Becoming a large digital goods merchant means selling intangible consumer goods like software, music, games, or subscriptions. Sometimes, these might have a non-digital counterpart, for example, video games, book downloads, or music albums, but many don’t, for example, eBooks.
Large Digital Goods Best Practices and Insights
Selling business products does come with challenges. However, it also has advantages like saving you the hassle of inventory counts, packaging, and shipping. Here’s a closer look at everything you need to know.
Types of Digital Products
There are several main categories of digital products. Focusing on one type is best, making marketing your business to those interest groups easier.
- Educational material, such as courses, guides, workbooks, eBooks, and journals
- Templates, trackers, and printables like spreadsheets and presentations
- Stock photos and videos
- Graphic design elements, card and invitation designs, and digital files that contain printable art
- Monetizing your music and podcasts
- Web extensions, web design, and mobile apps
- Online courses and premium memberships provide a recurring revenue stream
Advantages of Becoming a Digital Goods Merchant
Whether you want a passive income or want to carry a range of several digital products, here are some of the advantages and disadvantages of becoming a large digital goods merchant:
There are several reasons why you should create digital products to sell.
No inventory better profits – Unlike physical products, you don’t need space to store your inventory. You can also work from wherever you like and don’t have the hassle of shipping costs and problems, making these products better for the environment. Therefore, you save on renting a warehouse or shipping, meaning better profit margins.
Low capital investment – You have meager startup costs and risk because you don’t need to stock a vast inventory to start selling digital products online. If you create digital products, your time is your primary investment.
Good passive income – Once you have developed or sourced your digital goods, you ensure a passive income online from products that sell 24/7, even while you sleep. You can then concentrate on marketing your products and developing new ones.
Flexibility to explore niches – Certain digital products allow you to expand your audience by exploring other niches. For example, if you sell printable templates to businesses, you could branch out with quirky printable templates for college or high school students. Try a trial run where you share these for free through newsletter subscriptions.
Easy geographical expansion – You can sell your products internationally as a large digital goods merchant.
Digital products don’t go out of fashion – Unlike physical products, digital products don’t wear out or go out of date. Updates ensure they stay relevant.
These are some of the advantages of becoming a large digital goods merchant. However, there are also a few disadvantages. These include that it’s a very competitive market, some channels restrict their sale, and you always need to watch for copyright infringement from people wanting to profit from your hard work.
Setting Up to Sell Your Large Digital Goods
Now that you know the various types of digital goods, here’s how to succeed as a large digital goods merchant:
Brainstorm Your Business Idea – Note your business ideas based on your skills, passions, or in-depth hobby knowledge. Are there some digital goods that complement any other business you have? Take your time and refine your ideas.
Validate Your Idea – Conduct online audience research to see if there is a market for your idea. There are several channels where you can conduct interest research and discover if your idea solves a particular consumer pain point, including subreddits, Facebook groups, and communities interested in specific digital content, e.g., recipes, houseplants, DIY, etc. Determine if your idea will motivate people to buy your digital product and how much they are prepared to pay.
Develop your Niche – Once you know the specific pain points of the potential buyers for your digital product, you can decide exactly which target market you want to cater to with specialized services. For example, if you want to create a photography course, you may have determined that there’s a demand for landscape or portrait photography. Specializing means your audience is ready to receive your ideas, creating more revenue and a satisfied customer base.
Test Your Ideas – There’s always competition in every niche. However, you want your digital goods to sell well. Don’t copy what your competitors have. Analyze data from Google Trends to determine search trends for your goods and services over a specific period to help optimize your marketing. Other tools you can use include SEMrush and Sprout Social. Then, test your products and consider increasing your revenue by adding other complementary products.
Create your digital product – Once you have finalized and tested your idea, you are ready to create your digital product, improving on what others offer.
Develop your online shop – You can list your products on marketplaces or create a website if you want more control and earn more per sale. Some marketplaces specialize in specific large digital goods merchants, while others are more general. Influencer Marketing Hub provides a good overview of some of the most popular, including Easy Digital Downloads, Gumroad, Digital Downloads, and WooCommerce.
Generate leads -People must learn about your product to become your customers. In e-commerce, you must use lead magnets, allowing people a free glimpse of what it does. You can do this on social media with paid advertising or generate an email campaign. Use SEO and create a good content marketing strategy to drive more traffic to your large digital goods store.
Price your digital goods – From your lead magnet, you already know which customers will purchase your products. Work out how much to charge by considering the time it took to develop and finalize your idea.
Engage with your customers – if you want more traffic, ask your customers to leave feedback that they allow you to share. Testimonials and reviews are great, but ensure they’re honest to win people’s trust in your digital goods. Use influencer marketing to increase your target audience. Finally, partner with blogs and encourage affiliate links.
Why get a Large Digital Goods Merchant Account?
A large digital goods merchant account allows your business to accept customer payments through a business account instead of using a payment services provider.
Payment service providers don’t have monthly fees or long-term contracts. They also have flat-rate pricing. However, they have strict policies about doing business with high-risk businesses like large digital merchants with huge volumes and high refund requests. Payment methods are also high-risk because buyers don’t swipe a card. With a large digital goods merchant account, you don’t run the danger of a frozen account that takes months to unfreeze.
Large digital goods merchant accounts act like a holding area for the money from a sale. Once the fees are removed for the transaction and service, the money gets transferred to your business bank account.
Read more about the benefits provided with a large digital goods merchant account.
Tips to Thrive as a Large Digital Goods Merchant
The realm of digital goods commerce is dynamic and competitive. It demands strategic planning and a proactive approach. Below are some tips to help you thrive as a large digital goods merchant:
- Leverage Social Media: Harness the power of social media to amplify your online presence. From showcasing your digital goods to engaging with potential customers, social media can be a game-changer. Using targeted ads can also help hone in on your ideal customer base.
- Prioritize Customer Experience: Ensuring a smooth and pleasant customer experience is key. This includes everything from your website’s user interface to purchasing and downloading digital goods. Remember, a happy customer is more likely to become a repeat customer.
- Offer Quality Content: High-quality, unique content is the cornerstone of digital goods. Whether you’re selling e-books, software, or templates, make sure your digital goods offer real value. Poor quality can lead to refunds and damage your reputation.
- Stay Up-to-Date: The digital goods landscape is constantly evolving. Keep abreast of changes and trends to stay competitive. Continual learning and adaptability are key.
- Secure Your Transactions: As a large digital goods merchant, it’s crucial to maintain the security and integrity of your customer transactions. Ensure you have a reliable and secure payment gateway that protects customer data.
Remember, success doesn’t come overnight in the digital goods commerce space. It requires patience, continual refinement, and a customer-centric approach.
Succeeding as a large digital goods merchant is not tricky despite being a competitive market. Your digital products and marketing techniques require creativity to highlight their uniqueness. Analytics and a good marketing strategy will help you stay competitive.
Frequently Asked Questions (FAQs)
What are digital goods?
Digital goods are intangible products that exist in a digital form. Examples include eBooks, online courses, software, digital music, and virtual goods for games.
What are the benefits of being a large digital goods merchant?
As a large digital goods merchant, you can reach a global market with your products, and your goods don’t suffer from wear and tear or go out of date. The digital market can be very profitable, provided you can navigate its challenges.
Is there a risk of copyright infringement with digital goods?
Yes, there is a risk of copyright infringement with digital goods. It’s important to protect your products and monitor them for any unauthorized use.
How do I validate my business idea for digital goods?
You can validate your business idea by conducting online audience research. This can involve checking social media groups, forums, and other communities to gauge interest in your product.
What is a large digital goods merchant account?
A large digital goods merchant account is a business account that allows your business to accept customer payments. It’s particularly beneficial for high-risk businesses such as large digital merchants.
Why do I need a good marketing strategy as a large digital goods merchant?
A good marketing strategy helps you reach your target audience, generate leads, and convert these leads into customers. It’s an essential part of staying competitive in the digital marketplace.