How to determine the cost to create your digital product?

Determine Cost

Your aim here is to determine if the cost of making the product allows you to make a profit. In other words, can you create, produce, and market a product and make a profile with consideration to what the customer is willing to pay?

The good news is that if you’re developing it at home, for example, in the evenings after work, there may be few overheads. You can also save money by promoting the product on social media sites, guest posting, and writing articles for industry publications.

However, as you begin to scale, which hopefully happens if the business kicks in, you’ll need to allocate some funds to the following areas:

  1. Advertising cost – the cost of ad campaigns for your product, for example, Google Adwords, Facebook Ad, as well as in newspapers, sponsored posts, or offline advertising.
  2. Distribution cost – if you’re selling digital downloads, such as online courses or ebooks, you’ll need someone to take the payments as well as help setup affiliate programs. The most popular include Clickbank $49.95 to setup plus percentages of each sale, EJunkie.com $5/month, Shopify, 1ShoppingCart, Digital River and a range of others.
  3. Production cost – how much does it cost to hire a software developer, graphic designer, voice-over artist for tasks that you may not be able to handle?

Of course, you may be able to do this yourself but the time, cost, effort and quality may delay your product development. In retrospect, trying to do everything myself just to save a few hundred dollars was a mistake.

For example, I got ALL the graphic design work for this site for less than eighty dollars on Odesk.com. If I tried to do this by myself (as I did in the past) it would have taken weeks and the results would have looked amateurish anyway. Now, it finally looks professional. I’m certain this helps sales.

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Acceptance Test Plan

Contingency Plan

Software Development Templates

Acquisition Plan

Conversion Plan

Software Requirements Specification

Action Plan

Cost Benefit Analysis

Software Testing

API Documentation

Database Design

Standard Operating Procedures (SOP)

Audience Analysis

Datasheet

Statement of Work

Availability Plan

Deployment Plan

System Administration Guide

Bill of Materials

Design Document

System Boundary

Business Case

Disaster Recovery Plan

System Design Document

Business Continuity

Disposition Plan

System Specifications

Business Plan

Documentation Plan

Technical Writing Templates

Business Process

Employee Handbook

Test Plan

Business Requirements

Error Message Guide

Training Plan

Business Rules

Expression of Interest

Transition Plan

Capacity Plan

Fact Sheet

Troubleshooting Guide

Case Study

Feasibility Study

Use Case

Change Management Plan

Functional Requirements

User Guide

Communication Plan

Grant Proposal

Verification and Validation Plan

Concept of Operations

Implementation Plan

White Papers

Concept Proposal

Installation Plan

Work Instructions

Configuration Management Plan

Interface Control Document

Software Development Templates

Acceptance Test Plan

Maintenance Plan

Software Requirements Specification

Acquisition Plan

Market Research

Software Testing

Action Plan

Marketing Plan

Standard Operating Procedures (SOP)

API Documentation

Needs Statement

Statement of Work

Audience Analysis

Operations Guide

System Administration Guide

Availability Plan

Policy Manual

System Boundary

Bill of Materials

Project Plan

System Design Document

Business Case

Proposal Manager Templates

System Specifications

Business Continuity

Proposal Template

Technical Writing Templates

Business Plan

Quality Assurance Plan

Test Plan

Business Process

Release Notes

Training Plan

Business Requirements

Request for Proposal

Transition Plan

Business Rules

Risk Management Plan

Troubleshooting Guide

Capacity Plan

Scope of Work

Use Case

Case Study

Security Plan

User Guide

Change Management Plan

Service Level Agreement (SLA)

Verification and Validation Plan

Communication Plan

Setup Guide

White Papers

Concept of Operations

Social Media Policy

Work Instructions

Concept Proposal

Contingency Plan

 

Configuration Management Plan

Conversion Plan