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"Though I haven’t acquired anything yet (I have my eye on a few), the return on those funds will be much higher with a software product or SaaS website" so he'

by herval 18y ago

"Though I haven’t acquired anything yet (I have my eye on a few), the return on those funds will be much higher with a software product or SaaS website" so he's basically assuming 'digital' is better because your experience with 'physical' didn't sell enough? What about thousands of purely digital sites out there that don't sell anything? Would that disprove the comparison in any way? imho, the assumption that the margin is higher on digital ignores one simple fact: most 'digital products' on the web are free anyway...

brc 18y ago
No, digital is better because you own the IP, the distribution and take home almost 100% of the gross. Returns are not a factor because there's no physical product to worry about. He is sharing the bulk of the revenue (40%) with the dropshippers, and if he didn't do that, he'd tie up a lot of capital in inventory and warehousing, plus have to pack and ship orders. None of these are problems with a digital business.
- netsp 18y ago
  pigs are better then cats I don't mean to be snarky, but any comparison between digital and physical products that's weighing them up in abstract is just silly. There are good and bad business models doing either one.
- rs 18y ago
  But doesn't digital products actually have an initial development cost that can be really expensive (depends on what you're building) ? Yes, you do (most of the time) take in 100% of the revenue, but you need to allocate some of that back to the development cost, no ?
- herval 18y ago
  you can also own the IP on physical products. Or you can work with digital stuff you don't fully own (licensed bits and pieces, third-party software)... and don't forget you're sharing revenue with Google when you get your hard-earned 30 bucks a month in adsense. And with Amazon, when you get referrals. And so on, and so on..
viggity 18y ago
From reading his previous posts, it sounds like he has already purchased 10 products, including DotNetInvoice. (http://www.softwarebyrob.com/2008/10/03/should-you-build-or-buy-your-micro-isv/ http://www.softwarebyrob.com/2008/10/03/should-you-build-or-...) What he should have said was "I haven't acquired anything new yet"

by herval 18y ago

brc 18y ago

No, digital is better because you own the IP, the distribution and take home almost 100% of the gross. Returns are not a factor because there's no physical product to worry about. He is sharing the bulk of the revenue (40%) with the dropshippers, and if he didn't do that, he'd tie up a lot of capital in inventory and warehousing, plus have to pack and ship orders. None of these are problems with a digital business.

netsp 18y ago
pigs are better then cats I don't mean to be snarky, but any comparison between digital and physical products that's weighing them up in abstract is just silly. There are good and bad business models doing either one.
rs 18y ago
But doesn't digital products actually have an initial development cost that can be really expensive (depends on what you're building) ? Yes, you do (most of the time) take in 100% of the revenue, but you need to allocate some of that back to the development cost, no ?
herval 18y ago
you can also own the IP on physical products. Or you can work with digital stuff you don't fully own (licensed bits and pieces, third-party software)... and don't forget you're sharing revenue with Google when you get your hard-earned 30 bucks a month in adsense. And with Amazon, when you get referrals. And so on, and so on..

viggity 18y ago

From reading his previous posts, it sounds like he has already purchased 10 products, including DotNetInvoice. (http://www.softwarebyrob.com/2008/10/03/should-you-build-or-buy-your-micro-isv/ http://www.softwarebyrob.com/2008/10/03/should-you-build-or-...) What he should have said was "I haven't acquired anything new yet"