7 reasons why you should sell digital goods from your own website

Do you have a digital good to sell, or will do soon? Perhaps an ebook, crochet pattern, video series, music track, indie video game or something else? Good on you! Just don't limit your selling options by choosing a big third party platform without considering the alternatives. Selling from your own website, blog or social media platform can be a much better option for many sellers. Here are 7 reasons why you should sell digital goods from your own website:

1. Keep a lot more of your profits (easily 35% more)

With most of the major selling platforms, you're lucky to keep 60% of your profits. Just think: you could be paying a platform around 40% of everything you earn to do their job.

This might be the usual deal in the physical world, where shops routinely take 50% of the sale price of your product, but there's not so much excuse in the digital world.

After all, there are far fewer overheads for the third party online seller. It's not like Amazon or iTunes are having to pay rent for a huge store in downtown Manhattan.

If you do get customers to your website or blog and then send them off to a third party this is particularly poor payback for all your hard work. You have found that customer, not the big third party, so they are charging you top dollar just for sorting the mechanics of the sale. SendOwl charges from $9 a month to do this – a far cry from 40% of each sale.

By selling direct from your website you can bypass the rather substantial financial claims of these third parties, and keep around 90-95% of your profits, sometimes more.

Many large digital product sellers are beginning to look around for better alternatives to selling through huge third party platforms that take a large cut of their profits.

For example, in the last two years we've worked with Shopify to launch albums for Radiohead, Kanye West and Nine Inch Nails. These artists are choosing to sell music online direct to their fans.

Radiohead sell their music direct from their website

However, you don't need to be a big name to sell direct. Most of our SendOwl sellers are 'micro-entrepreneurs' and together they have made more than $250,000,000 since 2010. Some are well known in their industries, while others are just starting out. A few combine selling digital products with selling physical products or services.

I’m a consultant for vehicle-to-grid standardization. I trade my time for money. I wanted to find ways to make passive income while I sleep. So I set up an eBook to spread some post-surface knowledge about my industry. Those that want deeper knowledge come to me to hire my consulting services. I have a lot of [complicated tax reports](https://www.sendowl.com/blog/new-eu-vat-rules-2015.html) that I need to do, and SendOwl gives me all the data I need to do it quickly. Marc Mueltin, V2G Clarity

Case study: How much money can I make selling digital goods direct?

SendOwl charges from $9 a month for integrating with your payment gateway, providing a mobile-optimised multi-language checkout and sorting secure and automatic digital delivery. And we don't penalise you for success so if you sell more you still pay the same monthly fee.

Payment gateways (like Stripe and PayPal) typically charge between 1.4-2.9% per transaction plus a small fee (like 30 cents).

So, let's say you're spending $24 a month on SendOwl (a plan with lots of advantages for ambitious sellers) and you choose Stripe as your payment processor.

And you're selling on average 20 PC games a month at $30 dollars and 50 app games at $6 direct through your website (you plan to sell more!).

That means you make $600 + $300 = $900 from direct sales per month. Stripe charges 1.4% + 30c for each transaction (this is for European sales). That's $12.6 + $21 to Stripe = $33.6 And $24 to SendOwl. Bringing your total costs to only $57.6 per month. Meaning you keep almost 94% of your profits.

Plus even if your sales x10 per month you'll still only be paying SendOwl $24 meaning you keep an even higher percent of profits.

2. Stay in touch with your audience

One of the main problems with selling through a big third party is that you are kept at a distance from your customers. You can message customers through the platform but you don't usually get their details, even integrate with certain marketing software. But essentially you are only allowed to know as much – or as little - about your customers as that third party decides. Your customer information is a valuable commodity.

However, by selling direct through your website, blog or anywhere you can paste a link, then you can find out as much or as little as you want about your customers. And you can contact them when and how you choose.

For example, by tracing how your customers move through your site you can work out what content appeals to them and what doesn't, so you can do more of the former and less of the latter, improving your conversion rate. You can work out where your customers come from – and spend more time marketing sensibly to them on their own territory, rather than hoping that their Amazon search finds you rather than a competitor.

You can choose to get in touch should people land on your site, abandon a cart, or make a purchase. You can offer discounts, upsells and other offers when these are most useful to your customers.

In short, you can really get to know your customers and make life as easy for them as possible. And the more you know your customers the more likely you are to get more customers to your site, to increase your conversion rate and to increase the lifetime value of your customers. This last point is particularly important because it is much easier upselling or re-selling to an existing customer than to a new one. And it can lead to higher margins.

If you gain a customer through your marketing efforts but lose one you already had because you weren’t paying enough attention to her, you end up with the same number of customers—but lower margins--because it costs far more to gain a new customer than to keep an existing one. So, staying even—by adding one customer to offset every one who goes away—is actually causing you to lose ground (in the form of decreased profits that come about through increased marketing costs). That is no way to run a business.Paul B. Brown, co-author of Just Start

3. Keep your independence

By selling through a third party you are bound by their constraints: so you need to enter content in a certain way, sell in a certain way and contact your customers in a certain way. This can feel like a bit of a straightjacket. Mark Morris is the CEO of a very successful indie game lab called Introversion Software. Although they sell their games through third-party Steam (the biggest platform for indie game sellers) he makes sure they also sell direct. Hear why in this short interview:

Third party platforms can also change their terms and conditions, raise their prices or deal badly with a new problem and you can't really do anything. You're basically stuck with what they offer.

For example, when the EU changes its new VAT rules in 2015 some large third party platforms reacted in a very slow and confusing way.

I’m a US seller. An international buyer emailed me after she received her purchase and asked why she was being charged VAT even though she paid it all at checkout. Holy smokes! Etsy, you are causing a big problem with your wording. Fix it, O.K….?”

In contrast, our sellers knew exactly what was happening and could opt-in to our solution from day one.

4. Customise the selling experience

Although a large number of people sell digital downloads through third parties like Etsy and Amazon, they can find it hard to customise the selling experience.

For example, if you want to sell software online then you probably need:

• To be able to sell the product with a license key to discourage people from downloading the product and selling it on
• To be able to offer free updates as you improve your software – it's really not in your interests to have customers on old versions that require a lot of customer support

This kind of customised selling experience is not easily available on big third party platforms. Of course, support ecosystems have grown up around these major platforms that can help you to some degree with customising the seller experience. But that's an awful lot of faff and usually extra expense as well.

If you sell direct from your own website, you can choose exactly how you want to sell. For example, SendOwl sellers can easily sell products with license keys (you can either provide your own or we'll generate them). To offer free updates they just need to select one box. That's all. No extra expense. No faff. Just the customised selling experience you would choose, if you could.

Semplice labs sell their software direct from their website

5. Use your own charging model

Why be constrained by how a third party platforms thinks you should charge your customers? Rather than asking customers to pay a set fee and job done you could instead ask for:

Recurring payment

This is an excellent option for online software, games, magazines and many more digital goods. Selling an online subscription or membership means you gain recurring revenue (wohoot!) and can ease your cash flow. Plus it's a sustainable business model. The more content you create the more appealing you make your offer for customers.

In this article on subscriptions, we look at a number of case studies, including selling an online magazine, selling consultancy services, selling access to a membership forum and selling access to instructions about horses dancing (otherwise known as dressage).

Pay what you want pricing (PWYWP)

This is a great option for charities, for sellers with a strong back story, for sellers in more indie industries, and for sellers with a strong and supportive relationship with their customers. FACT: people often will give you more money than you ask for!

When we analysed the results from our sellers using PWYWP we find that customers routinely overpaid from the minimum amount, by an average of over 200%.

PWYWP is also a great way to expand your customer reach because it is really a marketing strategy rather than a pricing strategy.

This case study by four statisticians about trying out PWYWP for their book The Data Science Handbook makes interesting reading.

This is their conclusion:

After we analyzed our results, to our surprise, we discovered strong statistical evidence that with a PWYW model for our book, we could significantly expand our readership (by 4x!) while earning at least as much revenue (and potentially even more) as either of the fixed-priced variants.

One-click Upsells and cross-sells

Upsells are when you offer customers the opportunity to buy a more expensive product that is better suited to their needs (you say this persuasively!). Cross-sells are when you sell them an additional product that they can't do without.

Cross sells are famously used by third platforms like Amazon in their 'frequently bought together' and 'customers who bought this item also bought' sections. However, these cross-sells doesn't really benefit you if customers buy your product and then decide that, yes please, they'd like to buy an additional product – by someone else. Upsells and cross-sells should be about persuading customers to spend more on your products.

When we analysed our data, we found that upsells made our sellers between 4-20% extra revenue with no extra marketing spend.

This is how an upsell looks with SendOwl

Discounts

Discounts are a traditional and effective way to persuade customers to buy your product. You might want to offer a launch discount, a discount to a sub section of your audience, a discount on Black Friday, or for many other different reasons. But you want to be in control of when you offer discounts – and how.

This is again when selling digital downloads through third party platforms like Etsy and iTunes can make your business life just that bit awkward. You can't quite do what you want. You have to stick to their rules. In contrast, selling direct allows you to discount in a way that makes the most sense for your business.

For example, if you want to offer a discount to an email lists/member forums/private facebook groups then you might not want the discount code to be known to the wider world. So you need a solution that supports multiple codes per discount. SendOwl sellers can choose this option. Simple. Good luck with getting big third party platforms to help you with this scenario though.

6. Expand your existing physical products business/brand

There are many ways you can grow your business, but we've noticed that a number of our sellers have moved into digital product selling after having already establishing a brand selling physical products.

This can be for a number of reasons:

1. Digital products complement your physical products
2. Digital products offers a much higher profit margin (if sold direct)
3. Digital products are just easier (fewer overheads, logistics, and so on)
4. Digital products offer interesting ways to grow when your existing business has reached its natural limits.

I’m a full time artist and abstract painter. Primarily I deliver physical paintings to customers internationally. Shipping art is challenging because it’s so fragile. I knew that I wanted to start delivering digital versions of my paintings, so I switched my website from Squarespace to Shopify last year and I use SendOwl to deliver digital prints of some of my work and also e-training courses. I really love it! Amira Rahim

To be able to sell digital product, physical products and software products under one brand, you need a degree of control that the big third party platforms struggle to provide. This is because they are geared to help you sell one product for a fixed price. And your ambitions are much bigger!

7. Reach a global audience

Why not? All it takes to buy a digital product is an internet connection and some kind of electronic device, which means you have a potential audience of millions. SendOwl sellers have customers in 86 countries, selling to customers in every country in the world except eight small ones (Eritrea, Micronesia, Guinea-Bissau, Palau, South Sudan, São Tomé and Príncipe and Tuvalu if you're wondering).

You don't need a big third-party platforms to reach global customers. In fact, they can be more a hindrance than a help. Living in Britain, Amazon automatically asks me if I want to sell in all EU marketplaces, as though this is an impressive offering for £25 minus VAT per month. No, I want to sell to the world!

And the time is right for digital entrepreneurs to expand their horizons. A 2016 Accenture report concludes: “SMEs, especially those born Digital, are the new (micro-) multinationals in the game of e-Commerce.” The report goes on to say that “Until now, B2C online transactions have been mainly domestic (supply and demand from the same nation); however, cross-border e-Commerce is taking over as the key growth engine to B2C trade”

With a digital delivery provider like SendOwl you can genuinely find a global audience and they can pay you in a way that suits them – even using Bitcoins. No need to turn down customers because they don't have access to PayPal or to a credit card.

Sell digital goods direct – go on!

If you want to dip your foot in the water with selling direct that's fine – no problem. You can sell through Steam and SendOwl. Or iTunes and SendOwl. Or sell digital products online with PayPal (which SendOwl supports). Or of course you can come over to direct selling entirely, for all the very good reasons we've described above.

Just make sure that you have a strategy in place for selling your products and growing your business if you want to get the best results. For lots of useful information on digital selling browse our mega post: How to sell digital products (the definitive guide 2017).

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