A digital product simply means any asset that can be stored (and owned) digitally. Whether it is ebooks, media files, digital photos, or games―anything that users can consume and save on their digital devices, are all examples of digital products.
With the increasing shift towards digitalization and the rising capability of digital devices, there is consistent demand for more physical products to be turned into digital goods. So books changing to eBooks, CDs into audio files, or the more recent phenomenon of art as digital goods―the trend is expected to continue.
Hence, digital product marketplaces are growing in importance in the eCommerce ecosystem. These marketplaces foster an ecosystem that serves users a variety of digital consumables, providing entrepreneurs with a lucrative business proposition.
Digital products offer significant advantages. But with countless options available, identifying the most profitable digital products to offer in your marketplace can make all the difference in driving sales and maximizing revenue.
An aspiring marketplace owner can target the following digital product categories to create a niche-specific multi-vendor marketplace or a comprehensive digital download marketplace:
Audible : An Amazon company, Audible specializes in audiobooks and spoken-word entertainment. It offers a subscription model that grants members access to exclusive content and discounts. Its seamless mobile app and vast library make it a leader in the audio content marketplace.
Udemy : Udemy is a platform for buying and selling online courses. It allows instructors to monetize their expertise while providing learners with affordable access to thousands of courses across various industries.
iTunes : Apple's iTunes store revolutionized digital music distribution, expanding into movies, podcasts, and audiobooks. It remains a go-to platform for purchasing digital media due to its seamless integration with Apple devices.
Amazon Kindle : Amazon Kindle dominates the ebook market which enables authors to self-publish their books and sell to a global audience. Its Kindle Direct Publishing (KDP) feature empowers authors to control pricing and royalties.
Steam : Steam, by Valve Corporation, is the top marketplace for video games, offering indie developers and big studios a platform to sell and distribute games worldwide. Its community features and frequent sales contribute to its popularity.
Lazada : Lazada is a Southeast Asian eCommerce marketplace offering a variety of digital and physical products. It integrates digital downloads, vouchers, and multimedia into its offerings.
Envato :Envato specializes in creative assets like themes, plugins, and templates. It is a trusted marketplace for designers, developers, and content creators seeking high-quality digital products.
Freepik : Freepik is a platform for graphic resources such as icons, vectors, and illustrations. Its subscription model provides users with unlimited downloads, benefiting designers and marketers.
A digital products marketplace gives you greater flexibility. Unlike in the case of physical goods, where third-party sellers need to maintain an inventory of physical goods, digital goods marketplaces can host these in the virtual world.
This greater flexibility means there are multiple ways one can shape the operations of the marketplace. Moreover, the role users play, the way in which they interact, and finally transact can also be designed in a number of ways. In other words, a digital goods marketplace can work on multiple operative business models and revenue models.
Let's start with the most important consideration for a business: revenue models in a digital products website.
A digital goods marketplace can generate consistent revenue through the following channels:
Buy Once Sales : Like any brick-and-mortar store functionality, the buy-once business model means that the customer will buy a product from a digital goods marketplace once, and it can either be licensed or owned. Although, fundamentally in most eCommerce business models the product is sold once. This model works great for those products that are designed to be consumed by single users like exclusive ready-made logos.
Bundled Products Sales : Digital Goods Marketplace can also curate product bundles based on specific themes. With the digital nature of goods, it is easier to do so. The bundle is priced lower than the sum of individual products MSPs. This encourages consumers to go for a product bundle, generating higher revenue for the business.
Commission Fees : An admin can deduct a percentage from each transaction made on the platform, ensuring consistent revenue flow tied directly to the platform's sales volume. This approach scales with the marketplace's success, making it a reliable revenue source.
Listing Fees : Vendors can be charged a fixed fee to list their products on the marketplace, creating a revenue stream independent of whether the products sell. This method encourages vendors to curate their listings carefully, ensuring higher quality offerings. For instance, eBay applies insertion fees when sellers list items beyond the allotted free listings, driving revenue from vendor participation.
Featured Products Listing : Sellers can pay a premium to highlight their products in prominent sections or for prioritized placement in search results. This model benefits sellers by increasing visibility and sales potential while providing the marketplace with an additional income stream. For example, Amazon's Sponsored Product Ads allow sellers to promote their items on search pages, directly increasing revenue through advertising fees.
Third-Party Advertisements : The platform can display advertisements from third-party businesses, earning revenue through ad impressions, clicks, or conversions. For example, YouTube integrates ads from brands into video content, generating revenue proportional to audience engagement and viewership.
Expand your revenue streams beyond memberships and all-access plans with these strategies:
Subscription Tiers : The digital goods marketplace can offer various subscription plans, each with unique benefits like additional storage, exclusive tools, or premium customer support. This strategy allows users to choose plans based on their needs and budgets.
Seller Subscriptions : Apart from user subscriptions, sellers can be charged recurring fees for access to premium marketplace features or reduced commissions. This approach can incentivize sellers to keep using and selling on the platform. Shopify, for example, charges sellers monthly fees for its marketplace and offers various plans tailored to specific seller requirements
Licensing Models : Offer flexible licensing options for digital products such as single-use, multi-use, or extended licenses—based on user requirements. This strategy allows customers to pay only for what they need.
Revenue Sharing : Collaborate with content creators and share the profits from exclusive content sold via the platform. This fosters a mutually beneficial relationship and encourages creators to bring their best offerings.
Partnerships : Work with brands or third-party services to establish sponsorships or co-branded content, generating fixed and predictable income. This model leverages the marketplace's user base and credibility to attract high-value partners. For instance, Wix partners with apps and service providers to offer integrations and co-branded tools, creating additional value for users while securing sponsorship revenue.
Maximizing revenue in a digital goods marketplace extends beyond initial purchases. In this case, a digital products website can also earn from complementary services or activities. Let's see how:
Updates : A digital goods marketplace that offers products such as eBooks or software can give existing consumers updates at lower costs. This allows businesses to earn revenue from existing consumers.
Complementary Add-ons/Services : This is again a revenue stream that can be a part of the revenue strategy for digital goods marketplaces. Some examples can include:
Avoiding Duplicacy : Digital products are files that can be stored digitally. Once stored, there is a possibility of duplication. This is especially true in some cases more than others. Circulation of duplicate files can result in loss of revenue for both the sellers and the marketplace owners. Solution : Digital Products can be offered with unique encrypted product keys. This would prevent users from duplicating the digital files, as the same would be useless without the product keys.
Platform security :A digital goods marketplace can attract the attention of malicious activities. Here the attackers tend to gain more with access to the digital goods sold on the platform. Solution :The best answer to attacks is preparation in terms of platform robustness. Ensure that your platform is built with industry-standard security compliances, and has features to ward off malicious attacks.
Preparing for scale :With no geographical boundaries, digital goods marketplaces can attract significant user footfall, bringing in high volumes of traffic. In such scenarios, your platform will be tested to its limits. Solution :Make sure that your digital products platform is tested to support traffic. Especially the volume that your business forecasts predict. This will help you sustain a satisfactory user experience with the increasing popularity of your business.
Doing too much too early :You have a business plan. However, to execute that plan you want to include all features and functionalities that other players include―and probably even more. You launch this business, only to find the users may prioritize some other features that you are unique. Solution :Take it easy. Business success hinges on iterative increments. This allows you to stay fleet-footed and respond to real-world user feedback, building a dynamic digital products platform. This approach is also termed as the MVP (Minimum Viable Product) approach. For this, you will need the support of reliable eCommerce customization services to execute such a plan.
In order to launch a thriving digital products website, then it is crucial to integrate features that enhance its functionality and cater to the needs of all stakeholders. Here’s a breakdown of some essential features:
Intuitive User Interface : An intuitive, user-friendly interface is critical for ensuring seamless navigation. A clean, organized layout helps users easily browse, explore, and interact with the marketplace, improving user engagement and satisfaction.
Advanced Search : Once the business scales, a digital product marketplace can have a large number of digital products available on its platform. For users, searching for their desired product might seem tedious. To smoothen this process, offer advanced search capabilities on your platform. This will help users find the product they are looking for more easily, shortening the buyer journey, fostering a better buying experience, and catalyzing higher conversions.
Digital File Previews : Enable buyers to preview digital files before making a purchase. This feature helps users assess the quality and relevance of a product, increasing their confidence and encouraging purchase decisions.
Multi-lingual and Multi-currency functionality : Since there are no physical delivery and logistics involved in a digital goods marketplace, these have the potential to scale rapidly. This means that your business can scale and operate across geographical borders with ease. To give all users access to the marketplace in languages they are comfortable with and allow transactions in their preferred currencies―you need to consider adding Multilingual and Multicurrency features.
Diverse Payment Methods : Offer a wide range of payment options, such as credit/debit cards, digital wallets, and cryptocurrency. Catering to diverse payment preferences enhances convenience, reduces friction, and accommodates global customers.
Marketing Features : Unlike brick-and-mortar stores, a digital marketplace is practically invisible until it is marketed efficiently and put across in front of the target audience. Even more so for the digital goods marketplace, where the products too are intangible. Hence, all features that enhance the visibility of the website for SERPs and tools that offer email marketing capabilities go a long way in catalyzing the success of an eCommerce business.
Reviews and Ratings : Trust is the pivotal underlying factor that triggers purchase decisions. In the absence of physical presence or any face-to-face interactions, social proof is key to the success of a digital goods marketplace. Customers should be able to give genuine reviews and ratings on the marketplace based on their perspective.
Now that, we’ve understood some common features of a high-performing, successful digital products platform. Below mentioned are some important features of each interface:
| Buyer | Seller | Admin |
|---|---|---|
| Easy Login | Individual Seller Storefronts | User Profiles Management |
| User-friendly Browsing & Searching | Product Listing & Management | Revenue Tracking & Reporting |
| Product Details Page | Sales Analytics & Reporting | Dispute Resolution |
| Secure Checkout & Payment | Secure Payment Withdrawals | Platform Settings & Configuration |
| Review & Ratings | Messaging & Notifications | Reports & Analytics |
| Customer Support | Licensing & Pricing Control | Subscription Management |
| Separate Dashboard | Bulk Uploads | Discounts Management |
| Advanced Filtering & Sorting | Performance Metrics Dashboard | Product Categories Management |
| Rewards & Discounts | Digital Asset Management | Content Management System (CMS) |
| Smart Recommendations | Payout History | Commissions Management |
| Wishlist or Favorites | Custom Branding Options | Customizable Notifications |
| Instant Download Access | Watermarking & Anti-piracy Tools | Tax and Compliance Management |
The development approach chosen to build and launch your 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 to opt for turnkey Readymade Software. Let's explore these alternatives in detail.
Building a digital products platform 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.
Here are some advantages & disadvantages of choosing this approach:
Pros :
Cons :
On the other hand, choosing ready-to-use digital products marketplace software comes equipped with essential features and functionalities to build and launch your marketplace. This significantly reduces the development costs and time compared to the legacy custom-development approach. Plus, it also allows businesses to market quicker and enables them to focus on integrating unique capabilities that their competitors might not have targeted yet.
Here are a few advantages & disadvantages of opting a digital products marketplace software:
Pros :
Cons :
The success of the digital products industry is a direct outcome of the way the technology sector has been progressing. Supported by better digital infrastructure, better device capabilities, and an increased adoption of digital products, change is not just apparent but forthcoming. From a global perspective, the future promises increased digital goods adoption.
Amid this evolution, entrepreneurs starting with a digital goods business on cue stand to benefit from picking the right wave―that promises to keep their eCommerce aspirations moving in the right direction for even more opportune times to come.
A digital goods marketplace is an eCommerce platform where third-party sellers offer a wide range of digital products such as software, eBooks, music, graphics, and more. Buyers get a website to explore, purchase, and download these digital goods. The sellers get a platform to sell digital goods (or in the case of creators, showcase and sell their digital creations) to a global audience.
How do I start a digital products marketplace?To start your own digital products platform, consider the following steps:
However, for more information on this, read this blog further.
Which are the popular players for digital products?You can get inspiration from some leading players to build your eCommerce platform for digital products. Some of these are:
Amazon : A truly global eCommerce platform, even when it comes to digital products. It leverages its popularity to sell eBooks, music, and a lot more.
Envato : A digital goods marketplace offering a wide range of creative resources including themes, templates, and digital tools.
Creative Market : A versatile platform for independent sellers(creators) to sell unique design assets, fonts, graphics, and more.
Yes, Yo!Kart can help build a digital products marketplace like Creative Market and Envato. It has features for both the marketplace operator and the sellers to offer digital downloads on the platform. Furthermore, the software comes pre-integrated with multiple business APIs to broaden the scope. Hence Yo!Kart is a leading marketplace software for digital products.
Yo!Kart stands out from other readymade eCommerce marketplace software due to its unique blend of flexibility, scalability, and ease of use. Some key differentiators include:
Customizability :Yo!Kart provides a high degree of customization, allowing businesses to adapt the platform to their specific needs. Users can tailor the design, layout, and functionalities to fit their brand without needing deep technical knowledge.
Mobile-Friendly :The platform offers responsive design, ensuring that the marketplace is optimized for mobile devices, which is crucial for attracting and retaining customers in the mobile-first world.
Integrated Payment Solutions :Yo!Kart integrates over 20 payment gateways out of the box, which simplifies the process of handling different payment methods across regions and currencies.
SEO-Optimized :Yo!Kart comes with built-in SEO tools, helping marketplace owners optimize their site for better visibility on search engines, a crucial aspect for success in eCommerce.
Scalability :The platform is built to grow with your business, offering options for expansion as the marketplace grows in size and complexity.
Yes, Yo!Kart is an excellent choice for small businesses looking to launch or expand an online marketplace. Here’s how it supports small businesses:
