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Breaking Down E-Commerce for Physical and Digital Products

The Difference Between Selling Digital Products and Physical Products Online

E-commerce enables you to reach a global audience and increase your sales opportunities by being operational 24/7. The year 2020 is set to see over two billion online shoppers globally, with over half of that number solely for digital products. E-commerce is cost-effective as it has minimal set-up and maintenance costs. You’re even able to sell both physical and digital products.

Physical products are any tangible item that you could purchase and have shipped to you, like clothes, shoes, or furniture. Digital products exist as files that can be streamed or downloaded. Common forms are audio files, e-books, applications, memberships, or even creative assets like images and fonts. Basically, any product that can be purchased and accessed on a device without any physical requirements. While both types of products can be sold online, there are important differences that affect the success of your business.

Selling Physical Products

Physical products are tangible, and with tangibility comes a higher perceived value. It is easier to market a physical product to a consumer by simply showing how the product can be used. The ease in understanding of a physical product brings consumers to the point of sale quickly.

However, with the ease of sale comes more complex problems. Physical products require capital investment in physical stock. You need to ensure that you have enough inventory to meet consumer demand, and then pay extra warehouse fees to store the inventory. After each sale, you’ll need to figure out the best method for shipping the product in an efficient and inexpensive way. Customers commonly abandon items in their carts if they find shipping fees to be too high or delivery dates to be too far-out.

Selling Digital Products

Selling digital products is traditionally low risk as they do not require an inventory. You don’t need capital to invest in storage costs or have to worry about ordering enough product to meet consumer demand. Shipping time is practically instant and does not require you to figure out the quickest and cheapest method to get the product to the buyer. Without the need to ship an item, your potential customer market opens up to anyone with a device, potentially anywhere in the world.

Although digital products remove the hardships of inventory storage and shipment, they have an added hardship in marketing. Since digital products are not tangible, it is more difficult to raise the consumers’ perceived value of the product and get them to the point of purchase. Marketing efforts take time and effort when explaining and demonstrating the uses and need for the product.

At Kraus Marketing, we work to find successful solutions to help sell your products- digital or physical. Contact us today to start working on your custom e-commerce website and marketing plan.