Physical Product vs. Digital Product - Pros & Cons

By now, chances are that you have thought of many different ways you could start a business online, and you've probably even thought of lots of different products or services that you could offer to consumers. Here we will discuss the products you can offer to consumers with respects to the pros and cons of each.

Physical products offer many advantages to the online business. You can offer detailed descriptions of the products you are selling, along with a gallery of pictures for those items. Many online buyers like to browse through the selection of items on a website, and they are often tempted to by online simply because the costs of selling physical products online can be much lower than at a retail store. And the customers you can attract online are from a much larger pool than you can find in any city.

On the flip side, physical products do have their disadvantages as well. Some of the products you could sell online will be cheaper by price, but because of their size or weight, these items may cost far too much to ship individually, and so the price to the customer is better if they buy that product at the store, in person. Another consideration with physical products is that they can be perishable items. These are not a very good choice when you are selling online. The costs of shipping these items in refrigeration can inflate the overall cost to the customer too much. Also, physical products must be stored, so you will incur costs as a business for a location at which you can store your inventory until it is sold.

The advantage of selling digital products online is that you have no need for storage space. These items have no physical dimensions, and therefore the only room they might take up is a bit of space on your hard drive. They are easy to deliver, because they need only to be downloaded by the customer.  These conveniences are hard to ignore when choosing the products you will sell.

However, don't think you've found the holy grail of products because of these advantages. Digital products are prone to a few unique problems. If your computers, server, or ISP go down, customers cannot get your product until the system is back up. Maintenance costs for your equipment are therefore higher. Also, you will need a plan for your internet service that allows you a much higher bandwidth usage if you plan to sell digital products. This, too, can increase your costs.

Knowing these pros and cons can help you to decide which products you prefer. Just be aware that the competition for each type of product can be fierce, and so research of your own will still provide you the best insight on your choices.