Not every product is physical. There are many things that you can buy, but that you can’t touch, taste or smell. Welcome to the world of digital products… and what a lucrative world it can be.
While digital products can’t be tasted, we all consume them. On a fundamental level these products exist purely in the electronic blips of binary code, but when delivered via a computer, a TV, a tablet or a smartphone, they turn into deeply desirable things: music, movies, online courses, ebooks, graphics, apps, tickets and more.
Selling digital products online is already big business, and it’s only getting bigger. That means that there’s no better time than now to look at these somewhat intangible products, to find out what selling digital downloads, art, streams and software involves.
What are digital products?
Before we dive into the ‘how’ of selling digital products, let’s take a closer look at the ‘what’: what are digital products exactly?
A digital product is anything that a consumer is willing to pay for that doesn’t have a physical form, but that is rather represented in the zeroes and ones of binary code. If it doesn’t have physical substance, you can’t touch it, smell it or hold it in your hand, but you instead enjoy it via the screen of your phone, laptop, TV, or e-reader, it’s a digital product.
Bitcoin is a digital product, A YouTube subscription is a digital product, Podcasts, stock photos and online degrees are all digital products. They’re things that we can’t touch, but that we can consume, provided we have the right electronics to do so.
For an ever-increasing number of entrepreneurs, digital products offer one of the more enticing paths towards commercial success.
4 benefits of digital products over physical products
Why might you choose to sell digital products instead of physical products? The reasons are many and varied, and will depend on the type of digital product you choose to sell, but here are four of the most compelling:
1. No physical inventory
Managing stock is a complex business. You need to order products that will sell, and once they’re ordered you need to make sure that they do indeed sell (and if they’re prone to going off or out of style, that they sell quickly.) You need to ensure you’re never overstocked or understocked, which can be difficult when you have such a heavy reliance on suppliers who have their own stock management concerns. With digital products, you don’t have any physical inventory, which means you also don’t have any stock issues!
2. Lower costs
No physical stock means no physical warehouse, saving you a lot in rent, while also removing costs relating to materials and assembly. In fact, because you probably don’t need a physical shopfront, your entire operation can be compacted down to the size of your laptop. No rent, no store fit-out, no registers, no cleaners – with only digital products to sell, you’ll enjoy an incredibly cost-effective form of business.
Selling digital products online means you won’t even have to pay for postage, nor will your customers have to wait at all for your product to be delivered. They’ll usually enjoy instant access, receiving the product immediately upon purchase. This ensures a great customer experience, and can make it easier to get all-important reviews from your new customers; simply email or message them shortly after the purchase is made, and ask whether they’d be happy to share their thoughts!
4. Greater agility
Online stores that sell digital products are inherently the most agile types of retail business. If you have stock in your warehouse you have to sell it, even if it’s no longer what your customers are looking for. If you have a shopfront, you’ll probably be locked into a long-term lease, meaning you can’t pivot into a different area as quickly or easily. A business that sells digital products can change direction in an instant, from focusing on a particular product, to changing your range overnight.
10 popular digital products to sell online
You’re ready to start a digital product empire, but which digital product should you pick? Here are 10 of the most popular (and profitable) that could form the foundation of your retail success story.
1. Courses, tutorials and guides
People love to learn, as evidenced by the vast e-learning ecosystem that has developed over the last couple of decades. Encompassing everything from simple cooking courses to online uni degrees, this is a great area for anyone who brings deep knowledge in a particular subject. You could offer a single, downloadable guide, a streamable series of tutorials, or a subscription to a database of learning materials.
Do you have a talent for photography? You might be able to sell your work, as websites and bloggers are always looking for imagery to beautify their online presence. As a photographer you’ll need to have your own website to showcase your wares, so why not pick a few of your favourite images and offer them up for sale!
Do you enjoy writing? Whether you hope to educate, entertain or anything in between, ebooks offer a convenient way to get your message out into the world and earn some money while you do it.
4. Professional services
Care to trade the 9-to-5 for a life of freelancing? If you have professional skills that can be delivered via the internet, be they in accounting, psychology, design, analytics, or anything else, you could offer these services as a digital product! Depending on the services you provide, you could charge a fixed price or quote on a case-by-case basis.
5. Software and apps
Selling helpful digital tools is something that we at Square know a little bit about, and we can confirm that it is a great business to be in when you do it right. This path obviously demands plenty of technical ability, as well as an idea of consumer needs that are currently unmet. From WordPress plugins to bespoke apps, those with the right mix of computing knowledge and business nous can turn code into cash.
6. Written documents
Many people hate writing, many others love it, and the latter can help the former by offering their talents as a digital product. If you’re a born writer, consider offering bespoke writing packages: help with resumes, company blogs, business proposals, ghost-written thought leadership pieces and more.
7. Templates, graphics and web elements
Do you have aesthetic talents? In the age of the internet graphic design is in high demand – modern brands need a constant stream of beautiful content for their social media marketing efforts and templates, graphics and web elements for their websites.
8. Digital art
Are you an artist who fears being labelled a sell-out if you dive into the corporate work mentioned above? Don’t fret: with the introduction of NFT art – a way to securely sell, trade and own digital artwork without fear of others copying or stealing it – digital art is now big business!
When you hear the word ‘music’ your mind might leap to the latest Top 40 hit or streaming The Beatles on Spotify. But there are a wealth of other ways a musician can turn their talents into digital products: by offering stock music, by writing scores to independent films, by selling ringtones and audio samples, or by crowdfunding their next album.
There’s no more efficient or effective way to deliver information than video; a fact recognised by an ever-growing number of content creators. Whether you aim to entertain, educate, or offer a heady mix of the two, selling your videos can prove a profitable exercise if you know exactly what your audience wants.
The list of digital products goes on and endlessly on. You could sell tickets, fonts, recipes, research; the options are limited only by the product’s ability to be offered online.
How to sell digital products online in 3 steps
Selling digital products online can be surprisingly simple if you know what you’re doing. In fact, it can be a matter of 3 simple steps:
Pick your product/s: What type of digital product should you sell? Ideally it’ll be something that you’re passionate about, that makes the most of your knowledge or skill set.
Research and validate: You’ll only find success in digital product sales if you offer something that people will be willing to pay for. Conduct market research to validate that there’s demand for your product, and to identify the best ways to sell it.
Find a marketplace or create a website: Some digital products tend to be traded through established marketplaces like YouTube, Spotify, Amazon and eBay. Others – usually the most lucrative – will see you set up an online store.
You should set up your own store even if you offer your digital products through a third party. Why? Because you can earn more by setting your own prices and cutting out the middleman wherever possible.
Square makes setting up your own online store simple. This intuitive tool is free to use and guarantees gorgeous results. Square also automatically takes care of payments – the only thing you’ll pay is 2.2% on each transaction.
If you’re ready to sell your digital products online, Square is ready to help.
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