Which of these two product categories has earned you more revenue?

3. Physical products not handled by a drop shipper.

I've made lots of money with option #1

Option #2, based on my research, can easily become a money pit if you don't know what you're doing

Definitely #1 but that has been our focus for many years, what my entire business has been built around . Have done some of #2, but frankly it was by "accident" when one of the niches we went into with digital products also had major desire around a category of physical products...started with pure affiliate offers until we knew they would sell and then went dropship a few months later.

I personally like to get into a niche and then branch out with different products once you get one avenue of revenue rolling.

For me...digital products by far. How come? waaay less overhead. ..But the key for me has been offering products of high calibur which has kept me to less than 1% in refunds and charge backs.

Both are scalable but they have advantages and disadvantages. As long as the offer is attractive and you know how to drive targeted traffic, both can be profitable.

If you know how to attract traffic to web-site , both variants can be considered.

It depends on what your business model is.

For example.

I have a physical location where I have both fixed and variable costs and I have run a business with a variety of physical locations for the last 28 years or so.

Before the internet the total revenue was split between retail over the counter sales and mail order.

From about the mid to late nineties the mail order component started to become shared with online sales.

From 2010 online revenue totally replaced mail order revenue.

Last month online revenue exceeded retail physical revenue.

As for what is profitable that also depends on what and how you measure your profitability.

I can have a very "profitable" range of digital products, from a profit margin point of view, but can those products cover my "fixed costs" ?

In my circumstances my business can have $50K fixed costs every month and anywhere between $15 - 30K variable costs each month.

The biggest concerns are to cover your fixed costs and manage your variables so you are profitable.

It would be nice to think one product or category would cover all the expenses but running a real business is about managing the cash flow and variables or product mix at any one given time.

Someone could look at say the digital sales of my business and see huge profits.

Another would look at physical, over the counter sales, and see great profit margins.

Another would look at the ecommerce side and see high revenue, higher volume and lower margins but a lower fixed cost.

Collectively they make a business that drives a profit but when viewed as individual streams they would appeal to different individuals in different ways.

There is always going to be challenges to scale any business.

Probably the best advice is to be a good manager and know your metrics for whatever you do.

Don't be afraid to mix things up but become proficient at understanding what is profitable for your situation.

Whatever your situation become a good manager of that situation.

Best regards,

Ozi

Digital products for me. Much easier and less headache.

number 1 is the best choice

That all depends on your business which product you are selling whether it is a digital product or a physical one. Everything is profitable if you have the right marketing techniques and have a good brand image.

Me i work with digital products but i think psihical are more converting as people have more trust to buy a product that will come at theyr door than a digital product that can be scamy

Digital products for me--all the way.

Personally, I have more success selling my own digital infoproducts from my website, as well as an affiliate for other vendors.

I dabbled with drop shipped physical courses that complemented my digital products, but it was quite cumbersome and so I've moved back to purely online downloadable products.

I have to say it's #1

Digital by far (supported by some printed books at events and speaking gigs) - but mostly digital. Also have some sites doing E-Com selling physical goods...can see where that will grow over time, but profit will always be better with digital.

Jeff

Digital Products for me.

I'd definitely go with digital products.
Easier to handle as there's nothing physical and much more scalable in my opinion.
Kevin

Well, we've done 5 things:

1) Digital products sold on your website

2) White-labeled physical products (dropshipped)

3) White-labeled physical products (not dropshipped)

4) Brand name (not white labeled) physical products not handled by a drop shipper

5) Physical Products handled by a dropshipper (both brand name and generic)

Although we've made a good amount of money with all of the above, we've made our most overall money with #5, followed by #1. #3 would be after those two.

Oh, and my answer is based on earned profit. Revenue is inconsequential.

I've found that digital products have always sold best for me, but about 15 years ago I did sell a manual and CD that I self published that was a very great seller. The material got outdated, so I moved on to something else.