Drop shipping digital products has a number of benefits over drop shipping physical products. With a regular drop shipped physical product you need to fulfil the order, communicate the sale and get the manufacturers to deliver the product to the customer. But with digital products the order can be obtained over the internet. This has some distinct advantages over physical drop shipping/affiliate marketing.
Firstly there’s less to pay. There’s no manufacturing costs (once the product is created), and no delivery or handling costs either. A single digital product can be sold multiple times over and over again. This means those savings can be passed on to the drop shipper/affiliate who has referred the sale.
Drop shipping with digital products is more likely to be referred to as affiliate marketing. With affiliate marketing, you send the customer directly to the product through your affiliate link. This means you don’t need to deal with customers or even the manufacturers either. The affiliate link tracks your customers and when you make a sale you’re paid directly. It’s much easier than a regular drop shipping business because there’s less to do.
Drop Shipping Digital Products: Affiliate Marketing
Affiliate marketing and drop shipping are two very similar business models. Both involve a third party finding customers online and delivering someone else’s product to them. With the drop shipping model, you build a website, collect orders (and money) and forward those orders to a manufacturer. The manufacturer delivers the order.
On an affiliate website, on the other hand, you simply send customers to the product directly. With the right software and API both business models can be fairly straight forward. But with digital products and affiliate marketing model, it’s much more straight forward.
Simply send website traffic directly to the product/service through your unique identifying link (affiliate link). This can be done in several different ways.
Drop Shipping Digital Products – How To Sell
There’s a variety of different ways to advertise digital products through a website or online marketing platform. With digital products in particular it’s a good idea to build an email list. With an email list you can follow up over a longer time period with your potential customers. On a website, you only get one chance to sell each customer. Most people only stick around for a few minutes on a website, and then they are gone forever.
That’s a big risk if you’re paying to get them there. Or, if you go the organic route and create a lot of content (e.g. blogging), it’s going to take a lot of your time. Either way, it’s a good idea to collect your visitor’s email address. that way, you can continue to communicate with them over weeks, months and even years.
Often I’ve had a digital product sale from my list after months or even years after someone has signed up to my email list. Email marketing works!
How To Build A Massive Email List
To build an email list takes time and/or money. If you don’t have much time, your best bet is to run a paid advertising campaign sending targeted visitors to a landing page. From this page, collect email subscribers and follow up with them through automated email messages.
Alternatively you can build a lot of content and attempt to build traffic organically for free. This is a much slower route and depending on your topic, it can take months or even years before you build up a regular flow of website traffic.
With paid advertising, it’s much faster and much more scalable. Once you’re running in profit, you can easily scale up a paid campaign. The same can’t be said of organic marketing. See also PPC vs organic marketing. (PPC = Pay Per Click).
Digital Products Vs. Physical Products
It’s more important perhaps to build an email list with digital products for a couple of reasons:
- Digital products tend to be more vague – you know what you’re getting with a physical product, not so much with a digital one.
- Email marketing allows you to build trust with your potential customers and showcase the value of your products. This is harder to do on a website in a single sitting.
Digital affiliate products pay more than physical products do. With a standard physical product you’re likely to earn between 5% and 10% commission. With a digital product the rate of commission is much higher; typically 30%-40% commission.
Digital products can easily be sold internationally. With physical products you have to consider delivery costs and international tax fees and so on. This just isn’t an issue with a product you can download form your laptop! Hence why digital products pay affiliates/drop shippers so much more.
Other Considerations
There’s other types of products too which pay more in the digital product arena. High ticket digital products, for example are those which pay out larger than average commissions. Typically high ticket affiliate products will pay at least $500 per sale. A few sales of these can match the commission value of thousands of low valued sales.
Subscription affiliate products too, are worth your consideration. With a good subscription product, you can make ongoing commissions for the lifetime of each customer, if they pay recurring commissions. Good products to use are business tools such as email autoresponders and other data and support tools for online businesses.
The most profitable digital products are those which carry high ticket commissions and recurring commissions. If you can use a high ticket sales funnel, you can benefit from a product range which offers both types of product.
