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Should You Sell Digital Products? 15 Pros and Cons + How to Make it Better

Selling digital products online is the biggest opportunity for entrepreneurs today. The possibility of passive income and unlimited growth is insanely provocative, making it easy to forget that the industry also faces unique challenges.

In this three-part series covering digital product sales, we’ve done our best to show you the real-world picture of the industry and how to conquer it. We hope to encourage you to take the plunge and not to get discouraged. 

As you’re about to see, the benefits of selling digital products far outweigh the disadvantages once you hit the threshold of success.

Whatever anyone says (including us), the most important thing is that you start working on your business. We’re here to support you by bringing you the most affordable domains and web hosting solutions in Canada.

Pros and Cons of Selling Digital Products

It’s surprising how many people give up on selling digital products after a few bumps on the road.

Although it can be hard work at first, this could be what you need to finally resign and spend time with your family or even retire early.

Here are the main benefits of selling digital products.

Woman using laptop

Pros of selling digital products

This isn’t just glib talk, they are real and powerful advantages you will reap at some point along your entrepreneurship journey.

  • High profit margins, usually more than 85%
  • Automation – use tech to optimize and maintain your business for sustained growth
  • Limitless growth potential and easy scaling
  • Instant and easy delivery, with no shipping logistics involved
  • Low startup costs
  • Wide reach – no geographical limitations to hamper expansion
  • True independence and passive income – you can earn money while you sleep
  • Flexibility and diversity – earn money in many different ways from the same product
  • Pricing flexibility to cater to different customers, such as those in developing countries
  • You’re on your own boss; full control over your business and your life
  • Work from home, or from anywhere in the world
  • The business model is simple to implement and repeat
  • Rapid and sustained growth (for the foreseeable future)
  • Highly rewarding; you get to do what you love and get paid for it
  • Many opportunities to diversify as your business grows

Here at Truehost, we consider the financial benefits of selling online to be only a secondary reward. For us, the biggest benefit is that you get to expand your mind and explore new vistas of opportunity.

You learn marketing, web development, sales, social media, data analytics, user experience design, SEO, business law, and so much more. Breaking out of your comfort zone and becoming a trailblazer in your industry is the best feeling in the world. 

Cons of selling digital products

With all these benefits, it’s no surprise that digital selling has a high failure rate. As with everything else, the top 1–5% percent make the vast majority of profits while the rest make do with scraps. 

That’s because the industry also has many pitfalls, especially for beginners. Here are the most common ones.

  • Threat of piracy – people will copy your product or your idea regardless of what security measures you take
  • Fees for things like software, marketing and sales costs, payment processing fees, customer support, etc, can quickly add up
  • Steep learning curve for beginners
  • Competition from free and open-source content
  • You have to manage your own benefits, taxes, and legal matters, including data protection. It’s even more complicated once you have employees
  • You have no formal safety net, so it’s important to be prudent with your money
  • Building an audience takes a huge effort, especially if you have no online community to start with
  • Being your own boss can be difficult if you have no one to advice and mentor you
  • Building your business is labor-intensive and can deeply hurt your social life
  • Dependence on technology can turn out to be an Achille’s heel
  • Digital products lack a tangible form and physical appeal, so it’s harder to market and sell them; it’s even more difficult to earn customer trust
  • Difficult to process returns and handle unhappy customers
  •  Difficult to price as customers think digital products are less valuable than physical ones regardless of how much work went into them
  • Cybersecurity and data security risks
  • Low-priced items mean you have to sell a lot before you can realize any meaningful income

Selling online is a harsh, brutal game. It’s easy to get discouraged when you see people literally copying your product and content and stealing your revenue.

It can be frustrating when you’re making no headway after months of work.

Don’t give up, but also don’t get comfortable. Always keep looking for new ways to improve your product and your process.

Sometimes you may need to completely pivot and sell a different product, but it’s all part of the growth process. Take it in your stride and keep learning.

sweatshirts shown on online store

Solution: Create Your Own Website to Sell Digital Products

If you’re selling digital products on marketplaces like Etsy and Creative Market, you have more problems to worry about.

Although marketplaces make it easy to get started and give you a large audience, they can seriously hamper the growth of any serious seller.

First, the main problem. Most platforms charge huge transaction fees and commissions as well as listing fees, subscription fees, and ads.

For all that, you still have to work extremely hard to sell your products. You’re competing with hundreds and thousands of other people selling the same thing as you.

You have to invest heavily in time and effort to create optimized listings and promote them on social media just to get a few views on your listings.

If you think about it, it makes much more sense to create your own website from which to sell your product. It may sound like a lot of work, but it really isn’t.

You can create a starter WordPress or Webflow website in hours, or a few days if you’re a complete novice. Using a drag-n-drop website builder like Olitt makes it much easier, plus you get integrated payment processing out of the box.

No matter which website builder you use, there are many compelling reasons why you should go solo.

  • You have room to grow and create a potentially global brand
  • Your customers are really yours – you can create subscriptions, for example, or use email marketing to sell them other products
  • Ability to monetize your community in other ways, such as through affiliate sales
  • Promote your website and content on other platforms with no limits
  • Curate your own customer experience and promote brand loyalty
  • No price limitations; you’re in complete control
  • You can sell on other platforms too, such as Amazon, Etsy, or Creative Market
  • No restrictive terms of use
  • Sell anything, including restricted items and adult material
  • Eliminate competition: customers come to your website to buy only what you sell
  • Maintain your individuality and personality through your brand and brand content
  • Receive the full sales price for every sale and significantly cut down on overheads

We won’t lie, creating and growing an online store is really hard work. Perhaps the hardest part is content creation and organization. You may have to hire someone with the right expertise to do that for you at some point. 

Integrations are also hard to manage, especially if they involve a bit of coding. Most of all, promoting and marketing a website is resource-intensive.

The good thing is, most of this work takes place at the building stage. Once your business takes off, you can comfortably hire experts to take care of the daily work as you focus on strategy and growth.

Why Sell Digital Products From Your Own Website?

We always encourage e-commerce store owners and online sellers to develop and grow their own stores. It’s not just because we sell domains and web hosting services.

If we’re all being honest, it doesn’t make sense to give up 10% or 30% of the value of your product to a third-party marketplace.

Even though it’s nice to have someone else handle SEO, payments, security, taxes, and legal matters, it’s usually not worth the price.

Plus, the store doesn’t really care about you as a seller. They make money whether customers buy from you or your competitors. That’s why they have no incentive to take down sellers who rip off your products or your listings.

Despite the high initial investment in time and money, building a website is usually the most practical option for anyone who intends to live off the income from digital products.

Remember, the Truehost team is here to help you with your journey. From domain registration to fast and flexible website hosting services, we’re committed to empowering small business owners and entrepreneurs.

Talk to us to learn more about our business solutions in Canada.

Learn more from this series:

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