Selling Digital Products: The Detailed and Easy To Use Guide
Digital products are intangible. You cannot touch or taste them, but they are one of the best selling products out there. Digital products can be composed of software code, text, audio and/or video.They are so profitable that the worlds top companies make them. In fact, many of the top billionaires in the world are involved in selling digital products.
Aspiring digital products billionaires can even start their business right in their own bedroom or even dormitory with practically little to no cost at all.
If you are now interested in selling digital products, this is a detailed but easy to understand guide on how to become one:
Note: This list was taken from my actual experience, professional studies and online websites about the digital products business.
Summary of The Detailed and Easy To Use Guide on Selling Digital Products:
1. What is a Digital Product?2. Pros and Cons of a Digital Product?
Pros:
2.1.1 They are cheap to produce, maintain and deliver
2.1.2 High Profit Margins
2.1.3 Full Automation Probability
2.1.4 Flexible Pricing
2.1.5 Flexible Format
2.1.6 Global Reach
Cons:
2.2.1 Overwhelming Competition
2.2.2 Piracy and/or Theft
2.2.3 Restrictions by Selling Platforms
3. Digital Products You Can Profitably Sell Online
3.1 Text
3.2 Audio
3.3 Videos
3.4 Code
3.5 Images
3.6 Digital Licenses
3.7 Membership/Subscription
3.8 Task Based
4. How You Can Create Digital Products
4.1 Plan First
4.2 Market Research
4.3 Find Proof
4.4 Take Action and/or Sell
4.5 Create a Blog, Website and/or Online Store
5. How To Sell Digital Products
5.1 Make a High Quality Product
5.2 Have a Lead Magnet or a Freemium Model
5.3 Have an Affiliate Program
5.4 Social Media
5.5 Collect Pre-Orders
5.6 Crowdfunding
5.7 Offer Money-Back Guarantee/Warranty
Final Words
The Details:
1. What is a Digital Product?
Digital products are intangible. You cannot touch or taste them, but there are digital products that you can see and/or hear. Digital products can be composed of software code, text, audio and/or video.
Digital products reside on smartphones, smart devices, computers, servers and digital storage devices like hard disks, CDs, DVDs, diskettes and so on.
We interact with digital products all the time. The apps on your smartphone, your podcast audio and music audio are all digital products. The contents of websites are also an example of digital products.
The software installed in your laptop as well as all the downloadable digital files found on it are all digital products. In short, digital products are any digital item that are bought and/or sold.
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2. Pros and Cons of a Digital Product?
Pros: What could be good reasons to sell digital products as against physical products?
2.1.1 They are cheap to produce, maintain and deliver.
2.1.2 High Profit Margins: You would only spend money producing the first copy of the digital product, after this, all the succeeding copies can be produced, maintained and delivered at practically no cost. Your selling price is almost your profit for each copy.
2.1.3 Full Automation Probability: Since all digital products reside on digital devices, it is entirely possible to fully automate your entire digital products business.
2.1.4 Flexible Pricing:
Since digital products can be produced at practically no cost, they can be sold at full price, discounted, or even free without affecting your costs.
2.1.5 Flexible Format:
The same digital product can be converted into a software, text, audio, image and video format. This means that the same digital product can be sold under a variety of formats and electronics devices.
2.1.6 Global Reach:
Digital products can reside in almost any electronics device located anywhere in the world. This enables you to sell not only locally, but internationally. Shipping your digital products overseas can be as simple as pressing a button in your computer.
Cons: What could be good reasons not to sell digital products?
2.2.1 Overwhelming Competition:
Since they are so easy to produce, the barrier to entry for the digital products business is very low, almost anyone can sell digital products as long as they have a computer and access to the internet.
2.2.2 Piracy and/or Theft:
Digital piracy and theft is rampant online. It is very easy to get hacking and scraping tools online. If your digital product is selling well, it would probably be pirated or stolen at some point. 2.2.3 Restrictions by Selling Platforms:
Depending on your digital product, you might only be able to sell it on certain online digital platforms like e-commerce platforms.
By having no choice but to sell to certain online platforms, you must follow their guidelines, otherwise, you might become banned from these platforms.
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3. Digital Products You Can Profitably Sell Online
3.1 Text
The digital products we read in order to be consumed are called text digital products. Some samples are:
- Ebooks
- Paid Online Articles
- Educational Courses
Note: It doesn’t matter if these ebooks and paid online articles gets converted to paper prints. They are still text digital products.
3.2 Audio
Digital products that must be heard in order to be consumed are called audio digital products. Some examples are:
- Audiobooks
- Podcasts
- Educational Courses
- Digital Music
- Digital Sound Effects
- Audio files converted to video
3.3 Videos:
Digital Products that must be watched and mostly heard to be consumed are called video digital products. Some samples are:
- Paid YouTube Videos
- Paid Movies such as those in streaming platforms like Netflix
- Educational Courses
3.4 Code:
Digital products that do certain actions based on the user’s input commands are called code or Software digital products. Some examples are:
- The operating systems that run your Windows, Apple and Linux computers
- The softwares installed in your Windows, Apple and Linux computers that perform certain functions like word processing, number crunching, graphics, gaming and so on
- The operating systems that run your Android or Apple smartphone or tablet
- The apps installed in your Android or Apple smartphone or tablet that perform certain functions like word processing, number crunching, graphics, photo editing, gaming and so on
- The gaming softwares installed in your Playstation, Xbox, Nintendo, and other gaming devices
3.5 Images:
Digital products that need to be seen in order to be consumed are called image digital products. They are different from text products in that they don’t need to be read, only seen. Some paid examples are:
- NFT Art (Non-Fungible Token) Art
- Pixel Art
- Website Graphics
- Ebook and Audiobook Cover Art
- Video Images
- Stock Images
- Craft Patterns
- Downloadable Prints
- Blueprints
3.6 Digital Licenses:
There are digital product sellers that don’t sell their digital products outright. There are those that only sell the licenses to their digital products.
For example, there are photographers and stock image platforms who sell only the license to use their image. Some of these companies are Shutterstock and Pixabay.
The biggest Database Management Systems (DBMS) in the world are usually sold only under a licensing deal. Some of the DBMS companies that do this are Oracle, PeopleSoft, and Salesforce.
Let us not forget that MicroSoft became one of the most profitable billion dollar company because it didn’t sell the DOS and Windows PC operating system, but just licensed it to companies and individuals.
3.7 Membership/Subscription:
There are digital products that you can only access if you are a paying member of the company producing them. Some examples are:
- Freemium softwares like Canva offer the basic functions of their software for free, but if you need to access the more advanced features of Canva, you would need to pay for membership/subscription.
- YouTube is free to use but you would get served with ads. The ads free version of YouTube together with its advanced features are available only to subscribers who pay for membership/subscription.
- In the field of music, the whole catalog of Spotify’s music and podcast catalog are available to paying members/subscribers.
- Streaming services like Netflix, Apple TV, Hulu, Amazon Prime, and so on have long adapted the membership/subscription revenue model.
3.8 Task Based:
Task Based digital products are tasks allied with digital products. The creator of the digital product performs a “task” in order for the digital product to be created. Some example are:
- News Texts, Audios and Videos: Although podcasts and videos are created only once but can be consumed many times, their shelf life has a limit. This is because there are only a few people who would watch a news report again after they have already viewed it once.
- If you are a freelancer doing digital products for someone else like a ghostwriter. In essence, you are being paid for the task you perform and not the digital product itself. You don’t get to benefit from the repeated sales of the digital products you produce.
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4. How You Can Create Digital Products
While it is relatively very easy to create any digital product, making a profitable business out of digital products can be very hard. Here is a process you can follow to have a chance of success selling digital products:
4.1 Plan First:
Begin with the end in mind. Project yourself mentally into the future to see what kind of image or result you want out of your digital products business. Here are a few questions you should ask yourself:
- Do I want to earn my full-time income selling digital products or would it be just a part-time source of income?
- Do I want to just be a freelancer creating digital products for someone else and not selling them myself?
- Could I also sell courses and other information regarding the digital products I’m selling? For example, if you’re selling digital prints of famous painting, would you also sell courses about painting and ebooks about paintings and famous painters? This is called upselling.
- What digital products am I interested in selling? Many amateur digital product sellers make the mistake of selling the top selling or most trendy digital products around. They are likely to give up on their digital business the first time they encounter sales troubles.
This is because they are only focused on the money aspect of the digital business. So, their digital business effort is at best, a forced effort into making money.
Better sell digital products that you actually want to sell. This would make you not only work harder at selling your digital products, but you’ll more likely to endure the low points of your digital products business.
How do I want to be perceived by society because of my digital products? There are many people who have gotten rich because of selling “controversial” digital products.
For example, PornHub and other porn websites are one of the most profitable and visited sites online. Although a lot of the owners of these sites have become very rich, even billionaires, a lot of people don’t think too highly of them.
4.2 Market Research:
Take the time to study the market. What sells, Who is selling them, How are they being sold, and what are the customer reactions to these digital products being sold.
You can use social media trends for this. For example, you can check social media accounts dedicated to the particular digital products you want to sell.
For example, if you’re selling digital images, you can look at Pinterest which is well known social media platform for sharing images, including ones that are being sold and bought.
You can also visit actual e-commerce websites to see what’s selling. For example, both eBay and Etsy have features that allow you to see what products have sold, the quantity, and by how much price it sold.
You can also find online blogs and forums related to the digital product you’re interested in selling. You might luck out and find seldom accessed information regarding which particular digital products sell well and who’s buying them.
Online product reviews and customer comments. These online informations tell you how much the customer likes/dislikes a certain digital product. This is good for brainstorming a better digital product than the ones that are actually selling well.
Ask potential customers directly. They might have a digital product in mind that you haven’t considered yet. You can email them, engage with them in social media, and so on.
4.3 Find Proof:
Although everything in life is a risk or even a gamble. There are tools that you can use to verify your chances of success at something, even in selling digital products.
For example, statistics and professionally done market studies are a good way to indicate the buying behavior of consumers.
There are many online companies that specialize in statistical reports and market studies, like Statista for one. If you want market information for a certain industry, you can usually find it here, including for the digital products industry.
Another tool that might help you would be Google Trends, it is a free statistical tool from Google that shows you the search popularity of certain keywords including digital products.
4.4 Take Action and/or Sell:
Once you think that you’ve made adequate planning, market research, and finding proof of probable success, its time to decide if you would indeed start selling digital products or not.
If you do, start selling digital products in small quantities using as many free online tools as possible to minimize risk while testing your probable business success.
You can use free to cheap software tools to create your digital products. You could also start selling on e-commerce platforms that have the facility to sell digital products.
4.5 Create a Blog, Website and/or Online Store:
Once you have proof that your digital products are selling on e-commerce platforms. It would be time to invest some money on your own platform which includes a blog and/or website and/or online store.
With your own platform, you have more flexibility in selling your digital products, unlike using a popular e-commerce platform where you are bound by their rules and is always subject to being banned.
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5. How To Sell Digital Products
These sales and marketing tips for digital products are helpful whether you are just an amateur selling your first digital products or already a seasoned professional:
5.1 Make a High Quality Product:
All the slick sales and marketing tools and strategies out there won’t help you make great sales if you have a poor quality product. But the product is just a part of it, you must also offer quality customer service, delivery, pricing, and so on.
5.2 Have a Lead Magnet or a Freemium Model:
It’s no big wonder why freemium apps and software abound: they simply sell themselves. Freemium apps and softwares offer the potential subscribers a taste of what they can do without forcing them to commit financially at first.
Once the potential subscribers grow fond of the freemium app or software, they would naturally become a power user and would gladly pay to become paying subscribers of the app or software.
5.3 Have an Affiliate Program:
There’s a big reason why software and app companies are spending big money on affiliate marketers, it’s because its one of the best ways to increase sales and expand market reach. It is also not as expensive as compared to traditional advertising and marketing methods.
5.4 Social Media:
Social media and most especially social media influencers are one of the most important tools today in advertising and selling your digital products. Social media influencers are likely to come cheaper than traditional celebrity endorsers.
5.5 Collect Pre-Orders:
Pre-orders are a good way to combine advertising and selling. For one, you generate interest because you are selling your soon to be completed digital products at less than the full price.
You also create a psychological demand for your digital product because there would be consumers who would want to be the first customers of your soon to be released digital products.
5.6 Crowdfunding:
This has become one of the best tools to raise funding and to gauge consumer interest in your product.
However, do take in mind that not all crowdfunding campaigns are successful. However, at least you are able to gauge consumer interest/disinterest in your product.
5.7 Offer Money-Back Guarantee/Warranty:
Offering a reasonable money-back guarantee/warranty would ease the minds of your quality conscious customers.
By offering it, you are basically telling your customers that your digital products are of such a high quality that you are confident enough to think that no one would think so otherwise. If they do, then you are willing to give their money back.
However, take reasonable steps to ensure that your guarantee/warranty is not abused by some customers. This can be done by a well written warranty contract/clause.
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Final Words
There are many digital products that you can sell online. You could sell texts, audio, video, code and so on.
But before you do, ensure that you have a good digital products business plan by having a business plan, doing market research, and finding reasonable proof that your business has a chance of succeeding.
You can also improve your chances of success by actually creating a high quality product, a lead magnet/freemium model, an affiliate program and by engaging in social media marketing.
Additionally, you can do pre-orders and crowdfunding as well as offer money-back guarantee/warranty schemes.
But most of all, don’t just concentrate on the money aspect of the business just because digital products are very profitable products, do it because you are interested in the digital products you are selling and are proud to advertise them to all people.
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