How to Start a Digital Dropshipping Business (2024)

Setting up an online store to sell digital products can be a profitable venture. You save on physical inventory storage costs and there is no limit to the number of sales you can make. But what if you’re not a creative and don’t want to sell digital products?

Digital dropshipping offers a solution – connecting you with artists, writers, and businesses for a mutually beneficial partnership. Read on to learn more about this business model and how to build a successful digital dropshipping business.

What is digital dropshipping?

Digital dropshipping is a business model that allows you to sell digital products created by others. You do not own the rights to these products; Instead, you enter into agreements with creators to offer their products on your store.

The term “digital dropshipping” is a bit misleading. Unlike traditional dropshipping, you don’t actually ship anything and typically don’t forward orders to third-party vendors. Most digital dropshippers sell digital products such as e-books, online courses or digital art.

Overcoming common challenges of digital dropshipping

Building a business around dropshipping digital products can present some sticking points. Here are some common problems that may arise:

License Agreements

With a traditional dropshipping business, you can use dropshipping websites and apps to access a large number of suppliers. A digital dropshipping company may need to sign agreements with individual developers and companies, which can be a time-consuming process. Entering into stable contracts can help you expedite this step.

Reliability of suppliers

One of the biggest benefits of digital dropshipping is that you don’t have to worry about delivering your own products. This also means that you have no control over the quality of your offers. Choosing trustworthy creators based on reviews can help you avoid this problem.

Build customer loyalty

When customers associate your product with your business, it can increase customer loyalty and create a lasting relationship that keeps shoppers coming back. However, with digital dropshipping, the products are not your own and are often branded by another company or artist. This can make it a little more difficult – although certainly not impossible – to create the same positive associations and win repeat business.

Promote your branding clearly through digital marketing strategies to ensure customers associate your name with the products they purchase.

Popular digital dropshipping products

You might be surprised at how big the market for digital offerings is. In 2020 alone, more than two billion people purchased at least one digital product. Do you want to build a digital dropshipping business? Here are some popular digital dropshipping products you can offer:

E-books

The e-book market is booming and is expected to generate global sales of $14.6 billion in 2024. Given the lower overhead costs compared to physical books—like storage space, shipping, and handling—ebooks are ideal for digital dropshipping.

Online courses

Online courses offer flexible, self-paced learning outside of formal educational institutions. Topics range from practical skills like woodworking to formal topics like programming to motivational courses on leadership. Whether you want to focus on a broad offering or focus on a specific category, online courses can be a profitable addition to your online store.

Digital artwork

Digital art – created with digital tools or digitized physical art – is extremely versatile. It can be used to spruce up digital spaces, including desktop wallpapers and social media profiles. Customers can also print and frame it to hang in a physical location. If you are interested in art and have a curatorial mind, selling digital art through digital dropshipping could be an ideal business.

Software licenses

Whether you’re targeting businesses or individuals, selling software as digital downloads can be a profitable business due to the high profit margins – often up to 75%.

Archive photos

Many companies find hiring a photographer costly and challenging and therefore choose to purchase image licenses from third-party providers. With billions of stock photos, a carefully curated photo library can appeal to discerning buyers – the challenge is reaching them with your marketing.

Music

The growing popularity of video editing for social media has greatly increased the demand for music, backing tracks, fun sounds, and other audio content that users can license for their projects. As with other downloadable products, audio files offer low overhead costs and can produce high profit margins with minimal delivery issues.

How to Start a Digital Dropshipping Business

1. Define your market
2. Find a supplier
3. Set up your online store
4. Market your products

When you dropship digital products, you avoid many of the logistical problems associated with setting up a brick-and-mortar store, but the process of starting your business is similar. Here are the basic steps to help you get started with digital dropshipping:

1. Define your market

Because there are so many digital products out there, it’s important to choose carefully what you sell. Depending on your capabilities, interests and expertise, you can choose to go broader or specialize in a specific dropshipping niche.

For example, if you are interested in wildlife and have contacts with photographers in the field, you can start a digital dropshipping business that sells wildlife photo licenses. As a contact point for specialist content, you can stand out from the competition.

2. Find a supplier

Research your chosen field to find developers and companies that would be happy to sell their products on your website. Look for providers that fit your store’s concept – whether it’s a specific e-book genre, a specific art style, or a specific type of software. To make sure you’ve found the right fit, request samples and read reviews.

Shopify Collective lets you sell in partnership with other Shopify brands. You can list items from a partner’s shop and they will take care of the fulfillment, be it a digital download link or course access.

3. Set up your online store

Create an online store to display and sell your digital products. There are several apps you can connect to your store to upload, sell, and deliver digital products directly to consumers, including Easy Digital Products (EDP), Filemonk, and SendOwl.

4. Market your products

Marketing strategies like search engine optimization, social media, and email marketing can help you reach your target audience and encourage repeat business. Since the products you sell may not contain your branding, make your business stand out through a unique and user-friendly website, quality customer service, and creative advertising targeted to your audience.