Three Biggest Mistakes Made by Merchants Selling Digital Goods
From my perch atop the Crain's Building in Chicago, I often am asked for advice on selling digital goods, like software, SaaS, virtual products, ebooks and more. While each of these sub categories of digital goods are unique in its own way, there is some commonality across them. And as a merchant of these types of products there are three basic mistakes you need to avoid.
Global E-commerce Mistakes
What I find again and again, as an American, is how little thought or respect is given to the concept of selling globally. The narrow view is that consumers not only can, but will want to see an English language cart, and pay in US dollars with a credit card.
While this is true for a good percentage of the global population, not only will you find higher conversion rates by accepting other currencies, putting marketing material in non-English languages and offering preferred local payments, but the perception of your organization will be more local as well.
This expectation for a quick and speedy delivery of products bought online is different now than it was 15 or even 10 years ago. Nowadays,the normal expectation for online shopping is at a higher level, especially with purchases of digital products.
For example, when I buy shoes online from Zappos.com I expect the shoes to arrive within a few days.
When I choose to buy a movie through TiVo from Amazon, I have to wait at least 30 minutes to start the movie and often longer.
But if I buy an eBook through Amazon’s Kindle or the Barnes and Noble Nook, I expect the book to be available for download immediately.
In each of these three cases, the expectation of "speedy" delivery ranges from a few days to instantaneous. Many people forget this fact when entering the digital goods world and they may be stung by the backlash if the customer's expectation is not met.
Just look at the social network Friendster, which did not technically sell digital goods, but was effectively killed by slow loading times, thus not meeting customer expectation of immediate delivery.
Whether you are selling eBooks, Software or virtual goods, fighting fraud is like being on a treadmill that starts fast and gets faster. The never-ending war against fraud is made more difficult because these digital goods do not rely on a physical address for shipping, which deprives the merchant from a piece of knowledge that offers a strong clue as to the validity of the customer.
With digital goods, due to the expectation of immediate delivery we mentioned earlier, the digital good are delivered before the charge ever appears on the customer's credit card, bank account or PayPal statement.
Even if a vigilant account owner has email alerts of new activity, the product is sent to the customer before that email notification is even delivered. If the charge is in fact fraudulent, the customer may be forced to stick the merchant with a chargeback (this is one of the reasons that card not present transactions have a higher cost per transactions than card present transactions in a store).
Although there are some scary aspects of selling digital goods, with some foresight and research, merchants can be sure to make their business a success. Just don’t underestimate some of the risks associated with selling digital goods.
What are some of the mistakes you have learned to avoid in the digital e-commerce space?
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