Here’s What You Need to Know!
If you are looking to start a career as a micro-entrepreneur, eCommerce is the way to go. Selling online has helped many prospective entrepreneurs grow and earn handsomely. But should you go for digital products or physical products? Digital products have a definite upper hand over physical products in the sense that they have lower risk. As a result, they make up a considerable chunk of the e-commerce market. Here are 6 advantages of selling digital products over physical products.
1. Digital Products Have Low Overhead Costs
Overhead costs are one of the biggest expenditures when it comes to a business. It includes:
- Rent
- Utilities such as air conditioning and electricity
- Manufacturing
- Shipping expenses
- Material costs
- Security and surveillance
- Point-of-sale software
- Staff members
One of the biggest advantages of selling digital products is that you would not have to purchase and store products, thereby reducing your overhead costs. There’s no need for any staff members either. Even if you have staff members, you do not need as many as you would with physical products.
Your profit margin increases when you take overhead costs out of the picture.
2. Digital Products Do Not Go Obsolete
With no raw materials involved, you do not run the risk of your digital product becoming obsolete. Furthermore, you do not have to worry about storage, warehousing, or global pandemics either.
In saying that, digital products also risk being outdated as technology evolves. But it’s only a couple of hours’ worth of work to update it. And even then, we are talking years down the line.
However, the same cannot be said for physical products. You have to replace them at regular intervals. You cannot store unsold stock for a long time either.
3. Digital Products are Easier to Manage
Physical products come with a lot of day-to-day management work like stocking shelves, shipping, supply chain logistics, and more. Digital products, on the other hand, are easier to manage. All you need are the products, digital storage, and an online marketplace to sell them.
Digital products are always live, meaning buyers can view the product and purchase it much like a physical product. And when purchased, the buyer can have the product (as digital files) instantly.
4. Digital Products Are Always in Stock
One of the biggest worries about selling physical products is running low on inventory. From time to time physical product store owners will have to carefully check inventory and order restocks to meet the customer demands.
One of the key advantages of selling digital products is that you do not run the risk of going out of stock. You create the product and sell unlimited copies or licenses depending on the product. In other words, unlike physical products, the major advantage of selling digital products is that your digital shelves never run empty. Your product can last for years on end, bringing you passive income with little to no additional work.
5. Digital Products Require No Middleman
One of the biggest hurdles you may face with physical products is supply chain logistics. First, you will have to work with manufacturers and wholesalers who supply your (or at least a part of) product. And it gets even more complicated if you sell it via marketplaces such as Amazon.
With digital products, you can cut off the middlemen. You can create the product and sell it on an online marketplace or even on your own website. All your profits are entirely yours!
I have been selling digital products made in Canva in my Etsy store for over a year now and I absolutely love the fact that I never experiences any supply chain issues.
6. Digital Products Have No Shipping Charges
All physical products will encounter shipping charges, including packing costs, handling charges, and postage. On the other hand, digital products are delivered directly to the customer via a downloadable link that they receive once purchased. Therefore, the selling and delivery parts are much more streamlined to avoid potential delays or issues.
Conclusion
Digital products are such an easy way to start a business and make money online. You don’t need any investment, and you can create a passive income in your own time by working from home or anywhere else in the world as long as you have an internet connection with you. I hope that after reading this post you see the immense advantage of selling digital products over physical ones and begin the process of opening a digital store right away.
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