Selling patterns for doll clothing might not seem like a lucrative job: there’s no physical product and doll dress patterns aren’t exactly a trending topic on Twitter. But despite that, one couple is earning $600,000 a year because they chose to harness the power of eCommerce.
Customers have become increasingly dependent on digital retail to provide products and experiences that they can’t get in brick-and-mortar equivalents. In fact, in 2015, almost 1.5 billion people worldwide expended their purchasing power online, with this figure set to rise to over 2 billion in 2019.
Logically, with the sheer amount of people now shopping online, the eCommerce industry is booming, confirmed by the projected 1.92 trillion dollars in eCommerce sales in 2016 alone. And, according to The Gartner Digital Commerce Vendor Guide, 2016 (content available to Gartner clients), “worldwide spending on digital commerce platform software in 2015 was approximately $4.7 billion in constant currency, a 15% year-over-year increase”, figures which firmly demonstrate the proliferation of the eCommerce industry.
Yet, as well as the “traditional” physical product offers – the tangible purchases that get delivered to your front door – there’s been a steady rise in the sale and availability of digital products. eBooks, music, software, online courses, downloadable guides, fitness regimes, and art printables are being bought as digital products that are instantly available to customers as downloads. No more waiting for the delivery guy between the ambiguous ‘9am to 6pm window’.
Even JK Rowling herself wowed fans earlier this year when she released three new exclusively digital Harry Potter e-books. And with eBooks set to generate around $16 billion dollars this year, and global digital music revenues now officially eclipsing the physical, it’s easy to see why so many people are choosing to invest time and money into digital products businesses.
Why should you sell digital products?
The increasing coalescence of the digital and physical worlds means that consumers presume that most things can either be answered by the internet, or bought on the internet. Physical products have the ability to be redesigned as digital services. Digital products sell both knowledge and entertainment in a faster and more convenient way; a powerful sales model, which consumers are valuing more and more.
Let’s take a look at the 5 reasons you should consider selling digital products.
1. You’re selling what you already know
And people will pay for that. Speaking and selling with confidence and expert knowledge is likely to massively boost your conversion rates, and also attract a niche clientele. This guy lived in technological isolation for a year and could definitely advise you on how to market your niche. If you truly know a subject inside-out, your authority on the topic will attract buyers.
Bloggers are also utilizing their technical skills and experience to monetize their blogs through selling eCourses, blog templates, and tutorials – and who better to learn from than those in the know? Small businesses can take advantage of this too. If you already run a successful stationery business selling planners, diaries, and organizers, then creating customizable planner pages to suit your existing audience is a great way to make passive income alongside your main product.
However, you can also make use of survey software to gauge interest in existing customers or prospective customers to conduct invaluable market research into the viability of and interest in your new digital product.
2. Wide profit margins and low start-up costs
Despite being a profitable sector, the digital products market isn’t as saturated as you might think. In fact, in the U.S., Australia, and the U.K., only 11% of online merchants are selling digital products. This means that this sector has room for an injection of new, interesting, and unique products.
Additionally, the margins for digital products have the potential to be higher due to the low cost of the production of goods, lower supply chain costs, zero shipping and handling costs, and the lack of need for inventory management. Getting started is easy: you need a website, an eCommerce platform, a shopping cart, and a payment gateway.
Keep in mind that once the business is up and running, further costs are likely to occur as you scale; consider using email marketing tools, or affiliate marketing which help keep costs under control.
3. Customers value convenience and fast delivery
People click, tap or swipe their phones an average of 2,617 times day. Add this to the amount of times we open a browser on desktop, or perform a Google search, and suddenly we see thousands of consumer access points to online retail. Almost 60% of people use the internet to shop because of its convenience; the convenience factor for the consumer doubles when you consider the instantaneous nature of your digital products. Delivery of your product is immediate, with no handling issues, and the ability to sell internationally without incurring huge shipping costs is a huge pull-factor.
4. To boost your content marketing and lead generation
eBooks can help with your existing content marketing efforts, by giving you the chance to connect further with your existing customers and attract potential new ones. Creating an eBook can help accelerate your branding, and also generate leads for your business by providing some ‘free’ insight and value to people who in turn might remember such a gesture. So good, in fact, that 55% of B2B marketers rate eBooks as highly effective lead generation tools.
5. Grow your show
Perhaps the most appealing aspect of selling digital products is the opportunity it presents for ease of scalability and growth. The ability to expand your product line with one click, no inventory to manage, and unlimited stock means that the opportunity to scale as your revenue grows is unbounded.
Discover your digital niche
As discussed, digital products represent a profitable, unsaturated market into which you should dive if you can offer a digital solution to a problem, but they’re also a great niche asset which could help bolster your existing business. Do you have any success stories to share? If so, let us know in the comments below!
If you think you’re ready to make the move into selling digital products, check out the top apps in eCommerce software to get you started!