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Selling Digital Products and Payment Systems

By: Dave Howell - Updated: 27 Jul 2010 | comments*Discuss
Selling Digital Products And Payment Systems

Unlike the sale of physical goods, if you intend to sell digital products from your online business, there are a number of key elements your business must pay close attention to. The future looks set to offer even more products as digital downloads, so getting your online business ready now to exploit this market makes commercial sense.

What are Digital Products?

The digitisation of may consumer products is now taking place. The music industry has just moved through one of the most turbulent times in its history as the music buying public move from purchasing physical CDs to downloading the music they want to own. Joining music will be the film industry and also the publishing industry as the eBook finally becomes a digital product customers can download. Digital products you can sell via your online business include:

  • Music
  • Books
  • Publications and other documents
  • Video
  • Graphics and other types of art
  • Photographs
  • Software.

For your online business the advantages of digital products is clear: You don’t have to hold physical stock that then needs to be shipped to your customer’s address. These advantages have meant that digital products have become very attractive for new online business start ups. Selling digital goods, their delivery and payment can all be handled automatically via your website.

Digital Rights Management

As we have seen with the music industry, copyright and the illegal sharing of digitised music has become a major problem for businesses that need to ensure the digital products they sell are paid for. Digital Rights Management or DRM has been developed to allow the copyright holder of a digital product to restrict how their products are distributed. DRM is still a contentious issue as some industry thinkers believe that all DRM should be removed.

Whether your online business is selling original digital goods you or your colleagues have created, or your website will act as a distribution channel for existing digital works, you have to make a decision about how your will use DRM and how this could impact on the payment your receive for the digital goods your website sells. This is where market research can come in very handy indeed. It allows you to find out first hand what your potential customers want and if DRM will be a barrier to your online business becoming a popular destination site with customers.

Digital Products and Mobile Sales

One of the massive growth areas for digital products is M-commerce or commercial sales via mobile phones. What began as sales of ringtones has now evolved into other digital products. With mobile phone handsets increasing in sophistication, and with new high-speed networks such as 3G, this commercial channel looks set to explode.

Selling digital goods to the mobile phone market is very similar to digital downloads from a website on the Internet. Payment options are similar, but you will have to create a new website for your mobile phone products as your online business will need in most cases a new identity to sell to the mobile phone market. Talk to your website’s designers about repurposing your existing content for the mobile market. Payment systems like Ymogen will be joined by other payment providers as this market expands.

Payment Systems for Digital Products

If your online business intends to sell digital products the payment systems you need to incorporate must be tailored to this market. Selling digital goods not only requires your checkout system to take the payment from your customers, but also deliver their digital goods to their computers.

These payment systems that are dedicated to digital download sales can also take care of any authentication that may be required by the product’s copyright owners. If you are selling digital products you have created such as new eBooks, you can set-up your payment systems to limit how your digital goods are distributed. Two leading checkout and payment systems built specifically for digital download sales include Payloadz and Byte Commerce.

Formats and Platforms

There are dozens of different digital formats that digital material can use. From images to publications, you need to do some homework to find out what formats are the most popular with your customers. The last thing they want to do is make a payment for a product, download it and then discover they can’t open the file.

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