Review sites against dropshipping

For a while the default answer to how do I sell online was dropshipping: a shop with no stock, products from a supplier, paid advertising to bring buyers. A lot of people have since moved to running review sites instead. The reasons are economic rather than fashionable, and they are worth setting out properly, because both models are still viable and they fail in different ways.

What each one actually is

Dropshipping is retail without inventory. The customer orders from you, you pass the order to a supplier, the supplier ships to the customer, and you keep the difference. You are the shop: the payment, the promise and the complaint are all yours.

A review site sells nothing. It helps people decide what to buy and earns a commission when they buy through its links, usually alongside display advertising. You are not the shop, so the payment, the shipping and the return are somebody else's problem.

Why dropshipping became harder

• It depends on paid advertising, and advertising is an auction. As more sellers chase the same audiences the price of reaching them rises, and the seller who can afford to pay most per customer sets the floor for everyone else.
• Delivery times from distant suppliers compete against retailers who deliver next day, and the comparison is not made in your favour.
• You carry the service load. A broken or late item is your shop's failure in the customer's mind, whatever the supplier did.
• A product that works is copied within weeks, usually by somebody willing to sell it cheaper.
• In the EU you carry the legal obligations of a seller: the fourteen-day right of withdrawal, conformity guarantees, and the duty to inform before the order. Those do not transfer to your supplier.

None of that makes it impossible. It makes it a business that needs advertising skill and working capital, which is not what it was sold as.

Why a review site appeals, and the arithmetic behind it

The honest summary is that it substitutes time for money. Dropshipping buys traffic and gets sales immediately. A review site earns traffic and gets nothing for months.

Illustrative. A dropshipping order of 40 at 60% gross margin leaves 24, minus perhaps 15 of advertising to find the buyer and 2 of service and refunds, so around 7, and that 7 stops the day the advertising stops. A review site sending the same buyer to a retailer at a 5% commission earns 2 on that sale, and the article that sent them keeps sending people next month at no further cost.

So the dropshipping order is worth several times the affiliate one, and the affiliate article is worth several orders over time. Which is better depends entirely on whether you have money or patience, and most people have one and not the other.

The honest downsides of review sites

• The first year is mostly unpaid. Search engines take time to trust a new site, and there is no way to buy past that cheaply.
• Commissions are a small percentage of somebody else's sale, and the merchant can change them without asking you.
• You depend on a channel you do not control. A change in how search works can halve your traffic in a week.
• Trust is the whole asset. A reader who senses the recommendation was bought does not come back, and there is no recovering that at scale.

Disclosure is not optional in the EU

Widely treated as a courtesy, and it is a legal requirement in every major market. The wording of the rules differs; the practical obligation is the same.

In the EU, the Unfair Commercial Practices Directive requires commercial communications to be clearly indicated as such unless that is obvious from context, and an affiliate commission counts as consideration even with no contract and no payment up front. Stronger still: presenting paid promotion as editorial content is in Annex I, the list of practices unfair in all circumstances, with no case-by-case assessment.

In the United States, the FTC's Endorsement Guides require disclosure of a material connection, and the definition is broader than payment: free or discounted products, employment and family relationships all count. The 2023 update is explicit that responsibility sits with the publisher and the brand rather than with the platform, and that a platform's own built-in disclosure tool may not be adequate on its own.

Australia, Canada and the UK each have their own equivalent, administered by their consumer or advertising regulators, and all of them land in the same place.

So in practice: say it at the top of the article, in your own words, where a reader sees it before the recommendations rather than after them. That satisfies all of the above and requires no research into which regime a given reader falls under.