White Paper: The Business of Selling Digital Goods
PayLoadzThe Digital Goods BusinessA white paper on selling digital goods, trends, techniquesand requirementswww.payloadz.com3/24/2013
Table of ContentsTHE DIGITAL GOODS MARKET OPPORTUNITY 3THE ENABLERS AND GROWTH DRIVERS 4Internet Penetration 4Smartphones, Tablets and E-Readers 4The Value Perception 5The Rise of Self-Publishing 5REQUIREMENTS FOR SELLING DIGITAL GOODS 6Product Display 6Product Storage 6Shopping Cart Software 6Payment Processing System 6Product Delivery System 7SALES PLATFORM FOR SELLING DIGITAL GOODS 7BIBLIOGRAPHY 8
The Digital Goods Market OpportunityDigital goods have become mainstream and present a real and huge business opportunity. According toPWC Global Media and Entertainment Outlook 2011, Juniper Research 2011 and PayPal analysis, thedigital goods market for North America alone will be over $80 billion in size in 2015. Globally, digitalgoods will be a $100 billion market by 2015.Digital goods are items such digital music, eBooks, videos, apps, photos and games. Most of these digitalgoods can be put together under the umbrella of digital content because they are all content items thatcan be bought and used on a computing device.According to comScore E-Commerce Measurement, Digital Content & Subscriptions ranked as the top-gaining retail product category for the second year consecutively with sales growing by 26 percent in2012.
Digital goods clearly present a growing market opportunity for digital content creators of all types, asindicated by the trends and statistics. Whether you are an eBook author or an indie music artist, agames developer or a magazine publisher, you can take advantage of this market opporunity to startand grow your own business of selling digital goods.The Enablers and Growth DriversThe digital goods market is growing, and that presents an opportunity for you to exploit. Do so byunderstanding the reasons for the growth in sales of digital goods and how they are made available.Internet PenetrationInternet penetration is the most important enabler for digital goods sales globally. The growingavailability of the Internet across the globe has made it possible for retailers to set up shops online andfor customers to make purchases online. More and more people shop for goods online, and almostanything can be sold online. It all started with sales of tangible goods, which created the foundation forselling digital goods. Digital goods sales depend on high-speed Internet connectivity because they aredelivered online and, in many cases, used online too.Smartphones, Tablets and E-ReadersThe mass availability and high adoption of mobile computing devices such as smartphones, tablets ande-readers have led to a growing demand for content that is accessible on those devices. The eBooksmarket, for example, has benefited significantly from the availability of e-readers such as Kindle andNook. The increase in adoption of e-readers fueled the demand for eBooks. The same can be said formobile apps and games that users download to their smartphones and tablets.People spend more time than ever on mobile devices and, naturally, need more content to consume.Many people listen to digital music and watch video on their mobile devices, including their computers,more than they watch TV.
The Value PerceptionAt one time, most businesses considered digital goods something that no one would be willing to payfor, and most consumers didnt want them. There was a low perceived value regarding digital goods.That perception has mostly gone away. A survey conducted by Pew Research Center in 2010 revealedthat almost 65 percent, nearly two-thirds of the U.S. Internet users, have paid for some kind of digitalgood.The survey also found that users spend $10 per month on an average for purchasing digital goods. Thenumber of people who pay for digital goods as well as the amount they spend have since risen acrossthe globe.The Rise of Self-PublishingWhen there is demand on one side, there has to be a supply side to fulfill it. It was never before possiblefor traditional publishers and content creators to meet the ever-growing demand for content. Therewere experts who could create quality content but lacked the financial and technological capacity topublish it on their own and who didn’t want the complexities of going through the traditional publishingroute.The advances in technology have made it financially and technically viable for experts to publish digitalcontent, which has given birth to the self-publishing phenomenon. Authors no longer need to go
through publishing houses. Musicians and bands don’t need to sign up with music labels, and artists anddesigners don’t need to rely on dealers and brokers. They can now create, self-publish and sell digitalgoods to the buyers online on their own.Requirements for Selling Digital GoodsThe process and requirements for selling digital goods are similar to selling any other type of goodsonline. There are, however, certain elements that are unique and essential to selling digital goodsspecifically. Let’s look at these requirements in detail:Product DisplayJust as offline shops display physical goods on shelves, selling digital goods also requires a place wherethe goods can be displayed to potential buyers. Usually this is a Web page with content like the productname, product description, images and price. People who sell multiple items can have a full-fledgedwebsite with dedicated Web pages for each of them. Blogs can also be effectively used to display digitalgoods and, at the same time, to engage and interact with existing and potential customers.Another option for digital goods sellers is to use large online stores such as Amazon, eBay and thePayLoadz Store to list and display products to people who visit those stores. Listing products on storesalso helps to market the product because visitors go to those sites.Product StorageWhile digital goods do not require inventory as physical goods do, they need a secure storage space.With digital goods, there is no need to keep multiple units of the same item because a single unit can besold and delivered to multiple customers. This unique ability to multiply and reproduce copies of digitalgoods from a single unit is a great advantage, but you, as a seller, need to ensure that your original itemis stored in a safe and secure environment with enough safeguards against loss or theft.Shopping Cart SoftwareShopping cart software makes it easy for users to purchase multiple items and checkout by paying foreverything at once. A shopping cart becomes essential when you are selling multiple digital goods andwant to allow people to buy more than one item at a time.If you will sell one or two items only, having a shopping cart is not essential. There are other, easier waysavailable for selling.Payment Processing SystemWhen you are selling any product, you must ensure that you can collect payments for the product sold.A payment processing system helps you do that. It allows you to process payments from customersthrough the standard methods of payments. As an online seller, you need a payment processing system
that allows multiple payment methods and payment gateways. Having multiple payment options allowsbuyers to choose their payment method and ensures that you dont lose any sales because you cantprocess the payment.Product Delivery SystemNo sale is complete until the product is delivered to the customer, and the speed of delivery is crucial inmaking a lasting positive impact. In the physical world, sellers have the luxury to take a few days or afew weeks to deliver the product; however, that is not the case with digital goods. Customers whopurchase digital goods expect them to be delivered almost instantaneously. Plus, as a seller of digitalgoods, you dont want to track and process orders around the clock. Thats where automated digitalgoods delivery fits in. An efficient automated delivery system keeps track of purchases and deliversproducts to buyers as soon as the payment is received. That is done without any manual intervention byyou. Automated delivery is one of the most important requirements for selling digital goods.Sales Platform for Selling Digital GoodsA sales platform for selling digital goods takes care of all your requirements. It helps you store anddisplay digital goods, processes payments and deliver goods to buyers.A sales platform makes it simple for your customers to buy digital goods. At the beginning, you mayhave one or two digital goods to sell. But you can always add more items as you get them finished.Whether buyers find the product on your website or through the listing on eBay or other Web pages,the sales platform makes purchasing simple and quick for buyers.With automated delivery, buyers receive their products immediately instead of waiting for you toprocess their purchase request.The sales platform that you choose should have the following features: An easy-to-use process to upload and publish your digital goods A secure storage for digital goods A place that allows selling digital goods on your website as well as other sites and popular stores Marketing tools for increasing popularity and sales Automated delivery of digital goods Multiple payment optionsPayLoadz is one of the sales platforms available to you. It is a full-service sales platform for selling digitalgoods such eBooks, pictures, audiobooks, videos and digital art. At PayLoadz, uploading your digitalgoods, creating a store listing and marketing them are extremely easy and quick.Creating a digital product takes time, effort, dedication and creativity. To ensure this hard work is notlost, you need a sales platform and marketing techniques that help potential customers find and buyyour digital goods. You can then become successful making money selling digital goods.
Find us at www.payloadz.com Facebook: www.facebook.com/payloadz Twitter:www.twitter.com/payloadzBibliographycomScore.com. (2013, 3 7).2013 U.S. Digital Future in Focus. Retrieved 3 30, 2013, from comScore.com:http://www.comscore.com/Insights/Presentations_and_Whitepapers/2013/2013_US_Digital_Future_in_Focus2Pew Internet. (2010, 12 30).65% of internet users have paid for online content. Retrieved 3 30, 2013,from PewInternet.org: http://www.pewinternet.org/Reports/2010/Paying-for-Content/Overview.aspxSam Kwong. (2011, 12 12).Global Digital Goods Opportunities. Retrieved 3 30, 2013, from Slideshare.net:http://www.slideshare.net/rokwakata/global-digital-goods-opportunities