Digital Products to Sell
By: Sophie Gebray, Halal Incorp
What are digital products?
Commerce, the exchange of goods, involves two contrasting forms of product or service, namely a physical format or a digital format. In this article, we shall focus on the latter & look to answer the following questions:
- What are digital products & what do they look like?
- Why should we pay any interest to them?
- How could we create digital products?
- What are the pros and cons of selling digital products?
What are digital products & what do they look like?
A digital product is a product that exists only in the digital realm, this is to say that these products are of an intangible format, like a digital file. Digital products can be brought into physical form; take the instance where this digital file may consist of an ebook or music file. Ebooks can be printed & bound to produce a physical copy in the form of a book or digital music tracks can be burnt onto a physical CD.
The product doesn’t necessarily have to be for sale for it to be a digital product – what distinguishes a digital product is that the primary point of interaction is through technology. It can be understood that digital products are only accessible once the technology is involved, whether this is through computers, phones, tablets or any other type of technology.
As we discussed, digital products are dependent on technology in order to exist, however; what can a digital product look like? Digital products include everything from audio files, ebooks, and mobile or desktop applications (apps) to memberships and creative assets such as fonts, graphics, and PSD files.
Digital Products to Sell
Before delving deeper into digital product commerce, we will have to ask ourselves – why should we care? With the popularity & subsequent globalisation of the internet through the late 90s and early 21st century, we have seen a fiercely positive increase in online commerce. We have witnessed the birth of the digital buyer, a descriptive for individuals who complete purchases for online products & services. In the last few years especially there has been a steady increase in the number of digital buyers. This may seem unsurprising when considering the many months of lockdowns brought on by the COVID-19 pandemic.
As many of us are forced to stay home, many looked to the internet to source goods & commodities which we may have usually bought instore. The lockdowns also gave us the time & motive (by remaining indoors) to browse other services from home. This may have included online courses, streaming service memberships or engaging apps. It is no surprise that many spent time on the internet during 2020 or 2021 – or even in the last decade, this is a culture given to the 21st century. A point of interest comes from our changing shopping habits & increasing keenness to spend money online.
In 2021, of the entire global internet population, digital buyers constituted 65.2%. This is to say that more than half of all individuals with access to the internet have purchased items over the internet, or moreover, you have a higher probability of purchasing a good over the internet than not if you use the web. Most notably, with the easing of lockdowns there comes the change of environment & routines – this isn’t necessarily true for our shopping habits.
Critically, habits are built over time & will always take time to establish, maintain or change. Given this, the majority of individuals who have internet access in 2020 & 2021 have adjusted their shopping habits to become digital buyers – and this process has been practised over the last two years.
In conclusion, it is most likely that these shopping habits, even if they are ‘newly established’, will remain with us past the lockdowns & that many of us have now become digital buyers. Many, through the experience of online shopping, have now become exposed to the convenience of ordering & receiving goods from the comfort of home. This is a dimension of shopping that instore retail stores & services will now have to compete with & overcome, perhaps requiring enhanced shopping experiences to draw once lost customers back into stores again.
The lesson here is that online commerce has only flourished from year to year & that herein lies an opportunity as more & more each year become more trustful of online purchasing & shopping.
We have looked briefly at some examples of different types of digital products & at how the market has become more lucrative in the last few years. How would we go about producing and selling such products ourselves? We will now look at some examples & evaluate their respective production & income strength.
Digital Products to Sell
- Apps:
An application (app), usually a mobile application, is a computer program designed to run on a mobile phone, smartwatch or tablet. These programs are highly common as most of the population have smartphones which utilise smartphone technology & are app savvy. This tells us that there exists a large application market.
Apps tend to increase customer retention & loyalty – this is usually due to the fact that apps are downloaded directly onto our mobile phones. The average individual in the UK uses their phone 4 hours a day, whereas US citizens tend to spend on average 5 – 6 hours daily. Customer loyalty is critical when selling over the internet as trust must be built before potential buyers are willing to utilise and submit their bank details to an online service.
Creating an app requires a clear vision for the purpose of the app & an ability to translate this into wireframes. Wireframes can be understood as clear, 2-dimensional blueprints for the intended application – there should be sketches/designs for each page to be accessed on the application. In 2021, there are now many app-building platforms available, for example, BuildFire, however, an app developer may still be necessary depending on the type of app you would like to create. A gaming app, for instance, will require a developer as this type of app will need internal programming & to be built from scratch. Employing an app developer in the UK can cost around £20,000 – £30,000 to get the app initially produced.
This doesn’t include the running costs of maintaining the app & recall fees if the app were to crash. As we can see, establishing the app itself incurs many upfront & initial costs – in order to break even, you will have to be confident that the service will, in fact, bring profit. This can be incredibly difficult as the app market is highly saturated; there are currently 3.75 million apps on the app store. This is an incredibly competitive market & since building apps incurs many initial fees, it could be rightly understood as one of the hardest digital products to result in profit and it’s one of the most popular digital products to sell online.
- Ebooks
Digital Products to Sell: An eBook is a non-editable book that is converted to a digital format to be read on any digital device such as your mobile phone or computer. You can only read eBooks online & these products require a tablet, smartphone, computer or any other form of technology in order to access them. eBooks also have the specific characteristic of being non-editable; since many will have access to the digital product it is incredibly important that there is no potential for the original content to be changed without the author’s permission. In order for a text to qualify as an eBook, it must be converted into a format which does not allow for editing, similarly to a paperback book. There are three formats in which eBooks are widely distributed, namely, EBUP, AWZ and PDF.
- An EPUB, or electronic publication, is the most widely supported format and can be read on a variety of devices, including computers, smartphones, tablets, and most eReaders (except Kindles).
- AZW files were developed by Amazon for their Kindle eReaders. Including accessories such as bookmarks as well as annotations and highlights.
- A PDF, also known as a portable document format, is a format that most people are familiar with. Even though PDFs can be editable, there exist forms which cannot be edited that are employed for PDF eBooks.
eBooks allow for self-publication – this enables anyone with access to the internet & great ideas to share with the world. This is ground-breaking for new writers as entry to publishing your book has become easier. From a business standpoint, eBooks are relatively cheap to create, where the value of the product rests in the quality of the book itself. Past making an engaging & satisfying piece of text, eBooks may require considerable marketing in order to get the book out & in the hands of many readers.
This is perhaps the costliest aspect of eBooks – 191 million eBooks were sold in 2020. Marketing is crucial for an independent publisher in order to be able to tap into this market as, similarly to apps, there is sizeable competition. In contrast to apps, however, eBooks require very little start-up money.
From a commerce standpoint, eBooks have a high ROI – you may only have to create & publish the book once, be exempt from any new editions of the book, yet still make money from your eBook months or even years after the initial launch.
Digital Products to Sell
- Memberships & Online Courses
A great form of passive income via digital goods includes online courses & memberships. In a sense, online courses & memberships can be grouped together as they both share a similar framework. Both involve content that is usually broken up over a time period. With online courses, this content may be provided to buyers in one purchase but the content itself will be intended to be broken up over weeks or months (this is what inherently makes it a course). With a membership, buyers would sign up to have content delivered to them on a weekly, bi-monthly, monthly or even yearly subscription. Both online courses & memberships will involve the seller orchestrating a rollout plan of the content & an order in which the information provided will follow.
The main advantage to these streams of income is similar to the eBooks – time is invested at the beginning in creating the content & income can be made off the course or membership for the following months & years to come. In 2021, there exist quite a few online marketplaces for online courses with Udemy being the most common. Udemy is a great platform for anyone starting with a small or almost non-existent audience; the platform itself will drive traffic to your course.
A prominent downside to using an online course platform such as Udemy is that much of your income will end up with Udemy, in fact around 50%. This can sometimes feel inequitable if you have spent a lot of time & resources on the course itself.
Memberships at first analysis may seem like a guaranteed source of income. Though it may be true that income can be easily calculated when a membership stream is set up (number of buyers subscribed x price of subscription), there is no guarantee that a member won’t cancel their membership at any point. The best strategy for avoiding cancellations would be to ensure that the value of the content is consistent.
This will give the buyer the satisfaction & relief that what they have signed up for is in fact what they will receive at each timely subscription. It is also important to beware of trends & to understand the volatility behind them. If your product is based on a particular trend you may find that as interest wanes around the fad there is a drop in your subscription count & subsequently your income.