Selling Digital Products VS. Selling Services

My two favorite internet business models are 1. Selling Digital Products and 2. Selling Services.

In my opinion, these are the two most profitable and relatively easy ways to make decent money online.

Let’s look at the pros and cons of both…

1. Selling Digital Product Online

I place this one first because it’s my business model of choice. If I had to start all over again with an internet business, I would sell digital downloadable products.

In case you’re wondering just what digital products are, they include PDF ebooks, software, video training, audios, graphics, website templates etc. Basically, any thing of worth in digital form that can be downloaded falls into this category.

The thing I love most about selling digital products is that if you’re the product creator, you work once and get paid over and over again.

This is different to selling a service for example where you are trading your time for dollars.

Selling digital products gives you the freedom to choose when you want to work and how much you want to work because everything can be completely automated.

Thanks to computers and websites that work on autopilot, you can take orders and deliver the download to the customer while you’re out playing golf with your friends.

You can even follow up with your customers if you put them in an autoresponder.

The down side to all this is that it takes a fair bit of work to create your own products.

You can go the affiliate marketing route where you sell someone elses product for a cut of the sale. This works well for beginners or for a cross promotion with your original product if it’s related.

2. Selling Services Online

The basic definition of selling services means that you perform a service for your client that helps them. It’s kind of like ‘freelance’ work where you get paid to perform tasks for your employer.

Some examples of services you can perform include everything from copywriting, ghost-writing (articles, ebooks, press releases etc.) graphic designing, programming all the way to consulting.

There is a lot of money in selling services online. You’ve probably heard of copywriters getting paid $50,000 to write one letter… and consultants  getting paid $10,000  a month to meet (online) with clients to discuss marketing strategies, etc.

It’s not uncommon to find professionals earning 6 and 7+ figures a year selling services online.

Apart from the potential for big pay checks, you usually get paid first too before you do any work.

In this way it beats digital downloads because there is often a big time and money investment initially in getting your digital product ready to sell.

However, there are downsides. And these cons may turn you off selling services because the terms of it aren’t for everyone.

The biggest downside I find is that it’s still like a job – trading dollars for hours. You don’t have the freedom to do as you please when you sell digital products. You have work to do that your client is waiting for.

And that brings me to another drawback – clients.

Most clients you get will be totally happy with your work because they trust your expertise and aren’t all too fussy, but on the odd occasion, you will get the client who will be very hard to please.

It’s clients like this that will almost make the deal not worth your time for the amount they paid you.

There is a way to sell services and take yourself out of the picture, and that is to have staff under you who can handle the contact with the clients and do the work. You will have to pay your staff but you will have to be the ‘manager’.

There you have it, a brief overview of the two best online business models. If you aren’t already, try them out and see which one serves you best.

It really depends on your personality and goals, and a whole lot more, but whichever you choose, give it your best shot and you can make a great living online with it.

To your online success,

Stuart “Sensei” Stirling

p.s. Which business model do you prefer? Why? I’d love to hear your comments.

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6 Responses to “Selling Digital Products VS. Selling Services”

  • Stu Sensei on July 10, 2010

    Lisa, Jesus, Mario, thanks for your comments. Looks like you’re all with me on the digital downloads model because it’s really set and forget.

    The toughest part is to just get out there and create your system.. selling your ebook or report or whatever. Then you’ll have an automated income stream. Then when your first one is running, go on to create your next!

    Good luck!
    Stuart

  • Mario Alexandre on July 10, 2010

    My friend Stuart,

    Thanks so much for your downloads about using digital products and offering services online. I understand that your specialty is in that area.

    As for me, I have some problems in getting started with an online business. Although, I’m familiar with the medium, I am stuck as how and where to begin. Here’s what I’d like to work with: digital products and selling guides and small reports

    Any help from you would be welcome as far as some support materials about starting a digital products business or selling guides and small reports.

    I do appreciate your good disposition to help others and I also am able to recognize that you are indeed a great person, sociable and friendly and always ready to help others. You’re a great guy, Stu !

    Let me know what you can do to provide some orientation to me.
    Thank you, Mario Alexandre

  • Jesus Moreno on July 10, 2010

    Hi Stu:
    I thing that internet is much more aimed to work under an automated mode making use of all those resources that we can have at hand and obtain a running business without having to be “there”. Therefore, I like much more the idea of selling digital products instead of services. At least, this is my own point of view.
    Thanks,
    Jesus M.

  • Lisa Oliver on July 10, 2010

    Hi Stuart,

    I liked this article and agree with you about clients when working freelance – I worked as a freelance writer online for ten years until I had a heart attack and noted as you did, that if you don’t write you don’t get paid 🙂 I have been plugging away at the IM market for a while now with mixed success but i agree that once you can get a product to sell then getting paid for it over and over again will be the ultimate satisfaction.
    Thanks for sharing such great info – yours is one of the few emails I ever read now
    Best wishes
    lisa
    .-= Lisa Oliver´s last blog: Internet Marketing Success Tips – Stop Struggling- Start Earning =-.

  • Mark Aylward on July 9, 2010

    Stu
    I am working toward the products side as the services side does seem more like a job, but I would think that after you have a few products that the occasional speaking engagement would be a good one time cash infusion and great publicity for your products as well

    Thanks, I like your stuff!
    Mark
    .-= Mark Aylward´s last blog: Niche Marketing Strategy Secrets Revealed =-.

    • Stu Sensei on July 10, 2010

      Thanks Mark. You can definitely do both. I do take on the occasional copywriting job or website building job when I feel like it. Yeah, a speaking engagement would be a great opportunity too if the offer is there.
      Cheers,
      Stuart Stirling

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