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What you choose to sell online can make the difference between a trickle of interest or high demand from your target audience. In the competitive ecommerce market, differentiating your new small business comes down to three elements.
Products or services you offer and how they benefit potential customers or clients
Quality and professionalism of your ecommerce website and branding
Support and consideration of customers through their purchasing experience
While each of those factors plays a crucial role in establishing and growing your online business, your product ideas are priority number one. At the broadest level, you’ll be choosing between selling physical or digital products.
Read on to decide if you want to sell products, services, courses, or subscriptions online, then learn how to get started.
How to choose the right product idea
The best products to sell online are those that you’d enjoy selling and could make at a high quality. Instead of trying to follow trends, start brainstorming the types of products that could be a fit by asking the following questions.
1. What do you enjoy doing?
Make a list of the top five activities you like doing or things you enjoy creating. For example, if you’re an artist, you might list jewelry-making as one of your top activities. This can also help you identify product categories your work could fit into, like jewelry, keychains, and charms.
Rather than forcing yourself to figure out how to grow a business centered on something you don’t enjoy, invest that attention into a product you care about.
2. What do you have experience in?
Starting with a baseline knowledge of your industry or craft gives you an advantage over less experienced competitors. Tapping into your pre-existing skills means you can develop and launch your own online store faster. It also means better-quality products that warrant higher prices. For example, pottery from an experienced artist is much more likely to sell—with higher profit margins—than from someone with less know-how.
Plus, if you have more experience with something, then you’re more likely to have a unique point of view on it. That’ll give you an edge in popular product categories or help you stand out among niche products.
3. Which industries are currently growing?
You don’t have to try to stay on top of trending products, but understanding the industry for products like yours can help you find the most profitable niche to pursue. There are plenty of free tools to help you track the popularity of a product or search engine trends. It can even be useful to start with a simple web search for “[your industry] trends [this year or next year].”
Since many marketing agencies publish trend reports at the start of each calendar year, results for this year still have useful data on the best product or service to develop. For example, if you’re a writer, you might search for: “Author book trends [current year]”.
Use what you find to refine your initial set of business ideas. For example, if you planned to sell online courses in fitness, your research could help you decide what style of fitness course to teach.
See our full guide to finding your ecommerce opportunity
Selling physical products
Physical products are anything concrete that you can package and sell, but not all product-based businesses are created equal. Examples of physical products include:
Art and photo prints
Baked goods or other food
T-shirts and other clothing
Custom greeting cards
Home decor
Jewelry
As you’re weighing your options, consider products that:
Are created once, and sold multiple times
Can be managed by one or two people
Require little or no physical space for inventory storage
Don’t weigh much, for lower shipping costs
Have potential for product variety in the future
You can always optimize and expand later, but the initial goal is bringing your product to market. Someone selling their photography and art prints is a perfect example of this.
If you have a quality camera or canvas, an eye for composition, and a passion for capturing the world, selling prints of your work can work well. You can sell multiple prints from one original, prints don’t require very much physical storage, shipping costs are minimal, and you’re the main driver behind creating new products. All of these factors make it easier to scale up your operations quickly.
That doesn’t mean you should skip making handmade products. You’ll just need to factor the time investment into your pricing and the pace at which you can make and sell your product.
Pros and cons of selling physical products
Getting customers onboard with your pricing and selling items can be easier with physical products. But physical goods come with more upfront costs than digital products, which can influence your profits.
Pros of physical products:
Relatively simple to price and sell
Often require less explanation or description
Can have a higher perceived value than digital items
Cons of physical products:
Requires more upfront investment to produce
Competitive online marketplaces
Tips for selling physical products
While you have more logistical tasks to figure out with physical products, there are ways to make storing, shipping, and managing your inventory more efficient.
Try print on demand. If you’re selling prints, clothes, or home goods, let a print on demand company handle production, storage, and shipping for you. This is also known as dropshipping products. You’re not charged until an item is sold.
Use third-party logistics (3PL). Print on demand is a subset of 3PL. But you can also send your handmade products to a 3PL company, which will handle inventory management and shipping so you don’t have to.
Customize your shipping. Set custom shipping rules for individual products, so checkout is simple and clear for customers who want shipping and in-person pickup options.
Offer subscriptions. Make recurring revenue and make inventory planning more predictable by setting up subscriptions to popular products. This is great for products that customers need regular restocks of, like coffee beans.
Import your products from other online marketplaces. Quickly populate your own website’s store and keep more of the profit by pulling in product details from another online shopping site. Squarespace’s Etsy product import tool automatically syncs your catalog.
Selling digital products
Digital products are virtual goods or services that can’t be shipped or held. Common examples of digital products and services are:
It can be easier for entrepreneurs to start selling digital products or services because the upfront cost is relatively low. It’s also easier to reach a larger customer base since you don’t need to worry about shipping items long-distance or internationally.
Pros and cons of selling digital products
Digital products and services require less upkeep for business owners. But it can be harder to sell products and services to customers who don’t know your product or business well yet.
Pros of digital products:
Fewer logistics to maintain
No shipping costs or restrictions
No storage or inventory management needed
Faster delivery and customer feedback
Cons of digital products:
More explanation required to make a sale
Can take longer to convert customers
Strong customer relationships are more important
May need to organize a class calendar and filming or appointments
Tips for selling digital products
The most effective way to manage your digital products and services is by using an all-in-one platform to streamline many of the moving parts and help you make your customers or clients feel cared for.
Use a self-scheduling system for appointments. If you need to meet with clients, save yourself time by letting them schedule their own appointment times. A scheduling platform like Acuity will come with automated confirmation emails and make rescheduling simple for everyone.
Show customers how valuable your content is. If you’re selling digital content, you’ll need to build trust in your expertise and voice with your target market. Share teasers of your content on social media platforms or give it exclusivity by putting it behind a paywall.
Take advantage of email marketing. Email marketing is a great way to build interest in your work, build relationships with clients, or share your latest products. Since people who sign up for your newsletter have to opt in, they’ll be an engaged audience.
Automate repeatable emails. Simplify your workflow by setting up automated follow-up emails or notifications for your clients or customers. This way they still get a personal experience, but you don’t need to manually write and send every email.
Learn how to sell digital products on Squarespace
Selling physical and digital hybrid products
Instead of only selling or the other, it’s worth exploring whether you want to sell both physical and digital products. The fundamental differences between digital and physical products make them complementary in a lot of ways.
For example, you could sell:
A digital course and physical course materials: For example, you could teach a jewelry-making class and sell kits of chains, beads, and other tools.
Gift cards for physical products: Give your customers the option to gift your products on short notice by adding gift cards to your online shop. They skip the shipping costs and wait time and potentially send a new customer to your store.
Digital downloads and one-on-one services: Someone may not be ready to work with you personally but still want to learn from you. You can sell ebooks or worksheets in your store to complement your services. For example, an interior designer could sell an ebook on styling your home or a financial planner could sell budgeting worksheets.
No matter what you decide to sell online, Squarespace has the tools to help you succeed.
This post was updated on June 20, 2023.