What to Consider Before You Sell a Digital Product

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Selling a digital information product online is a very attractive way for businesses, freelancers and other professionals to enter the world of e-commerce for relatively little risk. This does not mean digital products are entirely without risk. Despite the fact that there are a number of benefits that come with selling a digital product online, you could face a number of undue challenges if you don’t consider all of the possible implications of e-commerce, including those that are specific to digital products.

The Benefits of Digital Products

It’s not a surprise that many businesses opt for digital over physical products. There are a number of reasons why selling a digital product is so attractive, including:
  • Digital products are less expensive to create, and you don’t need access to any special software or hardware to produce a digital product.
  • The development process of a digital product is faster so your product can be sold faster.
  • Digital products are typically provided to the customer immediately after purchase, which is attractive to many purchasers.
  • There is no need to store inventory with digital products.
  • Digital products can come with a high profit margin because the cost of development is so low.
  • There are a lot of options when it comes to shopping carts, payment systems and resellers.
While there are certainly bells and whistles you can apply to enhance your digital product, to get started you don’t need much beyond an idea, a desire to create and the time to get it done.

Commerce Considerations

When you sell a product — any type of product sold in any format — you need to consider a number of factors before getting the product out there. Regardless if you are selling a physical or a digital product, once you have identified your target market, you should conduct market research into these factors:
  • Demand for the product
  • Competition
  • Advertising potential and cost
  • Overall marketing plan
  • Potential price points
  • Order fulfillment
  • Payment options
In most cases, the research should be completed well before you develop the product in order to qualify that there is actually a market for it.

Digital Product Considerations

If your product is a digital product, you will need to consider most of the items above, in addition to the following:
  • Format of the product – Will your product be an ebook, report, video, audio, or a private membership web site?
  • Bandwidth – If your product is especially large or if you have reason to anticipate significant web site traffic, you will need to make sure your hosting plan can accommodate this.
  • Mass distribution risk – You may have some level of security in place, but you can’t completely control what a customer does with your product once they have purchased it.
  • Payment processors – How will you accept payment and distribute your product? Will you use an all-in-one system like 1ShoppingCart to sell, distribute and manage your product? A simpler buy-now  service like PayPal or Google Checkout for processing payment? Will you use a stand-alone shopping cart combined with a payment service, or something else entirely?
  • Seller protection – Many payment processors offer reduced protection (if any) to sellers of digital products.
  • Affiliate program – Will you have an affiliate program for your product? If so, this will be one of the primary factors in your decision about payment processors so you will need to explore the options in depth.
  • Laws and regulations – Does the country in which you are located have specific laws in terms of selling digital products, to customers in-country or abroad?
In looking at the list, you can see that there is a lot to consider when deciding to sell a digital product online. Of course, many online sellers bypass much of the preparation to quickly get the product online and hope for the best. But by fully exploring all of these options and thinking through the life cycle of the product, from idea to sale, you will be able to position yourself for greater success. Image credit: arinas74

Frequently Asked Questions about Selling Digital Products

What are the best platforms to sell digital products?

There are several platforms available for selling digital products. Some of the most popular ones include Shopify, BigCommerce, and WooCommerce. These platforms offer a variety of features such as easy product upload, secure payment gateways, and customer support. However, the best platform for you would depend on your specific needs, budget, and technical skills. It’s advisable to research each platform thoroughly before making a decision.

How can I price my digital products effectively?

Pricing digital products can be tricky as it involves considering several factors. These include the cost of creating the product, the perceived value of the product, and the prices of similar products in the market. A good strategy is to start with a lower price to attract customers and gradually increase it as your product gains popularity.

How can I protect my digital products from piracy?

Protecting digital products from piracy is a major concern for many sellers. There are several strategies you can employ to safeguard your products. These include using secure download links, watermarking your products, and using digital rights management (DRM) systems. Additionally, you can also include a clear copyright notice on your products.

How can I promote my digital products effectively?

Promoting digital products effectively involves a mix of different marketing strategies. These can include social media marketing, content marketing, email marketing, and search engine optimization (SEO). It’s important to understand your target audience and tailor your marketing efforts accordingly.

What are some popular types of digital products I can sell?

There are numerous types of digital products you can sell. These include eBooks, online courses, software, music, photography, graphics, and digital art. The best type of digital product to sell would depend on your skills, interests, and the demand in the market.

How can I ensure customer satisfaction when selling digital products?

Ensuring customer satisfaction when selling digital products involves providing high-quality products, excellent customer service, and a smooth shopping experience. It’s also important to handle customer complaints promptly and professionally.

What are the legal considerations when selling digital products?

When selling digital products, it’s important to be aware of the legal considerations. These can include copyright laws, privacy laws, and tax regulations. It’s advisable to consult with a legal professional to ensure you’re compliant with all relevant laws.

How can I handle refunds for digital products?

Handling refunds for digital products can be challenging as digital products can’t be returned in the traditional sense. However, you can establish a clear refund policy that outlines the conditions under which refunds will be given. This can help prevent misunderstandings and disputes with customers.

Can I sell digital products internationally?

Yes, you can sell digital products internationally. However, it’s important to be aware of the different laws and regulations in different countries. Additionally, you may need to consider factors such as currency conversion and international shipping costs.

How can I scale my digital product business?

Scaling a digital product business involves increasing your product range, reaching new markets, and optimizing your marketing efforts. It’s also important to continually improve your products based on customer feedback and market trends.

Alyssa GregoryAlyssa Gregory
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Alyssa Gregory is a digital and content marketer, small business consultant, and the founder of the Small Business Bonfire — a social, educational and collaborative community for entrepreneurs.

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