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How To Start A Business (Series) – Physical Products, Digital Products or Services?

The global entrepreneurship scenario has expanded to include multiple novel opportunities since the start of the 21st century. Currently, entrepreneurs aiming to start a business have a wide variety of options regarding the type of products or services they can focus on for their business. Although different divisions and categorizations for such products exist, the basic division makes it three-fold: physical products, digital products, and services. Here, we will discuss all three of these categories' pros and cons to determine which category best suits the entrepreneurs today.

Physical Products

The physical products or goods market never goes out of season. Why? The main reason is that there are still numerous products that can only be sold in the physical dimension. For instance, it is impossible to sell digital food. However, the current popularity of e-commerce suggests that these physical products can be sold to a wider market from the ease of the seller's armchair using online selling methods.

For a new business, physical products are seen as the safest option. The sector has a large variety of options for the entrepreneur to consider producing. Additionally, there are still more customers of physical products than digital products. An added benefit here is the integration of physical product sales with the internet. Thus, selling physical products today is cheaper, more profitable and convenient than ever before. Non the less, there are certain drawbacks of sticking to physical products. The constantly growing popularity of digital products suggests that they are gaining a more of market. Physical products are likely to have fierce competition and may provide very few opportunities to ensure that your product stands out from the rest of the competition.

Digital Products

Digital products are products that are used in virtual form and seldom have a physical existence outside of its host technology. A very simple example here is selling ready-made software or a plugin for WordPress development.The main benefit of focusing on digital products, is the endless possibilities for innovation, making it is more likely you will stand out from the rest of the competition. The market is also rapidly growing, with demand for digital products being at an all-time high currently. Digital products can also be customized easily and do not have the added costs of manufacturing like the physical products. As a result, production costs tend to be lower.

However, these products can require high levels of expertise. It would helpful if you had a skilled team, an excellent idea and perfect execution to ensure that your digital product gets a decent amount of sales. Competition in this sector is growing, this means that within the digital products market, you are likely to face globalized competition. This aspect means faring off against global giants in your industry. Lastly, piracy and security are major issues with digital products, and the black market is active in their illegal distribution. Thus, you may never get the due sales for a product that you launch.

Digital Services

Digital services, such as freelancing your digital skills, is a roaring market today. Many entrepreneurs establish note worthy businesses, focused on providing these digital services.

The most important benefit of digitalized services is access to the global market. For example, you may not have many people in your local area who need your website development skills. However, within the global market, you can have consumers visiting your website from around the world, thousands of people are looking for excellent website development skills every day. Secondly, the input costs of digitalized services are extremely low. All you need is your labor, your computer, and your platform.

Establishing a brand and a noteable business identity in such an online environment can be difficult. It may take years of hard work and hundreds of projects before people start to recognize your skills. Additionally, you may need to wait some time before your first few orders come in, as you may not have proof of quality establish yet.


All three types of products have their fair share of advantages and disadvantages. In the end, quality is king! So simply select the product you can produce the best.

To talk to someone regarding your entrepreneurial ideas, feel free to book a free business consultation meeting. Sometimes it's just good to talk.


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