2201907500 48b43541e8 m Step Three: Choosing A ProductIn my previous post, Step Two: Analyzing The Market Place and Competition, I went over market and competition analysis and why I chose my particular niche and product (maybe I got a little ahead of myself). Here I’ll show you how to choose a product, starting with what kind of product and where to find them and how to sell them online.

Digital Product vs. Physical Product

Pros and cons of digital products

Digital products have a great benefit because you never have to worry about inventory, shipping costs, delivery time and your customers are happier because they receive their purchase instantly. There is also no limit to how many digital products you can sell, you don’t have to make more or wait for manufacturers to restock. Not to mention digital products usually have a pretty high profit margin (especially if you’re selling them as an affiliate).

Some cons of digital products though, are of course pirating. No, not Captain Jack Sparrow pirating, but the spread of your product online illegally where people are downloading them from peer to peer programs like Frostwire or through torrents. I know you would never even dream of doing something like that, but unfortunately a lot of people do. Also, because there is so much free stuff out on the internet, quality is often poor and purchasing confidence may be lower for digital product customers than a physical product, meaning you’ll have to earn their trust and prove you are delivering a high quality product before purchase.

Pros and cons of physical products

Although digital products are extremely appealing, there are also pluses to selling physical products. If you can find a quality manufacturer/drop shipper, then you also don’t have to worry about keeping inventory or overhead costs because customers will pay you before you pay the distributor and then the distributor will ship directly to the customer. You’re just a middle man collecting money. If you don’t want to worry about manufacturers, distributors and drop shipping, then you can become an affiliate seller for sites like Amazon or Ebay and make a small commission off of customers you send to their sites. The commission here is much lower than selling a digital product or having a high margin physical product drop shipped, but it’s also less hassle for you. You can build a site linking directly to products on Amazon and just worry about getting traffic to your site. The bonus here is that not only will you make money off of the product that you are pushing on your site, but also anything else that the visitor buys from Amazon after they click your affiliate link.

Then of course the cons of physical products like having to keep inventory, purchasing costs to keep products, restocking. If you decide to go with a drop shipper, finding one that you can trust and rely on is a task in itself. Initial set up can be a little bit of work and then you’ll have to maintain accounts and manage cash flow more efficiently to make sure everything stays in order between customer purchases and the distributor. Selling physical products as an affiliate is much less set up and maintenance but also yields a much lower profit margin.

Affiliate Marketing

As I touched on above, affiliate marketing is a program that a lot of companies will have for digital and physical products alike. Basically they pay you a percentage of the sale from any customer that you drive to their site. It can be a great source of online income if you’re able to generate a lot of traffic. This is a great way to sell products in a niche that you are able to build high rankings for and are interested in but don’t your own product to sell.

Where to find digital products to promote

Where to find physical products to promote

Relevant Resources

  • Developing A Product – A great series by Maren Kate over at Escaping The 9 To 5, in this particular module she goes over some competition and market information and the different types of internet business models.
  • The Launch Coach Library – Another excellent series that I strongly recommend checking out by Dave Navarro.
Step Two: Analyzing The Market Place and CompetitionStep Two: Analyzing The Market Place and Competition
 Step Three: Choosing A Product