidifying itself as a viable and popular option for those looking to achieve profitable sales in digital commerce.

Let’s explore some of the critical advantages of this model: 

Performance-Based

Affiliates earn compensation only when they successfully drive a sale, lead, or desired action. This alignment ensures both affiliates and merchants share common goals, as they benefit only when they achieve results. Merchants minimize risks by paying solely for tangible outcomes, while affiliates stay motivated to optimize their strategies for better performance. This dynamic creates a sustainable and appealing model for both sides.

Scalability

The affiliate marketing model is highly scalable because merchants can partner with as many affiliates as they want without the overhead of managing a large team. Similarly, affiliates can promote multiple products or services across different niches, expanding their sales potential without being tied to a single brand.

Diverse Affiliate Ecosystem

The affiliate ecosystem includes individuals, bloggers, niche influencers, and large media companies and publishers. This variety ensures merchants can reach different audiences through multiple channels, such as social media, newsletters, review websites, or content platforms. It also allows affiliates to choose the niche that resonates best with their audience, increasing the chances of engagement and conversion.

Commission Structure

Affiliate marketing offers flexible commission models, such as pay-per-sale (PPS), pay-per-click (PPC), pay-per-lead (PPL), revenue share, or tiered commissions. This flexibility benefits affiliates and merchants, as they can choose the structure that aligns with their business goals. For example, merchants focused on driving traffic might opt for PPC, while those prioritizing conversions might prefer PPS. Tiered commissions also incentivize long-term partnerships, encouraging affiliates to generate consistent results.

Low Start-Up Costs

One of the standout features of affiliate marketing is the minimal investment required. Affiliates don’t need to develop or maintain products, manage inventory, or handle customer service. This makes it an accessible model, especially for beginners, who can focus entirely on creating organic content and marketing strategies.

Flexibility

In line with the previous point, affiliate marketing offers great freedom when choosing the products or services to promote and the strategies to implement. Whether you prefer writing product reviews, making YouTube videos, or running paid ads, you can tailor your approach to match your strengths and audience preferences. Plus, you can do this work from anywhere worldwide with an internet connection.

What Is Ghost Commerce?

To understand ghost commerce, we must be clear that it is a business model entirely different from traditional ventures. Why? When approaching ghost commerce, we save on the expenses and logistics associated with renting a physical location for our store or purchasing large quantities of products wholesale to maintain stock.

In a ghost commerce business, we are simply a middleman between a supplier who stores and ships the products and a potential buyer who obtains the desired item or service through us. Our task is to connect people with the products the supplier offers, earning a profit. We must plan appropriate marketing strategies to reach our ideal audience.

Our success will largely depend on how we differentiate ourselves from the competition, whether through the niche or products we choose to distribute or the strategies we implement. We must take advantage of this business model’s low risk and flexibility to focus on different ways to grow our store.

Here are some of the main advantages of ghost commerce:

• Low Startup Cost: As previously mentioned, ghost commerce models like dropshipping require a smaller initial investment than traditional businesses since we don’t have to buy inventory upfront. This aspect makes it more feasible for entrepreneurs with limited funds to launch their ventures.
• Reduced Risk: Low initial investment significantly lowers the business’s risk. We no longer have to worry about being stuck with unsold products, allowing us to adapt our offerings based on market demand without facing financial losses.
• Location Flexibility: Ghost commerce businesses can be managed anywhere with internet access. This flexibility enables entrepreneurs to work from home, travel, or choose any location that fits their lifestyle, improving their work-life balance.
• Wide Product Selection: Without the constraints of physical inventory, we can provide a diverse range of products. This capability allows us to explore different niches without a financial commitment and adapt to market trends.
• Scalability: Ghost commerce or dropshipping enables us to scale our operations as order volume grows rapidly. We can easily add or modify products without the hassle of storage space or managing inventory.

Types Of Ghost Commerce

Ghost commerce itself encompasses several sub-categories that share the main characteristics of this business model. To be precise, affiliate marketing is a type of ghost commerce, as it retains the essence of generating income without having to follow the steps involved in a traditional business. 

We have already discussed its main advantages and details above. But what other ghost commerce models are popular? Let’s take a look!

Dropshipping

Dropshipping is the flagship of ghost commerce; in fact, it’s common to think they are precisely the same since dropshipping captures the essence of ghost commerce.

In a dropshipping business, the customer purchases from our online store, and we forward that order to the supplier, who then delivers the product to the buyer. We serve as the link and must assess the right strategies to reach the ideal customer and retain them once they become our clients.

Dropshipping is the most popular form of ghost commerce due to its flexibility, low risk, and minimal initial investment. Additionally, it allows for rapid scalability by enabling us to offer a wide variety of products across different categories.

Key Features:

•  No Inventory Management: One of the main advantages of dropshipping is that we don’t need to stock products. Suppliers take care of warehousing, so we can focus on marketing and customer acquisition without worrying about storage or logistics.
• Low Initial Investment: Since we don’t need to buy products upfront, dropshipping reduces the financial risks associated with traditional retail. Entrepreneurs can launch their stores with minimal capital and invest more in growing their brands.
• Wide Product Range: Dropshipping allows us to offer a diverse selection of products from various niches without needing to store them ourselves. This flexibility makes it easier to test different product categories and adapt to changing market trends.

Wholesaling

Wholesaling involves purchasing products in bulk from manufacturers or distributors at a discounted price and selling them to retailers or consumers. This model acts as a bridge between producers and the retail market, facilitating the distribution of goods.

While this model requires a higher investment in inventory, it can yield more significant profit margins when appropriately managed. Wholesalers play a crucial role in ensuring that products are readily available.

Key Features:

• Bulk Purchasing: As wholesalers, we acquire large quantities of products, enabling us to benefit from lower prices per unit. This volume purchasing can lead to significant savings, which we can pass on to retailers or consumers.
• Inventory Management: Unlike ghost commerce models that avoid handling inventory, wholesalers must oversee stock levels, which introduces more risk. Effective inventory management is essential to prevent overstocking or stockouts.
• Distribution Focus: Wholesalers’ primary role is to distribute products, often serving as intermediaries between manufacturers and retailers. They may also provide additional services to clients, such as storage, logistics, and marketing support.

White Labeling

White labeling involves acquiring products from a manufacturer and rebranding them under your label. This allows us to offer products without investing in production or development, making it an appealing option for entrepreneurs aiming to enter a market swiftly.

Key Features:

• Rebranding: We can personalize the product’s branding and packaging to align with our business identity. This can include logo design, color schemes, and packaging styles that resonate with our target audience.
• Focus on Marketing: We can concentrate on marketing and sales instead of product development, allowing us to leverage existing products while establishing a unique brand presence.
• Scalability: White labeling enables rapid scaling, as businesses can introduce multiple products without the complexities of production. This flexibility allows us to respond to market trends and consumer demands quickly.

Print On Demand 

Print-on-demand is a business model in which products are only manufactured when a customer orders them. Typically, merchants collaborate with suppliers who handle printing, packaging, and shipping. 

This model eliminates the need for pre-printed inventory and allows businesses to offer custom designs on various products, such as apparel, accessories, and home decor.

Key Features:

• No Upfront Inventory: Like dropshipping, POD eliminates the need to store products in advance. Products are created on demand, meaning we only produce what is sold, reducing waste and upfront costs.
• Customization Opportunities: POD allows us to sell unique products with personalized designs, such as custom t-shirts, mugs, or posters. This allows us to build a brand that resonates with niche audiences through creative designs.
• Low Financial Risk: Since products are only printed when ordered, there is minimal financial risk. We don’t need to invest in bulk inventory, reducing the chance of unsold stock.

Easy Guide To Start A Ghost Commerce

Now that you understand ghost commerce and how to differentiate it from affiliate marketing, you’re probably wondering how to start your own ghost commerce business from scratch. Whether you pursue affiliate marketing, dropshipping, or any other models, these key points will help you get started on the right foot!

These are the essential steps for anyone venturing into ghost commerce. For a more detailed, step-by-step breakdown, we recommend checking out our full guide!

Select A Niche & Find Winning Products

Naturally, not all products and niches require the same strategies. When starting, choosing a niche—a specific audience segment with particular demands—is crucial. This choice will shape many of our strategy, depending on the target audience we want to reach.

Once the niche is defined, we’ll have a wide range of products to explore within that field. We must be careful, as some products are more profitable than others and will significantly impact our sales. Focusing on top-ranked product categories on platforms like Amazon is always a good idea.

Beginner’s Tip: Need some help? Try the Hand-picked products hub from AutoDS, where you can find a curated and up-to-date list of profitable products.

Choose A Supplier

The success of our ghost commerce business depends mainly on partnering with the right supplier. Keep in mind that the supplier will handle product delivery to customers, so if there are any issues with quality, shipping speed, or return policies, our brand will suffer—and so will our sales.

There are several ways to find reliable suppliers. AutoDS offers access to a variety of supported and private suppliers, such as AliExpress, Amazon, Shopify, and DHGate.

Before finalizing your choice, it’s always advisable to order sample products. This way, you can test the product quality, delivery times, and the overall shipping process to ensure everything meets your expectations.

Pick A Selling Platform

After selecting a reliable supplier and choosing our niche, it’s time to decide which platform to use to manage our business and connect with our audience. This means selecting a selling channel. Generally, there are two main types:

• Marketplaces: These offer limited customization options but provide access to high levels of organic traffic (like Amazon or eBay).
• Customizable eCommerce Sites: These platforms give us more freedom to control the design and functionality of our store (like Shopify or WooCommerce).

Building a store isn’t complicated, but it involves making several decisions and requires some experience with design, coding, or external professional help.

Beginner’s Tip: We can take advantage of automation by using AI tools, such as this AI Shopify store in less than 2 minutes feature! 

Import Products To Your Store

With your store ready, the next step is to import products so your customers can start shopping. This can be done either manually or automatically.

If we choose the manual method, we’ll need to download product information, search for images, upload them to the store, and complete several small tasks to get everything set up. This process can be time-consuming and tedious.

On the other hand, automating this process offers the advantage of freeing up time to focus on other aspects of our store. With the AutoDS Product Importer, you can import multiple products by copying their links! Automation is always ready to lend a hand and help grow your business.

Run Creative Marketing Campaigns

Now that our products are available in the store, it’s time to spread the word and bring traffic to our site. This is where marketing comes into play—one of the most exciting aspects of running a ghost commerce business. Using the right strategies, we can attract our ideal customers, spark interest in our products, and increase sales.

Creative campaigns are among the best ways to promote a ghost commerce store. We must think outside the box and find fun, engaging ways to connect with our audience. To achieve this, we can explore various platforms and marketing techniques, such as:

• Influencers: Partnering with influencers aligned with our niche helps us reach a broader audience and build trust. They can review, promote, or showcase our products in real-life scenarios.
• Paid Ads: Advertising on platforms like Facebook, Instagram, or Google allows us to target specific audiences based on interests and behavior. Testing different ad types helps identify what works best for our business.
• Email Marketing: Building an email list keeps us connected with customers, sharing product updates, promotions, and exclusive offers. It’s an effective way to foster loyalty and drive repeat purchases.

Fulfill Your Orders Quickly

Quick order fulfillment is essential. We should process orders as soon as they arrive to keep customers satisfied, build trust, and encourage repeat purchases.

A satisfied customer returns to our store, builds loyalty, leaves positive reviews, and spreads word-of-mouth about our business. On the other hand, a customer who encounters obstacles during the buying process will likely turn to the competition.

Of course, if we handle everything manually, we might miss some details. Automation can help us avoid that, too. AutoDS offers a feature that automates the entire order fulfillment process, eliminating the need to manage each order manually.

Beginner’s Tip: Remember, you can try all our features risk-free with our 14-day trial for $1!

Provide Excellent Customer Support

Customer support is critical to success in ghost commerce. Addressing questions or concerns promptly helps build trust and turn one-time buyers into loyal customers.

The quicker we address customer concerns, the more satisfied they’ll feel. Maintaining a friendly and empathetic tone in our interactions is equally important. Even when a customer is frustrated, handling the situation with patience and a helpful attitude can make a big difference in reaching a favorable resolution.

Here are some things we recommend keeping in mind:

• Always respond in a friendly manner.
• Make sure both you and your suppliers have clear return and refund policies.
• A well-organized FAQ section is always helpful.
• Requesting customer feedback is valuable to understand what’s working and needs improvement.

Ghost Commerce VS Affiliate Marketing: Compare Profitability 

Now that we’ve covered both models’ key features and benefits, who comes out on top in the ghost commerce vs affiliate marketing showdown? Of course, the answer isn’t straightforward, as it largely depends on your preferences and business goals. However, in most cases, considering various aspects, ghost commerce tends to offer higher profit margins and greater control. This is due to the following factors:

• Pricing Flexibility: With ghost commerce, we set our prices. We purchase products at wholesale rates and sell them at a higher retail price, keeping the profit margin. This flexibility allows us to optimize our earnings. In affiliate marketing, commissions are determined by the merchant and may not be as profitable.
• Higher Revenue Potential: If we make a ghost commerce store, we can benefit from selling directly to customers at total retail prices, keeping the difference between the sale price and product cost. On the other hand, affiliate marketers earn a commission, typically a smaller fraction of the product’s value.
• Branding and Customer Loyalty: Ghost commerce allows us to build a brand and grow a loyal customer base. Customers purchasing from our store are more likely to return, increasing long-term sales. In affiliate marketing, customer loyalty is more challenging to achieve, as buyers purchase directly from the merchant instead of us.

Ghost commerce offers higher profitability than affiliate marketing by eliminating commission splits and enabling complete control over pricing and margins.

Frequently Asked Questions 

Can You Really Make Money With Ghost Commerce? And With Affiliate Marketing?

Yes, both models can generate income. Ghost commerce offers higher profit margins, while affiliate marketing provides more passive income opportunities. Success depends on strategy, consistency, and effort.

Is Ghost Commerce Legit?

Yes, ghost commerce is a legitimate business model. Many entrepreneurs use it to build online businesses through dropshipping, POD, and other strategies. Like any business, it requires planning and commitment.

Is It Easier To Start A Dropshipping Or An Affiliate Marketing Business?

Affiliate marketing is often easier to begin due to lower startup costs and fewer logistics. Dropshipping involves more setup but offers greater control over branding and profits. Both require effort to succeed.

Is Ghost Commerce The Same As Dropshipping?

No, ghost commerce is a broader concept that includes dropshipping as one of its models. It also covers affiliate marketing, print-on-demand, and other strategies. Dropshipping focuses specifically on selling products without holding inventory.

Conclusion

So far, we’ve covered the basics you need to draw your conclusions when comparing ghost commerce vs affiliate marketing. Both models share similarities that place them within the same framework but differ in specific aspects.

With this information, it will likely be more accessible to choose the one that best aligns with your goals and current situation. To further explore the world of e-commerce, we recommend checking out the following articles:

• The Best E-Commerce Growth Strategy Tips To Maximize Sales
• TikTok Dropshipping Products: Top Picks For TikTok Shop
• Try An AI Store Builder To Kickstart Your Business!