Digital Products simply means any type of product or service that does not have any physical form like music, movies, games, ebooks, Photos, etc.
Since the inception of the digital world, people have formulated ways to recreate physical products to digital products. Hardcover books got changed into ebooks and more recently became audiobooks, CD and cassettes became downloadable music files, VCR of movies became downloadable movies, and printed photos became digital photos. So has the relevance of buying digital products increased through online marketplaces.
An aspiring marketplace owner can open a niche-specific multivendor or a complete digital downloads marketplace with all these categories.
Unlike most physical product marketplace, the digital products marketplace has a different business model. The stakes for opening an excellent digital marketplace is much less than physical products. As the whole supply chain of digital products is entirely different from physical ones, the entrepreneur does not have to maintain the inventory or delivery channel, which makes it easy for the business to work. While the business model largely depends on the product that you are selling and the type of relations you want to have with your customers. Read ahead to know different business models of a digital downloads marketplace and things to consider when choosing these business model:
Like any brick and mortar store functionality, the buy-once business model means that the customer will buy a product once it can either be licensed or owned. The fundamentals of all the business models are to buy once, which can be bundled, or access all pass. This model works great for those products that are designed to be consumed by single users like exclusive ready-made logos.
Website: Logomood
The membership model has become increasingly popular for digital products. This model has become popular because the revenue of the membership model can be more predictable than the sales of each product, which may or may not happen.
The cost of retaining an old customer is much less than attracting new customers to the downloadable goods marketplace, thus making this business model more popular.
Website: Hooksounds
This model is for those website owners who want customers to check all the products of their websites and do not want to go with membership options. In this business model, the customer can download whatever they want with a limitation set. This can be your primary business model or an additional business model. All-access models can offer standard digital products, but additional premium products can be charged on a higher fee.
Website: Kindle
While we have covered the revenue models in the above business model point, we will give you a recap of the revenue model a digital product marketplace owner can have for their business:
Advertisement:Either digital products marketplace an allow the seller to advertise their product on specific sections of the homepage or can allow other website owners to display ads on the website. In both ways, the digital products website owner will earn revenue, and the advertiser will be able to attract website traffic.
Commission:When a seller sells a digital product through the marketplace, he owes the marketplace owner a share of the profit. The commission is fixed by the admin of the website beforehand itself.
Membership:Especially for a digital downloadable marketplace, membership is one of the most important revenue sources. The admin can choose the monthly membership business model to earn a fixed amount of revenue every month.
Sales Can Take A Dip Sometimes: A common problem in a downloadable products marketplace is that the sales might sometimes take a dip. There are chances of variation in sales performance, which can suddenly roast your business plan. Solution:Keep a tab on the market, and what your competitors are offering, this might be due to some competitor offering a similar product at a discounted price. Also, keep a check on the review from customers on different channels. Some reviews can spoil the reputation of your brand, thus leading to a dip in sales.
Some Products Not Performing Well: If in your marketplace, some products are not selling while others are selling pretty well. As a website owner and seller on a website, you want all the products to sell equally. Solution:a product might not be performing due to a lack of research. Do you need to work on an in-depth analysis of the market to understand if the market is saturated? Did you release the product at the wrong time? Is the product outdated? You will identify the improvements you need to make around the product when you do thorough research around these topics.
Product Categories Shortage: You may have a well-built website, and the traffic/conversion rate is also increasing. But if you are not introducing new categories in your niche, everything will go in vain. People expect new products when it comes to digital products. Solution:Even when you have stable growth, do not lose focus on getting connected with more and different types of sellers. Even creating product bundles will help in providing the newness that your website is missing.
Website Performance And Functionalities: One of the significant issues for digital product marketplace owners is that the website has a lot of traffic, and the product list, which makes the site starts to lag. Solution:The solution that you choose to launch your ecommerce platform must be performance-optimized. Yo!Kart has been tested through various tests to be performance-optimized. This system is optimized to perform well with 1 million products and 250 concurrent users.
Since digital products have become the new way, it has become more and more popular among the masses. Digital products have been built on the disruptive business model as it has altogether vanished the offline businesses or physical products. People do not buy CDs now; instead, download music that they want to listen.
Registration/Login:The login or registration should be an easy process for the customers to follow. Tech-savvy people understand the process, and it must be made smaller for them to be able to buy the products that they need. Social media and phone numbers should be a way to allow the customers on the marketplace.
Secure Download:The customers should be able to quickly download the product and be seamless for all types of devices. If a customer is downloading on a mobile or an ios device, the download should be smooth and compatible with the device.
Review And Rating:People have become highly aware and choose a website only after reading testimonials. The customers should be able to give the seller and marketplace review and rating according to the perspective. The seller and admin should be able to moderate the comments according to their discretion.
Return And Refund :For a digital marketplace, the features have to be different as compared to your product marketplace. The return and refund is one such feature; the marketplace owner will prefer to entirely remove the function, as digital products once bought can be copied and returned to the marketplace. So the return and refund policy should not be there in a downloadable products marketplace.
Multi-Currency And Multilingual:As the marketplace owner does not have to manage the delivery and logistics, they can easily take their business to the global market. For that, the website needs to be multilingual and multi-currency. People from different countries should be provided the best experience in the marketplace
Marketing Feature :for a digital products marketplace, features that optimize the website according to the marketing perspective is essential. Also, features and functionality to send automated emails or a tool like mail chimp should be integrated into the system to send emails to customers in different stages while buying products.
Shop Page For Seller:A seller shop page helps the customers as people prefer to buy products from a trusted seller even in a marketplace. The customers can check all the products offered by the seller and choose the ones he wants to buy. The seller has the leverage to market their product on the shop page.
Search Functionality:As a digital products marketplace, can have millions of products. Searching products based on categories might also seem a difficult task. The search bar should be optimized and allow elastic search for the best user experience. Filtering products depending on different technicalities should also be permitted on the marketplaces.
Secure Marketplace:Especially for a digital product marketplace, where all the products are downloaded through the system, security features are essential. To secure customer data and the products, choose an ecommerce solution that has functionalities to keep the marketplace secure.
Payment Gateways:Especially when paying for a product online, every user has a specific payment gateway that they trust. This can depend on their preferences, or some countries have only a few payment gateways. Your digital products marketplace must be integrated with payment gateways of the countries you are planning to sell.
Product Catalog:For a digital product marketplace, a product catalog is a must for the best user experience for the end customer. The admin must create a catalog, and the seller can easily update the products. If a product is missing from the catalog, the seller can request the admin to create it. A product catalog system ensures the seamless and quality experience of the customers on the platform.
The approach taken for the digital products marketplace significantly impacts the factors contributing to its success, such as adaptability, scalability, and versatility. There are two main options available: the traditional custom development approach and the modern approach of option for turnkey digital products marketplace software. Let’s explore these alternatives in detail.
Building a digital products marketplace from scratch by assembling an in-house team of experts or outsourcing the development work can be one way to go. However, this approach comes with few hassles including the substantial time and financial investments required. In addition, it leads to longer time-to-market for business as well.
On the other hand, choosing ready-to-use digital products marketplace software comes equipped with essential features and functionalities. This significantly reduces the development costs and time when compared to the legacy custom-development approach. It also allows businesses to market quicker and enables them to focus on integrating unique capabilities that their competitors might not have targeted yet.
These are the most common questions that a digital products marketplace owner has when launching a multivendor website.
Yes, Yo!Kart can help build a fully-functional digital products marketplace like Creative Market and Envato. The software comes pre-integrated with multiple business APIs for better interoperability. Its robust features and functionalities along with the complete ownership of source code aid in creating a marketplace as per the requirements and with complete customization freedom.
How will I control the Copyright issue?Solution - The platform that you choose for launching your Digital product selling marketplace must have security features to avoid any such problem. Features like IP Management can help you a great deal in curbing this problem. Copyright law should be applied to your website and make sure you have a team of lawyers to handle such situations.
For how long should a downloaded product be present in the marketplace?It entirely depends on the type of business model and the niche you prefer for your digital product marketplace. The downloadable product can be available on the platform for a lifetime or for a limited amount of time.
The solution that you are choosing must be integrated with a feature allowing the admin to send SMS and notification through the marketplace. It is the easiest way to connect with your audience on one to one basis.
The solution that you are choosing must be integrated with a feature allowing the admin to send SMS and notification through the marketplace. It is the easiest way to connect with your audience on one to one basis.
Formats that can be supported by the marketplace - If you choose a well-developed ecommerce platform for your digital product marketplace, it will support every standard format you need. These formats will work seamlessly on all devices, thus providing the best user experience to end-users.
These questions can be best answered by the business analyst of the ecommerce solution that you choose to launch your marketplace. The features of the solution will determine the answers to the question mentioned above. Make sure you are fully aware of these things before you go ahead and pay for the solution.
If we see the current market scenarios, the pandemic has not disrupted global health but also economically changed the working. People were already moving from physical goods to digital products; now, people are adopting it more vigorously. The digital downloads marketplace has become the need of the hour, and aspiring entrepreneurs who will be investing; it will experience a massive amount of profits in the coming times.
