Should You Sell Downloadable or Physical Products? By Mark Yarrobino At Isnare.com Ezine Articles

Here’s a debate that has gone on for years now in the world of internet business: Is it better to sell a downloadable product or a physical product?

The arguments from both sides, in my opinion, have very good points, so what that means, basically, is that there are pros and cons with each.

Before we start, let me explain what I’m talking about for those who don’t know. A downloadable product is anything that can be delivered to the customer electronically, such as an ebook, software, or a monthly membership to your site. A physical product is something physical that has to be shipped. And that’s the difference, and that was probably obvious. But err on the side of caution.

OK, so let’s go over some of the pros and cons of each. The pros of selling a downloadable product are many. First of all, there is no cost of goods as there is with physical products. What I mean is that if you sell someone a watch, for example, from your website, well you have to get the watch from somewhere, and you have to pay for it. So your profit margin is whatever your mark up is on the item. Even if it’s a physical product that you make yourself, you will still have a cost per item that is much more than a downloadable product.

Downloadable products don’t have any cost, so the profits are almost 100% (there is the cost of hosting your site, registering a domain name, advertising, etc.). And they can be delivered electronically, and therefore instantly, so there are no shipping costs, and no shipping delays, and no worries about being out of stock.

So if you’re interested in selling digital products, then these are some of the reasons that you might want to. But physical products have their pros also.

For example, and I think this is a big one, physical products are often much easier to sell. What I mean is, the average visitor/customer expects to have to spend money for physical products. They’ve been doing it for years offline long before they got computers, and they wouldn’t go into a store in town and expect to walk out with whatever they wanted for free. So the market is essentially ready to spend money on a physical item.

That’s not always true with downloadable products. Most digital products are made up of nothing more that information. Sometimes valuable information, but information none the less. People go online looking for information all of the time, and for the most part they expect to find it for free. It’s a lot harder to sell something to someone with that mindset, than it is to sell to someone who’s already expecting to make a purchase.

So basically, if someone goes online searching for watches, there’s a good chance they’re interested in buying a watch or at least doing some price comparisons and other research about buying a watch.

However, if someone goes searching for information about fixing their watch, then they’re probably trying to find some free information, and may not be interested in buying your watch repair guide.

I don’t mean to imply that information products are much too difficult to sell, because that isn’t true at all. Many people have been making their fortunes online selling information, and they will continue to. I’m just pointing out that they are a bit tougher to sell, particularly to a new visitor who just found your website and hasn’t already been warmed to the idea of buying your products. (That’s why you need a list. We’ll get into that another time.)

One more difference I feel I should point out is that in most cases physical products come ready to be sold. Find a distributor to dropship them for you (which is easy), and you’re set. Downloadable items will most likely be something that you’ll have to create on your own, so it’ll take some time and more effort before it’s ready to be sold. You can save time and effort by buying reprint rights, or hiring a ghost writer, but that’s also a conversation for another time.

So what’s my preference? It’s hard for me to say. I’ve sold both types of products in many different incarnations over the years, and as I said, there are pluses and minuses for both. But I do tend to lean towards downloadable products for the reasons I’ve listed above and for one other reason in particular: If you create it yourself, then you’re the only one who controls it, and you’re the only one selling it, and that means it’s yours to market and price as you see fit. And that’s a huge advantage to have in business.

And you’ll want every advantage you can get. I hope this information helps you as you weigh your options and figure out which market you want to get into, and what types of products you want to sell in your online business.

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