Digital dropshipping brings a slew of benefits over its physical counterpart. First and foremost, you save on storage and shipping costs, as digital products are stored and delivered online. This leads to higher profit margins. Furthermore, delivery of digital products is instant, which means happier customers. There's also less hassle with returns and refunds as there are no physical items to deal with. However, there are a few challenges as well. Digital products can be more susceptible to piracy, and ensuring secure delivery can be tricky. Furthermore, the digital goods market can be highly competitive, and creating a standout product might require specialized skills.