How to Sell Digital Products: The Complete & Ultimate Guide

Editorial Team May 08, 2019 12 min read

Online business with Digital Products are also rising day to day. Are you still wondering what digital product to sell and how to sell it? These types of products are tempting because they are more simpler to run compared to physical products. You don’t need to deal with the hassles of shipping and inventory.

However, just run for selling downloadable products online without a concrete strategy can hamper your sales. Selling online is much more than just uploading your products on your online store and expecting buyers to troop in. Many people make this mistake of running in without having clear understanding of how it works.

What is a Digital Products?

A Digital product is any form of products or services that involves electronic devices that you can sell to a customer or business online or offline.
Examples of digital products include e-books, music files, software, digital images, Web site templates, manuals in electronic format, and any item which can be electronically stored in a file or multiple files. Digital products may also be called electronic goods or e-goods.

Types Of Digital Products To Sell

There are different types of digital products available. Here are the popular types for online entrepreneurs:

ePublishing/eBooks – Selling information in digital books.
Online Courses – Selling information in protected content.
SaaS Products – Selling software products.

ePublishing/eBooks Market Growth

eBooks are the fastest growing digital product. According to the report of Statista, In 2016 the revenue growth was around $16 billion. Between 2016 and 2020, the compound annual growth is projected to be around 16%.

Overall growth between 2016 and 2020 is expected around 93% – making eBooks the biggest growth segment overall. Expected sales by 2020 is $29 billion.

Online Courses Market Growth

While the overall numbers for eLearning (corporate, universities) are increasing, in this report you will get the dismal growth in the self-paced eLearning market.

The following growth chart include retail packaged content, custom content development services, and authoring tools/platforms.

Software-As-A-Service (SaaS) Market Growth

Software as a Service is one of the trending digital products. The global SaaS market is estimated at around $78 billion in 2015 and is expected to grow to a $132 billion dollar industry in 2020 which is almost 69%.

Benefits of Selling Digital Products Over Physical Products

There are several benefits of selling digital products as against physical products and vice versa.

Physical products may be a strong market – and it is, just have a look at the growth rate for retail eCommerce online stores – but it’s troubled with a profit-killer that stops shoppers in their tracks.

The main barrier of growth rate of Physical products is Cart Abandonment. The largest influencer behind abandoned carts is forcing users to create an account to finish the checkout.

This factor is mitigated by digital products.

While taxes are still there, there’s no shipping cost involved with sending a customer eBook or workbook when it’s a file, and because you don’t require their address, it’s possible to eliminate the barrier of account creation altogether.

There’s also another factor to consider when it comes down to digital versus physical products:

You don’t need to insure digital goods. Warehouse insurance can get complicated, convoluted, and expensive quickly while leaving brick-and-mortar products out in the cold if those products don’t sell fast enough to make up the difference in expenses.

And even if you create or manage your products from your home and bypass insurance, you’re still at risk.

Another significant benefits of selling digital products over physical is the lack of middlemen.

And make no mistake: if you’re creating products to ship to customers, there’s going to be a middleman sooner rather than later.

And it has to be if you want to scale.

Which means once your business outgrows your office area, you have to think about shipping partners, manufacturers, and every other chain in the economy that will hook into your profits and drag them down.

That’s not happen with digital products.

Why Sell Digital Products Over Physical

High profit margin – Yes
Shipping cost – No cost
Shipping restrictions – No restriction
Storage space and cost – No
Inventory shortage – No

Why Sell Physical Products Over Digital

Faster to market, revenue
Less time resources
You get reorders
Not so much competition
Ideas can’t be easily copied
It’s easier to demonstrate the value

How To Sell Digital Products

You may have tried several times to sell digital products online and have failed. You are probably wondering ‘how to sell digital products’.

You can sell digital products directly from your website, blog, sales description page (provided by your digital delivery company), social media or anywhere. You can also sell through marketplace like Amazon.

Sell both direct and through a marketplace

This can particularly make sense in certain scenarios: for example, many video game creators aspire to sell through Steam, a major platform for gamer. However, a growing minority also sell directly to keep their independence, keep in touch with their audience, and make a lot more money per sale.

In this video, Introversion Software’s Mark Morris explains why he sells direct as well as through Steam. Introversion have sold more than 2 million units of their best-selling game Prison Architect:

Advantages of selling directly

keep more of the profits (usually between 90-95% versus about 50-60% for third party marketplaces)
It is possible to sell products in beta and offer free updates
you can keep in contact with potential customers and market to them more effectively (it’s much easier to sell to an existing customer than a new customer)
you keep your independence

Challenges of selling directly

you need a website, blog, sales description page or social media account
A digital delivery provider is needed to link with your payment processor of choice like PayPal, Stripe, etc, create a conversion-optimized checkout and securely and automatically deliver your product.
you stand or fall by the quality of your product and your marketing strategy

If you want to sell digital products successfully, you’ll have to follow these steps:

Find and position product/market fit
Tap into on-demand traffic
Offer a lead magnet
Offer a tripwire
Bring in your core product
Maximize customer lifetime value
Marketing automation

Find And Position Product/Market Fit

According to Tech, 80% of eCommerce startups fail and one of the reasons the failure rate is so high is because an eCommerce business can be easy to set up, for a small amount of money. You wouldn’t have to be part of that number if you ensure that your product fit the market needs.

Buyers don’t buy products, actually they buy outcomes. The promise of a feeling like I read your book, I am able to make $5000 dollars or feel like this way. If you find your product/market fit – you’ll be able to sell digital and physical products.

If you are going to sell digital products, the first thing you’ll have to do is find your product fit.

The best way to go about it is to look out for a product that has a demand in a growing niche. You also need to make sure that you can compete with current sellers of that product and actually sell.

Once you get it, you have found product/market fit. But it’s more than just finding it, you have to position yourself to potential customers that you have a product that fits their requirements.

That’s where your brand comes under the light. Your brand’s message should be clear on what your product offer to the user.

You also have to know about your customers. You can use a storyboard to achieve this. Map out a persona of your average customer and think about what they require and how your product fits that requirement. This gives you a clear angle to work with.

Generate On Demand Traffic

If you’ve your store already have SEO traffic, that’s great. On the other hand, if you just set up your online store, you’ll need to look at other sources besides SEO.

SEO is great but it takes time to come into action; it could be months before you finally get the number of visitors you need to view your products.

The best possible way to get on-demand traffic at the start-up stage is through:

Social media ads
Influencer/blogger outreach
Other online ads

You have to choose the right audience. To determine this ask yourself who are your average customers, what they care about, and social media platforms they frequently use.

As you get this down, also start working on SEO so that it walk along the way.

Offer A Lead Magnet

A lead magnet is offering of value in exchange for your potential customer’s information. When you offer ‘lead-magneting’, you are offering an immediate free value. Essentially, the goal is to get their email address and personal information as targeted leads.

A good example of a lead magnet is email marketing list. Don’t just say your visitors ‘subscribe to my list’. If you do that this will leave you high and dry.

You have to give them a free offer to show their eagerness. As a result they will want more of what you have. If you are selling an online course, you can offer a very short eBook for free that would put them on the path to wanting your course.

Offer A Tripwire

Tripwires are offers that are given at a very lower price. It includes giving a discount or showing a ‘best deal’.

Don’t think about how much you are spending right now. It’s more expensive to get a customer than retain.

Jeff Bezos once said ‘your margin, my opportunity’. So if you are thinking of your profit first without getting customers, you are only pushing your potential customers to competitors who are offering that trip wire.

A tripwire comes just after your lead magnet. When you have acquired new leads using your free offer, you can now warm a sales relationship with your customers through the tripwire. The aim of a tripwire is to convert a maximum number of your visitors into customers.

After new customers checkout, you can offer them a one-click upsell of your core product which is the next step.

Bring In Your Core Product

Your subscribers/visitors have gotten a taste of your lead magnet and tripwire. And you have built trust in them, it’s time to give them something more. This is where your core or main product comes in.

Your core product is your main arms. Although it sits at a higher price point than your tripwire, you don’t have to make a profit from them.

This is the mistake most of your competitors are making – trying to make profits from their core product offer, and you can leverage on this.

You are probably wondering if there is any point in the process where you can make huge profit. We are getting to that point.

Maximize Customer Lifetime Value

While most businesses are focused on the core product offer, smart and wild profitable businesses are creating funnels and increasing profit with value maximizes.

The goal here is to get more sales of your core product or an immediate sale of your second core product. Think of it as what you offer to immediately raise the transaction value.

An up-sell is getting more for a lower price product. It can be the same or a different product that’s related to the product they bought. For instance, McDonald’s core product is the hamburgers, but their up-sell is the fries and coke.

A cross-sell is offering a different types of product. The more related they are, the more chances of selling. If you’re selling an eBook for a business plan, your cross-sell could be a marketing eBook.

The good thing is that you can use more than one type of product, so think of what works best with your core product and offer it to customers.

Marketing Automation

The purpose of your marketing automation is to drive customers through your sales funnel. Convert visitors into customers and convert customers into repeat buyers.

Using email automation, you can notify your visitors/customers of new lead magnets, tripwires, core offers, and cross/up sells.

The common mistake some businesses make is sending offers only. You have gotten these visitors/customers, don’t lose them by throwing on their faces with sales content all the time. There should also be some mix of brand messaging in there.

Best Digital Products To Sell Online

Here are the list of digital products to sell. These are also the most profitable digital products.

1. eBooks

The most profitable digital products to sell online is eBooks. It is holding the first choice for many online store owner for so many reasons. They are relatively simple to produce. They are also simple to distribute via marketplace or self created online store.

Due to the popularity of e-readers, tablets, computers, and even mobile phones the popularity of eBooks has skyrocketed.

Self-published books are dominating the digital product market. People are getting tired to see the same books published by the same authors and are looking for some variety.

The main beauty of creating eBooks is that you can share almost anything you know in text form. You can also educate, advise, or curate existing content with an eBook to sell on your website.

2. Software

According to the report of Software.org software contributed more than $1.14 trillion to the total US value-added GDP in 2016 and employed 2.9 million people.

Software is a program that enables a computer to perform a specific task, as opposed to the physical components of the system like hardware. If you are a good developer or have good programming knowledge you can develop products like desktop software, web-based applications, templates, mobile apps, video games, or anything else powered by code.

With the popularity of WordPress, people are looking for customize plugins. You can also develop a suit of plugins as digital products to sell online.

3. Video

Video content has become a powerful tool to deliver information online and becoming an amazing digital products to sell online. According to the report of techcrunch, 8 billion video views per day on Facebook. So, it’s very clear to imagine why video is one of the best digital products to sell.

Video can be educational, informative, or entertaining. It’s significantly more engaging than text or word, and can be easily consumed by clicking a play button and watching. Users like to watch video and to some cases they are ready to pay for it.

There are lot of reasons to sell videos as digital products online. Here are some of them:

Video content is highly demand-able than other product that you can read and learn.
If you want to learn something that is totally new to you, in that case video content will be the best solution, because it attaches the visuals to the learning process.
There is no shipping cost and also no inventory is required. Also the risk is very low, making videos a great option for a beginner entrepreneur.

So if you feel comfortable with video, you can start online business with video contents.

4. Audio and Music

Audio is a powerful medium for communicating messages. There are many different types of audio digital products available. Some of them are:

Recorded lectures
Musical samples
Audiobooks
Foreign language lessons
Relaxing background noises
Karaoke versions of popular songs
Reusable sound effects
Full lyrical or instrumental music tracks

If you have passion in music you can distribute your music to platforms like Amazon or iTunes. For that, you need to establish your our audience. Create your own website and build your name via social media to reach reach a wide variety of music lovers. You can also share your music on social media platform that will help you boost your brand.

5. Photography

Photos are also a popular digital products to sell online. There is a proverb that “a photo speaks more than thousand words”. Most cases, photographers have a compelling story to go along with their photo. Like a physical product, the description of your photo gives you a chance to really sell someone on it.

If you’re a photographer, you can build stock photo sites by selling your images on your own website for the price you want.

An online store is a vital part of a photographer’s portfolio. You can raise your profile by showcasing your work beautifully. With competitive pricing, and good quality photos, it’s possible to do very well selling your independent or user demanded photos on your own website.

6. Graphics Design & digital arts

If you are a graphics designer, you are in a great position to start online digital products business. Nowadays people are getting crash on themes, patterns, brushes, wallpapers, logos, pretty much anything web related you can think of.

Themes are very popular for online business. Theme Forest is the pioneer for theme business. People have downloaded some themes thousands of times with the price range between 14-30 dollars. There are over 1000 WordPress themes available.

If you are an artist, you can can sell finished pieces, drawings, and sketches. Original art with exceptionally good quality can be priced higher than graphic design.

7. Templates

Templates allow you to use your powerful brain and precious time for things other than set-up and formatting. You can create and sell different types of templates for a variety of uses: resumes, media kits, logos, and social media posts. Social media templates are very popular for online business. Templates can be created with Adobe Photoshop, Illustrator, etc.

8. Online courses

Online courses or tutorials is an industry rich in innovation, and is growing with unprecedented momentum. With the help of e-Learning traditional educational institutions explore new ways to make their content available to learners.

Most popular online courses that are people seeing now-how to earn money online, or how to start blogging to earn money. It’s true that there are plenty of courses available on those topics, you can be successful with an online course in any niche!

You can sell an online course on just about any topic as long as you are providing correct information and teaching something that is useful to audience.

Tutorials and courses can be recorded on video or in audio format or written lessons or a combination of all three.

9. Recipes

Recipes can be the valuable digital products to many people not only to housewives. If you have a blog site of food, you can utilize this option for business.

Say you have passionate on bakery and also know some recipes, just make a website and sell the recipe to restaurants, bakeries, and cuisine magazines. You can choose instagram as a social media for marketing purposes and share links to recipes of your online store.

10. Tickets

Tickets are very commonly sold items in online stores. You can sell tickets for every kind of performance, from comedy shows to wrestling.

If you are connected with organizer, tickets are a great digital product to sell online.

Top Tools For Selling Digital Products

When selling digital products online, you’ll need an eCommerce platform, research tools, marketing tools, analytic tools, and accounting tools. While there are so many eCommerce platforms, for digital products, you’d only need a fraction.

Ecommerce Platform/Online Store

You can either sell on a marketplace like Amazon or integrate a cart to your website. There are also few tools that help you send to different platforms from one space. To sell your products digitally, you need to accept payment and grant access to your content, app or download.

Top eCommerce platforms for general digital products are:

WordPress (WooCommerce + Dokan) is a great platform for selling digital products. These eCommerce platforms are used for more than one type of digital downloads. You can also sell digital downloads with WordPress.

Marketing Tools

Read More: Best email marketing tools

Start Selling Digital Products

Selling digital products doesn’t have to be a struggle. Just choose the right product, platforms, and marketing offers for your customers. Also, strategically invest and spend more to gain more. “The more sugar, the more sweet”.

It takes time and resources to generate real passive income, but it can be done.

Editorial Team