The important difference between selling and earning
2 min read

The important difference between selling and earning

I only recently realized an important difference between selling and earning. Keep in mind that I studied economics, worked in strategy consulting and built up multiple businesses in the past. So I believe this difference is easy to overlook.

Selling an earning happens at different points of value creation. Selling happens before the value is delivered. This used to be a requirement for physical products that took substantial resources to produce or to procure. So the seller had to make a promise, do the sale, and only then deliver the goods or services.

Earning on the other hand happens after the value is delivered. We know this from earning a salary. The work gets done and at the end of the month, you earned the payout. As digital goods have no marginal costs to duplicate, there is no inherent requirement to sell them. Instead, financial remuneration can be earned.

Why selling feels uncomfortable and earning feels great

This difference in timing could explain why many people perceive selling as uncomfortable and earning as great. When making a sale it creates an obligation on the side of the seller to deliver on the promise. This can feel awkward especially for people that are generally modest or insecure about the nature of a value transfer. Earning on the other hand happens at a point in time where the value is already delivered. This will typically create an obligation on the side of the receiver to now share a part of the value. This feels great for the side of the person earning.

The marginal cost—the cost added when producing one additional unit—for digital goods is negligible and often virtually zero. This means that knowledge entrepreneurs have a choice whether to build up their economic engine focused on earning or selling or anything in between.