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What are the Pros and Cons of Selling Digital vs. Physical Products?

Ywan

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Dec 3, 2018
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I am thinking of going into ecommerce, but I can't decide, which products to sell (digital products like video courses or ebooks via own website vs physical products via amazon).
So I was wondering, what do you think of the pros and cons of physical and digital products? Is one better than the other?

Thanks.
 

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Saavik

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For certain applications, I prefer physical products because they are more absorbent.
 

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Some pros and cons I found on the internet / I know (I don't really have experience in selling digital products, but I sold on Amazon for two years):

Digital Products:

Pros

  • No inventory
  • Easy scaleable
  • Delivery can be fully automated
  • Instant delivery
Cons
  • It is hard to demonstrate value (customers don't have anything they can touch) -> means more time and effort
  • It takes a long time, until the product is ready for the market and has a really high quality
  • I guess, that the market is quite competitive, since there are many competitors
  • You have to constantely create new content in order to stay relevant and market digital products.
  • I can take you a long time (months or years) until you get enough traffic to your website and sell enough products.

Physical Products

Pros
  • Purpose of physical products is usually easy to explain, which means demonstrating value is easy.
  • If you have the best product at a reasonable price, people will buy from you.
  • Amazon takes care of delivery ... You can make sales while you sleep.
Cons
  • Shipping fees can be high, if the product is heavy or big
  • You need to manage inventory.
  • You can run out of stock, which can result in loosing your ranking on Amazon.
  • You don't have much control when selling on Amazon. Sometimes problems arise and it takes months to solve them. I wanted to sell a skin care product on Amazon and it took about six months and I don't know how many mails and telephone calls, until I got the permission to sell it (it was marked as hazardous – like some kind of battery). A bigger problem can be, when Amazon suspends your account. Sometimes it takes only one review, where the reviewer claims, that you don't sell original products but some kind of copy (it doesn't matter if true or not).
  • Competiton on Amazon can be fierce. You need to have a really good product that is different and you have to communicate this. If you don't do that properly, you could get involved in a price battle to the bottom, which can be really frustrating. Either you don't make profits anymore or you refuse to get lower with the price, which means the sales stop. Then you also don't make profits.
 

LPPC

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Some pros and cons I found on the internet / I know (I don't really have experience in selling digital products, but I sold on Amazon for two years):

Digital Products:

Pros

  • No inventory
  • Easy scaleable
  • Delivery can be fully automated
  • Instant delivery
Cons
  • It is hard to demonstrate value (customers don't have anything they can touch) -> means more time and effort
  • It takes a long time, until the product is ready for the market and has a really high quality
  • I guess, that the market is quite competitive, since there are many competitors
  • You have to constantely create new content in order to stay relevant and market digital products.
  • I can take you a long time (months or years) until you get enough traffic to your website and sell enough products.

Physical Products

Pros
  • Purpose of physical products is usually easy to explain, which means demonstrating value is easy.
  • If you have the best product at a reasonable price, people will buy from you.
  • Amazon takes care of delivery ... You can make sales while you sleep.
Cons
  • Shipping fees can be high, if the product is heavy or big
  • You need to manage inventory.
  • You can run out of stock, which can result in loosing your ranking on Amazon.
  • You don't have much control when selling on Amazon. Sometimes problems arise and it takes months to solve them. I wanted to sell a skin care product on Amazon and it took about six months and I don't know how many mails and telephone calls, until I got the permission to sell it (it was marked as hazardous – like some kind of battery). A bigger problem can be, when Amazon suspends your account. Sometimes it takes only one review, where the reviewer claims, that you don't sell original products but some kind of copy (it doesn't matter if true or not).
  • Competiton on Amazon can be fierce. You need to have a really good product that is different and you have to communicate this. If you don't do that properly, you could get involved in a price battle to the bottom, which can be really frustrating. Either you don't make profits anymore or you refuse to get lower with the price, which means the sales stop. Then you also don't make profits.
Sounds like a typical ''the grass seems greener on the other side'' case. I often also wonder whether selling digital products would be less headache. But I guess it also has it's disadvantages.

Although there are people who sell digital ebooks about Paleo diet for example by simple directing paid traffic to a killer landing page with A+++ copywriting. The copywriting sells the product without having built a youtube following or something similar.
 

Bearcorp

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I am thinking of going into ecommerce, but I can't decide, which products to sell (digital products like video courses or ebooks via own website vs physical products via amazon).
So I was wondering, what do you think of the pros and cons of physical and digital products? Is one better than the other?

Thanks.
It depends on the needs of your market, which would they prefer? What problem are you solving, and how can you best deliver the solution, digitally or physically?
 

Andy Black

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Digital Products:

Pros

  • No inventory
  • Easy scaleable
  • Delivery can be fully automated
  • Instant delivery
Cons
  • It is hard to demonstrate value (customers don't have anything they can touch) -> means more time and effort
  • It takes a long time, until the product is ready for the market and has a really high quality
  • I guess, that the market is quite competitive, since there are many competitors
  • You have to constantely create new content in order to stay relevant and market digital products.
  • I can take you a long time (months or years) until you get enough traffic to your website and sell enough products.
I take issue with the way the Cons have been written.

“It takes a long time until the product is ready for the market, and has a really high quality.”

What does that even mean?


Firstly it should say:

“It COULD take a long time ...”

Saying “It takes a long time” is too much of a sweeping generalization. I’m sure someone somewhere in the world created a digital product in a “short time”.


But what do they even mean by a “long time” anyway? A week? A month? A quarter? A year? A decade?

Do they mean “too long” or “longer than for physical products”? If they wrote either of those then it would be even more obvious that it’s a flawed statement. Surely at least one person somewhere in the world doesn’t take a long time to create a digital product?


What does “ready for the market” mean?

I have been getting paid to provide a service (that the market wanted otherwise wouldn’t pay for).

I recorded some of what I did and released it as a digital product (a course). It might have taken a week at most to record the videos for the course.

I already knew the market wanted it because I’d been asked for it plenty of times, and I was getting paid by clients to run through the steps in the course.

At which specific moment was it ready for the market? When I set the shopping cart live, or when people were asking if I had a paid course, or when people were paying me to run through the steps in the course?

I presume they mean when I set the shopping cart live? I’d argue it was ready for the market and the market was ready for it long beforehand.

I know this seems nit-picky, but do they mean the doors are open, or that you’ve confirmed product-market fit,


What does “really high quality” mean?

Good enough people pay for it and (can) get value (ROI) from it?

I’d argue that’s all that matters.



For the other points:

People also often can’t touch a physical product before they buy. Demonstrating the value prepurchase online is the same for physical and digital products - you can’t touch either.

Plenty of sales letters demonstrate the value of digital products pretty good.


Competitive and many competitors? For every digital product you could possibly create? I’d argue against it, but actually... so what? Just because it’s competitive doesn’t mean you can’t make a good living. It’s actually a good sign that there’s a demonstrated cashflow (aka market).


You have to constantly create new content? Why? Who says?

Sure, my own course needs updated because the Google Ads interface changed, but what about evergreen subjects and evergreen products?


It could take months or years to get enough traffic? Well yeah, that’s true. You could also get traffic and sales in under an hour. What are they trying to say?

And are they implying it could take longer to get “traffic” (I hate that word) for a digital product than for a physical product?


Hope that helps!
 

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@Andy Black Thanks for the answer. I guess, I shouldn`t just take information, that I found on some site on the internet about a topic I know basically nothing about, and post it.

I think, that you are right with the points you made. I´m actually happy, that you replied, because I am interested in digital products as well, so your answer helped me get a better picture of the topic.
 

Andy Black

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@Andy Black Thanks for the answer. I guess, I shouldn`t just take information, that I found on some site on the internet about a topic I know basically nothing about, and post it.

I think, that you are right with the points you made. I´m actually happy, that you replied, because I am interested in digital products as well, so your answer helped me get a better picture of the topic.
It's ok to post things you find. But their language gives away their mindset, so our learnings aren't often what the author hopes it will be. In this case, my learning is that a lot of people out there have really odd conclusions based on really woolly thinking.
 

mikey3times

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It depends on the needs of your market, which would they prefer? What problem are you solving, and how can you best deliver the solution, digitally or physically?
Exactly. Listen to the person above.

I’m trying to solve a problem I have. I need to hang a bunch of trim in my house so I need to pound a bunch of nails efficiently.

I can buy a hammer or a nail gun. Those are both physical products. The companies selling nail guns improved on the hammer.

While an ebook on how to pound nails might sell a couple here and there, Dewalt sells tons of products every day because the problem they solve needs a physical solution.

Figure out what problem to solve, then decide whether physical or digital is better.

Also, ecommerce isn’t a business. It is a distribution method.
 

artKarolina

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Nov 13, 2018
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I asked people what prevents them from shopping online, and the two major things they came back with are: Trust & Convenience. Having to rely on expensive shipping & waiting for the item to arrive (probably while they are at work and miss the delivery) is actually more inconvenient for some people than buying something they see at the store while they're already there. Trust is a fairly obvious self-explanatory one, but I feel like that one is easier to address over time (reviews, product photos by customers, word of mouth, regular social media presence).
 

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