Starting a Business: Do You Sell a Product or a Service?

Updated on January 17th, 2022

When starting a business, you have a lot of decisions to make. One of the first things you need to decide is whether you want to sell a product or a service. As a freelancer, I sell what is considered a service. Others I know involved in ecommerce choose to sell products. What you decide to do when starting a business depends on your own strengths, as well as your preferences.

Selling a Product

Selling a product can result in more work. Whether you choose to go the drop-shipping route or stock your own items, there are a few hoops you need to jump through. You are ultimately responsible for your products, and figuring out where you will get them.

When selling a product, you need to be able to manage inventory — or at least find a drop-shipping partner that you can rely on. You will need to refine your product offerings, and make sure that you have good descriptions and a website that is properly supported. Don’t forget about ecommerce carts and other automation items that can help you run your business smoothly.

There are plenty of people that make a solid living selling products. I know several ecommerce owners who sell products and do very well. However, you have to be aware of the logistics involved, and be willing to jump through some of the hoops. Plus, if you stock your own inventory or create your own products, you might need to be ready for upfront costs, like buying items to sell and warehousing them.

Selling a Service

Starting a business with a service can, in some ways, be easier. If your service is something like writing, it’s pretty easy to get started. All I needed when I started as a freelance writer were an Internet connection, computer, and ability. All of these items were built in to my life already, so it wasn’t a problem for me to find work.

Other services might not be as simple. Online services, like graphic design and web development, can be a little easier to start than offline services like dog walking and beauty services. Depending on where you offer your services, you might need large upfront capital to make it happen. Working out of your home often means lower overhead costs, if you can swing it.

Product or Service: Getting Paid

One of the nice things about selling products is that you often get paid before you send the product. With services, you often have to wait until the work is completed. There are ways to get paid upfront as a freelancer, or to complete other services, but in many cases, customers and clients expect to pay for a service after the fact, but they expect to pay for a product before they have a chance to use it.

It’s also important, no matter which path you choose when starting a business, to build your reputation. In order to be successful, no matter what you decide to sell, your customers and clients need to trust you.

Miranda Marquit

Miranda Marquit

I'm Miranda and I'm a freelance financial journalist and money expert. My specialties are investing, small business/entrepreneurship and personal finance. The journey to business success and financial freedom is best undertaken with fellow travelers.

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