Setting up an online store to sell digital products can be a profitable business. You save on physical inventory storage costs and there is no limit to the number of sales you can make. But what if you’re not a creator and don’t have digital products sell ?
Digital dropshipping offers a solution: connecting you with artists, writers, and businesses for a mutually beneficial partnership. Read on to learn more about this business model and how to build a successful digital dropshipping business.
What is digital dropshipping?
Digital drop shipping is a business model that allows you to sell digital products created by others. You do not yourself own the rights to these products; instead, you sign deals with creators to list their products on your store.
The term “digital dropshipping” is a bit of a misnomer. Contrary to traditional dropshippingyou don’t ship anything and you generally don’t purchase orders from third-party suppliers. Most digital dropshippers sell digital products such as e-books, online courses, or digital art.
Overcoming Common Digital Dropshipping Challenges
Building a business around dropshipping digital products can present a few sticking points. Here are some common problems that can arise:
Licensing Agreements
With a traditional dropshipping business, you can leverage dropshipping sites and applications to access a large number of suppliers. A digital dropshipping business may need to sign agreements with individual creators and businesses, which can take time. Having a solid set of contracts in place can help you speed up this step.
Reliability of suppliers
One of the biggest benefits of digital dropshipping is that you don’t have to worry about supplying your own products. This also means that you have no control over the quality of your offers. Choose trust creators based on reviews can help you avoid this problem.
Build customer loyalty
When customers associate your product with your business, it can drive loyalty, creating an ongoing relationship that keeps buyers coming back again and again. But with digital dropshipping, the products aren’t yours and often come with another company’s or artist’s branding. This can make it slightly more difficult, but certainly not impossible, to create those same positive associations and retain customers.
Promote your branding prominently through digital marketing strategies to ensure customers associate your name with the products they purchased.
Popular digital dropshipping products
You may be surprised to learn how big the market is for digital offerings. In 2020 alone, more than two billion people have purchased at least one digital product. Looking to start a digital dropshipping business? Here are some popular digital dropshipping products you can offer:
Electronic books
THE ebook the market is booming and is expected to generate $14.6 billion of worldwide revenue in 2024. Given lower overhead costs than physical books, such as inventory space, shipping and handling, ebooks are ideal for digital dropshipping.
Online courses
Online courses offering flexible, self-paced learning outside of formal education settings. Topics range from practical skills like woodworking to formal topics like programming to motivational leadership courses. Whether you want to expand your reach or focus on a specific category, online courses can be a profitable addition to your online store.
Digital work
Digital art—made with digital tools or digitized physical art—is extremely versatile. It can be used to beautify digital spaces, including desktop backgrounds and social media profiles. Customers can also print and frame it to hang in a physical space. If you are interested in art and have a curatorial mind, selling digital art via digital dropshipping could be an ideal business.
Software licenses
Whether you target businesses or individuals, software sales because digital downloads can be a profitable business due to its high profit margins, often reaching 75%.
Archive photos
Many businesses find hiring a photographer expensive and difficult, so they choose to purchase image licenses from third-party providers. With billions of archive photos There, a carefully curated photo library can attract discerning buyers: the challenge is to reach them with your marketing.
Music
The growing popularity of video editing for social media has significantly increased the demand for musicbacking tracks, fun sounds, and other audio content that users can license for their projects. As with other downloadable products, audio files offer low overhead costs and can generate high profit margins with minimal supply issues.
How to Start a Digital Dropshipping Business
When you dropship digital products, you avoid many of the logistical hassles of setting up a physical store, but the process of start your business is similar. Here are the basic steps to help you get started with digital dropshipping:
1. Define your market
With so many digital products available, it’s important to be selective about what you sell. Depending on your abilities, interests, and expertise, you may decide to expand or specialize in a specific area. dropshipping niche.
For example, if you are interested in wildlife and connected with photographers in that field, you can start a digital dropshipping business selling animal photo licenses. Being the go-to website for specialty content can help you stand out from the competition.
2. Find a supplier
Search the domain of your choice to find creators and businesses who would be happy to sell their products on your website. Look for vendors that match your store’s concept, whether it’s a particular genre of ebook, an art style, or a type of software. To make sure you’ve found the right solution, ask for samples and read reviews.
Shopify Collective allows you to sell in partnership with other Shopify brands. You can list items from a partner’s store and they handle fulfillment, whether it’s a digital download link or course access.
3. Set up your online store
Create an online store to display and sell your digital products. There are several apps you can connect to your store to upload, sell, and deliver digital products directly to consumers, including Easy Digital Products (EDP), FilemonkAnd SendOwl.
4. Market your products
Marketing strategies like search engine optimizationSocial media and email marketing can help you reach your target market and encourage customer loyalty. Since the products you sell may not contain your brand, make your store stand out with a unique, easy-to-use site, high-quality customer service, and creative advertising aimed at your target audience.
Digital Dropshipping FAQs
Is the digital dropshipping market saturated?
Easy setup, low overhead, limited shipping costs, and high margins make digital dropshipping a highly competitive market. Despite this saturation, it can still be very profitable if you choose the right niche, optimize the customer experience, and market effectively.
What digital products can I dropship?
You can sell many different types of products on your digital dropshipping store, including e-books, software, photographs, digital artwork, music, and other digital audio files.
What are digital dropshipping suppliers?
Digital dropshipping suppliers are the creators or businesses that produce digital content such as ebooks, software or photography that you can sell on your online store using connected apps and tools like Shopify Collective.