Digital Products 101: What They Are and How to Sell Them

Are you thinking about creating a digital product?

Maybe you want to monetize your blog.

Maybe you want to start a side hustle.

Or maybe you have a fully-fledged business that you want to grow further.

From knitting patterns that cost a dollar or two, to online courses that cost hundreds or even thousands of dollars, digital products are fantastic revenue generators for many different businesses.

It’s easy to see why.

Digital products have low overheads. They’re often cheap to create — and you have to deal with the headaches of shipping and fulfillment.

Digital products can, and will, sell while you’re asleep. You could wake up to find hundreds or thousands of dollars in your bank account from product sales. Your customers will watching your course videos or read your eBook without you needing to do anything.

Sounds good? Almost too good, right?

Well, that’s because the gold mine of digital products can be tough to crack. If you want to view our process, click here. But by understanding what digital products are, how to create them, and how to sell them, you’ll be well on your way to profiting from them.

Let’s dive in.

What Are Digital Products And How Do I Sell Them?

Digital products are products that people pay for and access online, either as a download to their computer or through a website. They exist entirely as computer data: nothing physical changes hands.

Let’s quickly distinguish between digital products and digital services:

  • Digital products almost always have a one-off cost; digital services may have a recurring cost (e.g., a monthly subscription to Netflix).
  • Digital products can be truly passive income: you can create them once and sell them for years to come, all without investing any more time into them (apart from, perhaps, some marketing). Digital services will require some kind of ongoing time investment.
  • There’s normally no limit to how many copies of a digital product you can sell. With digital services, you may have a cap on how many you can provide — e.g., if you run a live online course, you might only take 20 students each year.
  • While there’s a lot of overlap between digital products and digital services, we’re going to focus on creating and selling products.

Some common types of digital products include:

  • eBooks
  • Online courses (pre-recorded rather than live)
  • Apps for Android or Apple devices
  • Patterns or blueprints
  • Digital art
  • Audiobooks
  • Workbooks
  • Printables
  • Stock photos, music, or video
  • Tutorials or guides
  • Templates – e.g., Canva templates, WordPress themes, Notion templates
  • Software (though software is increasingly being provided under a “SaaS,” or “software as a service” model)

Here’s a quick example of a digital product (and a shameless plug :-)):

How to Build a Profitable Personal Brand From Scratch, Leverage Creative Group.Profitable Personal Brand

 

Our eBook. We sell this digital product through our website, sharing our very best strategies for building your brand and growing your audience — all for just $27.

As with many digital products, this eBook has a special sales page on our site, where we include details about the book, testimonials from happy customers, and a clear call to action.

How to Create Digital Products

Different digital products are created in different ways. Knitting patterns, eBooks, and course videos all require different tools or expertise — and we’ll get to some of those later.
With almost all digital products, though, you’ll need to go through the same broad creation process.

Step 1. Come Up With Several Different Ideas for a Digital Product

Maybe you’re brimming with ideas for a digital product.

Maybe you know you want to make something but you don’t have a clue what.

So what are the best digital products to sell online?

The best digital products are the ones your audience wants — and that you do a great job with. To come up with ideas for them, try:

  • Researching other digital products in your niche, if you already have a website or business.
  • Brainstorming digital products that would fit in with your existing products/services.
  • Identifying questions people often ask you (or often ask in general about your niche).
  • Examining best selling digital products and asking yourself how you could do something even better.

Try to come up with at least three different ideas that you’d be excited to create.

We go deeper into these points in our post on our digital product creation process.

Step 2. Find Out What Your Audience Most Wants

Once you have some ideas, it’s time to survey your audience to ask which they’d like you to create.

You might also want to ask about pricing: would they rather have a cheaper, more limited product, or a more expensive but also more comprehensive one?

One of your ideas might prove far more popular than the others. If so, that’s the one to work on. If they’re all popular, pick whichever one you like best, or whichever you can finish quickest.

One caveat here: Sometimes what people tell you they want is not what they’re willing to pay for, so running a survey with a commitment (either to beta test the product or pay for the first version) can give you better results. If you don’t want to do one of those, then be sure to understand the ‘why’ behind the survey answer and you might find that the pain point would be best solved in another way – that’s where your expertise comes into play.

Henry Ford said it best: If I would have asked people what they wanted, they would have said faster horses.

Step 3. Create an Outline or Framework for Your Digital Product

Excited to dive into recording videos, writing pages of material, or shooting photographs?

Stop.

Before you go further, you need an outline or framework for your digital product. That’ll help ensure you create all the different elements you need — and they’ll get your end user from where they are to where they want to be by the end of the product.

If you’re working on an eBook, you’ll want a chapter-by-chapter written outline. If you’re creating a piece of software or a website, you might come up with a wireframe. For an online course, you’ll need a list of lessons.

Spending a bit of time getting your outline or framework right means saving a lot of time in the next couple of steps.

Step 4. Make the First Iteration of Your Digital Product

This is the big one: it’s time to create the first version of your digital product.

With software, that could be a “minimum viable product” that works, but lacks all the extra features you’d like to add. For an eBook, it’ll be a first draft. With a video, it’s likely to be a very rough cut.

Decent digital products can be created in a day. But most great products will take a lot longer. It’s like the great songs that you’ve heard were written in 15 minutes — they are the exception, not the rule. Most great works take a lot of time.

To get your digital product finished, you’ll need to proactively carve out time. Find a deadline and keep it sacred. (By the way, if you’re writing an eBook, you might want to check out this post by Jerry Jenkins.)

You’ll also need to make sure you have the equipment and environment you need for high-quality creation: if you’re recording video, for instance, you’ll likely need to do that when the house is quiet, or even in a soundproofed room. At the very least, give your dog a chew toy that DOESN’T have a squeaker…

Plan ahead for product creation sessions, so you can pull your material together as efficiently (and enjoyable!) as possible.

Step 5. Get Feedback on Your Digital Product

Once you’ve got a rough version of your digital product — and you’ve done a quick pass-through to clear up any glaring mistakes or bugs — it’s time to get feedback.

In software, we call it a beta test.

Your audience members are a great source of feedback, especially those who voted for this product option in your survey. Offer a free version to them and encourage them to let you know what they like and what needs improving.

Step 6. Incorporate Feedback and Make Changes to Your Digital Product

Now that you’ve got some feedback, it’s time to make changes. Usually, it makes sense to fix big-picture problems first (e.g., one of your videos had terrible sound quality and needs re-recording) before you turn to minor problems (e.g., there’s a typo in one of your subtitles).

Step 7. Address Design and Style Issues

Even if your product is working fine, you’ll likely still need to do some work before it’s ready to sell.

Does your product look great? Is it going to create a polished, professional impression?

For your product to really impress, you’ll need to do things like:

  • Get an eye-catching cover for your eBook
  • Add intro/outro music to your videos
  • Get a UX designer to make your app’s buttons are irresistibly clickable

… and so on.

These small changes won’t affect the functionality of your product, but they can have a big impact on your customer’s experience.

Step 8. Turn Your Digital Product Into the Right Format for People to Use It

You’ve written your eBook in a Google Doc, but you want to sell it as a .pdf.

Or you’ve created your video in Camtasia, but you need to export it as an .mp4 to upload it to your online course website.

Whatever your digital product is, you’ll likely need to convert it to its finished form.

This is usually straightforward, but make sure you allow sufficient time for this step. You may find you need to make tweaks to the original file for it to look exactly how you want after conversion. With large video files, the conversion or export process can take quite a bit of time to run.

If you can’t figure out how to do it, hire out someone who can. Try upwork or fiverr, for instance.

Digital vs. Physical Product

Digital vs Physical Product

Are you torn between creating a digital product and a physical product? Or perhaps you’re thinking about offering both?

It’s certainly possible to sell digital and physical products. Full Focus (formerly Michael Hyatt & Co) does this, offering several online courses as well as a range of physical products, such as planners and journals.

So how do you decide whether to create a digital or a physical product? Here are a few questions to ask yourself:

  • How experienced am I with creating products? If you’ve never created any kind of product before, it makes the most sense to start with a digital product. Your upfront costs are likely to be much lower – meaning that if your product doesn’t work out, you’re not likely to lose a lot of money.
  • Where will I store physical products? Some product creators don’t need to keep any inventory or handle shipping. Instead, their products are printed on demand and drop-shipped straight to customers. You’ll likely find that you can make more profit by creating physical products in bulk — but this means arranging somewhere to store them.
  • Will my audience buy physical products from me? Your audience may prefer digital products, perhaps because they don’t want to wait for your product to ship, or because you can provide the digital version much more cheaply. If you’re selling eBooks, for instance, you may find it isn’t worth the time and cost of creating a print version if a low portion of your audience will want it. We tried this recently with a brand doing over 7 figures in digital product sales. We figured since people bought digital products from him, they would love to buy physical products as well. The sale completely flopped.
  • Has my audience been asking for a specific physical product? Some audiences will be hungry for particular physical products. That could be merch with your logo on, if you run an entertainment brand, or products that fill a particular need for them. If you’re getting requests for a certain type of product, or a physical version of a digital product, consider creating it.
  • What are the most popular digital products in my niche? If there don’t seem to be any digital products at all, or they appear not to be selling well, then perhaps your niche would suit a physical product better. If there are popular products but you can’t create something similar — e.g., they’re all software, you’re not a developer, and you can’t afford to hire one — then again, it might make sense to turn to physical products.

Many businesses, small and large, successfully make money from selling physical products online. But if you’re just getting started, you’ll likely find digital products the best way to begin.

How to Sell Digital Products Online

After weeks of hard work, your shiny new digital product is ready.

There’s just one problem.

How do you actually sell it?

It’s easier than ever to sell digital products, with lots of software and tools available to help you get your product seamlessly into the hands of customers.

Essentially, you need to be able to:

  • Take payment from your customers
  • Automatically deliver their digital product

You can either do these things through your own website, using a tool like WooCommerce or Payhip, or you can sell through an online marketplace that specializes in your type of product — like Amazon (for eBooks), Turbosquid (for 3D art), or ThemeForest (for WordPress themes).

We’ve developed our own product delivery system, for instance, but there are several out of the box options that you can try.

You’ll also need to:

Getting these things right will help you make more sales, and we’ll get to them in a moment. First, let’s take a look at some great tools and software you can use to sell your digital products.

Useful Tools and Software for Selling Digital Products

WooCommerce

(free, with many paid add-ons available)

WooCommerce is a free WordPress plugin that you can use to create an online store that sells digital (and/or physical) products. For more advanced features, like the ability to create money-off coupons, you’ll need to pay for one of the many WooCommerce premium add-ons that are available.

Shopify

(from $29/month, 14-day free trial available)

If you don’t yet have a website and want to set up a simple online store, Shopify is a good option. It doesn’t offer the flexibility of WordPress, but it’s easy to use for beginners. As with WooCommerce, you can use Shopify to sell physical products as well as digital ones.

Gumroad

(no monthly fee; charges up to 9% per transaction, plus 30¢)

Gumroad is a hugely popular digital product marketplace, and you can also sell digital products there. It’s free to get started with — and the more you sell, the less you pay per sale. There are no monthly plans, so you get access to all the features straight away.

Payhip

(charges a percentage per transaction, or you can opt to pay a monthly fee)

Payhip hosts your products and can be used as a shopping cart service directly on your own website, making the checkout process seamless. You can use it to sell any digital product, and there’s also a courses feature so you can host a course on Payhip — however, this does cost $9 a month if you want to host your course videos on Payhip’s servers.

E-Junkie

(from $5/month, 30-day free trial)

Like Payhip, E-Junkie lets you host and sell digital products. You pay a flat monthly fee, regardless of how much you sell — making it great value if you have a medium to high volume of sales. You can run an affiliate program, take coupons, and even sell offline with unique download codes.

Easy Digital Downloads

(free, or get a “pass” that includes lots of extras from $99.50/year)

Easy Digital Downloads is a WordPress plugin that does what you’d expect from the name: it makes it easy to sell digital downloads! It offers features like file protection and discount codes, as well as the option to accept credit card payments using Stripe. For more advanced features, you can buy individual extensions or pay for an annual pass that gives you access to multiple extensions.

Teachable

(charges per transaction, or you can pay for a plan that offers more features and lower/no transaction fees)

Teachable lets you easily create and sell online courses. It’s become a very popular course platform, so there’s a good chance your audience members are already familiar with how it works.

ClickBank

($49.95 activation fee; 7.5% + $1 transaction fee)

ClickBank offers a range of e-commerce tools to help you sell your digital products online, and you can use it for physical products, too. It’s also a very popular affiliate marketplace, making it a great option if you’re keen to market through affiliates.

Creative Market

(40% transaction fee)

Creative Market is a great place to sell graphics, templates, fonts, photos, and other visual digital products. You need to apply to open a shop, as Creative Market vets their sellers. It’s free to list products, but they take a hefty amount of commission: currently 40% of your product’s sales price.

Final Steps for Selling Your Digital Product

You want your digital product to actually sell — you don’t want to just put it online gathering cyber dust. This means you should:

1. Choose the right price for your digital product.

We covered this at length for you here because pricing a digital product can be incredibly tough.

If it costs you next to nothing to deliver your product, you could price it at $5 or $500 — and still be profitable. You need to find the “sweet spot” where you’re maximizing your income — where raising your price would mean losing out on too many sales.

To complicate things even further, you might find that charging a lower price for one product means you make more money overall — as you bring more customers into your sales funnel and sell more expensive products further down the line.

Many digital product creators end up tweaking their pricing over time. To set your initial price, look at other similar products and charge around the same amount. You could potentially make your product a bit cheaper to undercut your competitors, or more expensive to position it as a premium product in the marketplace.

2. Create attractive images for your product and sales page.

Your product needs to look great. You can use tools like Canva to create product images — and you may want to invest some money in hiring a designer.

Even if you don’t have a budget for images, you could use:

  • Screenshots
  • Short videos demonstrating your product
  • Photos of you or customers alongside testimonials

Obviously, high-quality images are particularly crucial if you’re selling a visual product, like templates, stock photos, or fonts. Images are important even for non-visual products like eBooks, as a great-looking cover helps give customers confidence in the quality of the product itself.

3. Create a sales page for your product.

If you’re selling your product through a third-party marketplace, you might be limited to images (or perhaps just one image), plus a description.

If you’re using a plugin like WooCommerce to sell on your website, your product might have an image and a short description in your store.

But in many cases, you’ll have a full sales page on your website for your product.

This should be clear, attractive, and do a great job of telling potential customers about all the benefits of your product. It also needs to tie in with your company brand — for instance, you don’t want to have a sales page that comes across as really pushy if your brand is very calm and laid back.

4. Get testimonials or reviews for your product.

While you can launch a new product without any testimonials or reviews, it’ll help your sales a lot if you have at least a few.

Testimonials are nice things that customers (or beta testers) have said about your product. Don’t have any yet? Use testimonials about you or your company in general.

Reviews tend to be more balanced and impartial — but of course, you want as many good ones as you can get. If customers mention how much they’re enjoying your product, make sure you encourage them to leave a review.

Selling Digital Product

Take Your First Steps Toward Selling a Digital Product

Could a digital product make all the difference to your business?

Start looking around at other digital products in your niche. What seems popular? What could you do better with or offer your own unique twist on?

Come up with some potential ideas to explore, and then narrow these down to present your best ideas to your audience. You could be underway with your digital product before you know it.

To get all our best tips on creating a digital product that actually sells, check out our personal branding guide. It’ll also help you create your brand identity, identify your ideal customers (and what they want), and more.

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