If you have an online business, a website, or a blog, you’ve probably heard of digital products. Chances are that you’ve consumed quite a few of them already, and you may even be thinking about adding them as a new revenue stream to your business. Before you can start to think about creating digital products, it’s important that you understand what exactly they are.
Digital products are information products that can be downloaded online. This could be an eBook, a video course, a webinar, an audio recording, or even a handful of printable checklists or a workbook. Digital products come in a variety of different formats from pdfs to mp3s. What product format you choose depends on what you’re comfortable creating, what works well to convey the information you’re sharing, what you’re teaching, and of course what your target audience prefers.
Before you consider what you may want to create, browse around and see what type of digital products are available in your niche. Buy a few and review them. Take note of the kind of information covered, how the material is organized and shared, what the product looks like, how it is delivered etc. Take note of price points too. All this research will come in handy when you are ready to develop your own digital products.
Another interesting aspect of digital products is that it’s easy to set up an affiliate program and pay a high commission on it. While the affiliate commission on physical products is often 10% or less than the purchase price, with digital products, commissions of 50% or higher are the norm.
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This is important for two reasons…
First and foremost, this makes it easy and profitable for you to sell digital products to your visitors and subscribers. It’s a nice way to test the water, see how digital products are received, and create a passive stream of income at the same time.
Secondly, setting up an affiliate program of your own is a great marketing strategy to help you make more sales of your digital products and grow your reach once you create them. Since there is not a lot of cost and overhead involved in digital products and it usually costs no more to sell one than to sell two hundred (aside from fees like those paid to PayPal for example), it’s possible to pay high commissions and still make a profit for yourself.
The Biggest Benefit Of Selling Digital Products
There are many good reasons why you should look into creating and selling digital products on your website. They are easy and inexpensive to create. There’s a lot of profit to be made, and frankly, your audience is coming to expect to be able to pay for and download premium content. We order Netflix, buy books for our Kindles, and consume information products in a variety of different ways. If you’re not in the market of selling digital products, you’re missing out.
By far the biggest benefit of selling digital products is that it’s a business model that’s scalable. Here’s what I mean and why it is such a big bonus to getting into the business of creating and selling digital information products. The product is built once, uploaded to a web server, and can then be sold over and over again for months and even years to come.
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There aren’t a lot of costs associated with selling extra copies. There isn’t a lot of extra work and time involved in selling extra copies. In short, it’s easy to go from selling 10 copies of your eBook to selling 1,000 copies. You don’t have to worry about managing stock, ordering supplies and the likes. Instead, all your time and effort can be spent on marketing your product and continuing to make more and more sales.
There aren’t a lot of business models out there that allow you to scale up without a lot of upfront costs. Usually, you have to order a lot more stock, rent a bigger warehouse, hire more people, and ramp up your entire infra-structure before you can grow and double your sales. That’s a lot of upfront cost, responsibility, and frankly a significant financial risk to take. With a digital product business, you can scale up without any added upfront cost. Yes, as you make more sales, the shopping cart or payment processor takes a cut (think PayPal or Credit Card fees), but those only go up as your sales increase. Aside from possibly needing a bigger web hosting package and possibly having to answer a few more customer emails, your business stays the same whether you’re selling 3 products per month or 3,000.
This gives you a lot of flexibility when it comes to growth. You can scale up as slowly or as quickly as you feel comfortable. You can try new marketing methods like Facebook advertising, or broker Joint Venture deals. You can get others to help you market for a cut of the profits through affiliate programs. Since the profit margin on digital products is so high, it’s not uncommon to pay affiliates a 50% commission for every sale they refer to you. This makes it very attractive to other marketers in your niche and gives you the chance to quickly expand your reach without any upfront investment of time, money, or resources on your part.