PayLoadz

The Digital Goods Business

A white paper on selling digital goods, trends, techniques and requirements

www.payloadz.com3/24/2013

Table of Contents

THE DIGITAL GOODS MARKET OPPORTUNITY 3

THE ENABLERS AND GROWTH DRIVERS 4

Internet Penetration 4

Smartphones, Tablets and E-Readers 4

The Value Perception 4

The Rise of Self-Publishing 5

REQUIREMENTS FOR SELLING DIGITAL GOODS 6

Product Display 6

Product Storage 6

Shopping Cart Software 6

Payment Processing System 6

Product Delivery System 7

SALES PLATFORM FOR SELLING DIGITAL GOODS 7

BIBLIOGRAPHY 8

The Digital Goods Market Opportunity

Digital goods have become mainstream and present a real and huge business opportunity. According to PWC Global Media and Entertainment Outlook 2011, Juniper Research 2011 and PayPal analysis, the digital goods market for North America alone will be over $80 billion in size in 2015. Globally, digital goods will be a $100 billion market by 2015.

Digital goods are items such digital music, eBooks, videos, apps, photos and games. Most of these digital goods can be put together under the umbrella of digital content because they are all content items that can be bought and used on a computing device.

According to comScore E-Commerce Measurement, Digital Content & Subscriptions ranked as the top-gaining retail product category for the second year consecutively with sales growing by 26 percent in 2012.

Digital goods clearly present a growing market opportunity for digital content creators of all types, as indicated by the trends and statistics. Whether you are an eBook author or an indie music artist, a games developer or a magazine publisher, you can take advantage of this market opporunity to start and grow your own business of selling digital goods.

The Enablers and Growth Drivers

The digital goods market is growing, and that presents an opportunity for you to exploit. Do so by understanding the reasons for the growth in sales of digital goods and how they are made available.

Internet Penetration

Internet penetration is the most important enabler for digital goods sales globally. The growing availability of the Internet across the globe has made it possible for retailers to set up shops online and for customers to make purchases online. More and more people shop for goods online, and almost anything can be sold online. It all started with sales of tangible goods, which created the foundation for selling digital goods. Digital goods sales depend on high-speed Internet connectivity because they are delivered online and, in many cases, used online too.

Smartphones, Tablets and E-Readers

The mass availability and high adoption of mobile computing devices such as smartphones, tablets and e-readers have led to a growing demand for content that is accessible on those devices. The eBooks market, for example, has benefited significantly from the availability of e-readers such as Kindle and Nook. The increase in adoption of e-readers fueled the demand for eBooks. The same can be said for mobile apps and games that users download to their smartphones and tablets.

People spend more time than ever on mobile devices and, naturally, need more content to consume. Many people listen to digital music and watch video on their mobile devices, including their computers, more than they watch TV.

The Value Perception

At one time, most businesses considered digital goods something that no one would be willing to pay for, and most consumers didn't want them. There was a low perceived value regarding digital goods. That perception has mostly gone away. A survey conducted by Pew Research Center in 2010 revealed that almost 65 percent, nearly two-thirds of the U.S. Internet users, have paid for some kind of digital good.

The survey also found that users spend $10 per month on an average for purchasing digital goods. The number of people who pay for digital goods as well as the amount they spend have since risen across the globe.

The Rise of Self-Publishing

When there is demand on one side, there has to be a supply side to fulfill it. It was never before possible for traditional publishers and content creators to meet the ever-growing demand for content. There were experts who could create quality content but lacked the financial and technological capacity to publish it on their own and who didn’t want the complexities of going through the traditional publishing route.

The advances in technology have made it financially and technically viable for experts to publish digital content, which has given birth to the self-publishing phenomenon. Authors no longer need to go

through publishing houses. Musicians and bands don’t need to sign up with music labels, and artists and designers don’t need to rely on dealers and brokers. They can now create, self-publish and sell digital goods to the buyers online on their own.

Requirements for Selling Digital Goods

The process and requirements for selling digital goods are similar to selling any other type of goods online. There are, however, certain elements that are unique and essential to selling digital goods specifically. Let’s look at these requirements in detail:

Product Display

Just as offline shops display physical goods on shelves, selling digital goods also requires a place where the goods can be displayed to potential buyers. Usually this is a Web page with content like the product name, product description, images and price. People who sell multiple items can have a full-fledged website with dedicated Web pages for each of them. Blogs can also be effectively used to display digital goods and, at the same time, to engage and interact with existing and potential customers.

Another option for digital goods sellers is to use large online stores such as Amazon, eBay and the PayLoadz Store to list and display products to people who visit those stores. Listing products on stores also helps to market the product because visitors go to those sites.

Product Storage

While digital goods do not require inventory as physical goods do, they need a secure storage space. With digital goods, there is no need to keep multiple units of the same item because a single unit can be sold and delivered to multiple customers. This unique ability to multiply and reproduce copies of digital goods from a single unit is a great advantage, but you, as a seller, need to ensure that your original item is stored in a safe and secure environment with enough safeguards against loss or theft.

Shopping Cart Software

Shopping cart software makes it easy for users to purchase multiple items and checkout by paying for everything at once. A shopping cart becomes essential when you are selling multiple digital goods and want to allow people to buy more than one item at a time.

If you will sell one or two items only, having a shopping cart is not essential. There are other, easier ways available for selling.

Payment Processing System

When you are selling any product, you must ensure that you can collect payments for the product sold. A payment processing system helps you do that. It allows you to process payments from customers through the standard methods of payments. As an online seller, you need a payment processing system

that allows multiple payment methods and payment gateways. Having multiple payment options allows buyers to choose their payment method and ensures that you don't lose any sales because you can't process the payment.

Product Delivery System

No sale is complete until the product is delivered to the customer, and the speed of delivery is crucial in making a lasting positive impact. In the physical world, sellers have the luxury to take a few days or a few weeks to deliver the product; however, that is not the case with digital goods. Customers who purchase digital goods expect them to be delivered almost instantaneously. Plus, as a seller of digital goods, you don't want to track and process orders around the clock. That's where automated digital goods delivery fits in. An efficient automated delivery system keeps track of purchases and delivers products to buyers as soon as the payment is received. That is done without any manual intervention by you. Automated delivery is one of the most important requirements for selling digital goods.

Sales Platform for Selling Digital Goods

A sales platform for selling digital goods takes care of all your requirements. It helps you store and display digital goods, processes payments and deliver goods to buyers.

A sales platform makes it simple for your customers to buy digital goods. At the beginning, you may have one or two digital goods to sell. But you can always add more items as you get them finished. Whether buyers find the product on your website or through the listing on eBay or other Web pages, the sales platform makes purchasing simple and quick for buyers.

With automated delivery, buyers receive their products immediately instead of waiting for you to process their purchase request.

The sales platform that you choose should have the following features:

An easy-to-use process to upload and publish your digital goods A secure storage for digital goods A place that allows selling digital goods on your website as well as other sites and popular stores Marketing tools for increasing popularity and sales Automated delivery of digital goods Multiple payment options

PayLoadz is one of the sales platforms available to you. It is a full-service sales platform for selling digital goods such eBooks, pictures, audiobooks, videos and digital art. At PayLoadz, uploading your digital goods, creating a store listing and marketing them are extremely easy and quick.

Creating a digital product takes time, effort, dedication and creativity. To ensure this hard work is not lost, you need a sales platform and marketing techniques that help potential customers find and buy your digital goods. You can then become successful making money selling digital goods.

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Bibliography

comScore.com. (2013, 3 7).2013 U.S. Digital Future in Focus. Retrieved 3 30, 2013, from comScore.com: http://www.comscore.com/Insights/Presentations_and_Whitepapers/2013/2013_US_Digital_Future_in_Focus2

Pew Internet. (2010, 12 30).65% of internet users have paid for online content. Retrieved 3 30, 2013, from PewInternet.org: http://www.pewinternet.org/Reports/2010/Paying-for-Content/Overview.aspx

Sam Kwong. (2011, 12 12).Global Digital Goods Opportunities. Retrieved 3 30, 2013, from Slideshare.net: http://www.slideshare.net/rokwakata/global-digital-goods-opportunities