How to Sell Digital Products Online – Profitably And Strategically

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Key Takeaways

  • Evaluate your current situation and how to turn your expertise and experiences into a digital product.
  • Understand your market, niche, and competition.
  • Create digital products related to your passions and expertise while keeping the three core markets in mind.
  • Customers are more likely to buy from you if you can demonstrate tangible results from your products.
  • Conduct thorough market research to identify customer problems and create digital products that address them.
  • Consider the income potential of different markets. Wealth, health, and relationships are the three core markets.
  • Analyze your competition by purchasing their products and look for areas where you can improve your product.
  • Choose the right tools and platforms for creating and selling your digital products, considering your target audience and marketing strategy.
  • Effective marketing, whether through SEO, social media, paid advertising, or email marketing, is crucial to driving traffic and sales for your digital products.

What Are Digital Products?

Digital products are intangible goods or services that are created, distributed, and consumed in a digital form. Digital products are often sold and delivered through online platforms or marketplaces, making it easy for consumers to access and purchase them from anywhere in the world.

Digital products are highly scalable and can be produced and distributed at a low cost, making them a profitable business model for creators and entrepreneurs of all kinds.

Main Types of Digital Products

  • Software applications
  • E-books and digital publications/magazines
  • Music and audio files
  • Video content and streaming services
  • Online courses and webinars
  • Digital art (tutorials, art resources, digital art tools, etc.)
  • Graphic designs (icons, patterns, illustrations, fonts, etc.) – some of the easiest digital products to sell
  • Printables and templates
  • Games and mobile applications
  • Virtual and augmented reality experiences
  • Online memberships and subscriptions
  • Digital marketing services and tools
  • Social media content and management tools
  • NFTs
  • Affiliate products (digital products that you haven’t created but can sell as an affiliate)

While many sell info products, there are still a lot of digital products to sell than just info products, for example, graphic designs, games, and music.

Benefits of Selling Digital Products

  • Low overhead costs: Digital products can be produced and distributed cheaply, which means higher profit margins for sellers.
  • Easy distribution: Digital products can be distributed quickly and easily to customers worldwide without needing physical shipping.
  • High scalability: Digital products can be easily scaled to meet increasing demand without incurring additional production costs.
  • Convenience: Customers can access and download digital products instantly without waiting for shipping or delivery.
  • Eco-friendly: Digital products are environmentally friendly since they do not require physical production (excluding printables) or shipping, which reduces waste and carbon footprint.
  • Greater reach: Digital products can reach a wider audience since they can be sold globally without any geographical limitations.
  • Passive income: Once a digital product is created, it can generate passive income as long as it’s on sale, without the need for ongoing production or maintenance costs.
  • Easy to update: Digital products can be easily updated and improved based on customer feedback, ensuring they remain relevant and valuable over time.
  • Ease of sales: You can sell digital products others have created. This is called affiliate marketing and is one of the easiest ways to sell digital products.

The Difference Between Digital Products and Digital Services

The main difference between digital products and digital services is the way in which they are consumed. Digital products are goods or assets that customers can download or access, whereas digital services are intangible offerings that are delivered and consumed online.

Digital products are typically standalone items that customers can purchase and own. Digital products can be used repeatedly and do not require ongoing interaction with the seller or provider.

On the other hand, digital services are offerings provided by a seller or provider and consumed by a customer over time. Digital services are often delivered online and require ongoing interaction with the provider.

Subscription business models or memberships are service-based business models where the customer can get either a digital product, physical product, access to a digital service, or access to a service.

Related article: Digital product vs. Digital Service.

How To Sell Digital Products, Step-by-Step

Selling digital products has become easier and more accessible than ever before. However, the process of creating and selling digital products can be daunting, especially if you’re new to the world of e-commerce.

Below is a step-by-step guide on how to sell digital products online.

Evaluate Yourself and Your Current Situation

Your knowledge, experience, and skills can be monetized into various digital products. If you are an artist, you can sell digital art assets of many kinds, or if you are a musician or a financial planner, the same thing applies.

If you own a physical business, for example, a t-shirt business, you could create an e-book about how to run an online t-shirt business, etc.

Think about your passions and what are the things that you could talk about all day, nonstop. Think about the way you live and if there’s something that others could learn from. Daily habits, eating habits, achievements, etc., can all be monetized through digital products.

Examples of monetizing different aspects of your life:

  • Daily habits: Teach via e-book how people can build healthy habits.
  • Eating habits: Teach via online course how people can eat healthier.
  • Exercise routines: Teach via mastermind how people can lose weight and gain higher self-confidence.
  • Knowledge: Teach via e-book a new way of doing things based on your knowledge.
  • Skills: Teach via online course a new skill you are a professional at.
  • Experience: Teach via a masterclass your experiences in a specific topic.
  • Assets: Sell a license, subscription, or membership to some of the assets you have created, for example, digital art brushes, fonts, templates, etc.

The key to monetizing your way of living, skills, knowledge, experience, etc., is that you’ve had results that you can show.

People buy from you if you have results to show. Customers are looking for solutions to their problems, and if you can show a way to get the results that you’ve had, there’s no stopping them from buying your product. Evaluate your results and whether someone would be willing to learn and buy from you.

If you feel like there’s nothing that you could sell based on your own life, experience, knowledge, etc. You can always try out affiliate marketing, which is essentially selling other businesses’ digital products.

Do Market Research And Search For A Problem

There are two ways to approach market research. You either research the market from the perspective of what you are passionate about or from the perspective of what is needed in the market.

Both ways can be lucrative and result in a lot of sales, but the latter one is where you make the most money.

Often people create products they would like to create rather than solving a customer’s problem. Digital products (like any product) are about solving a problem. The bigger the problem, the bigger the income. Selling digital printables can bring you money, but it’s limited to the size of the problem it is solving.

Doing market research through your passion

Let’s imagine you are a professional artist and would like to teach how to create digital concept art. There are already these kinds of products, courses, and classes, so essentially you are not solving a problem.

You can still make money, but it can be limited.

This is, however, the easiest way to make money online. Selling what you already know, have done, or like to do.

Avoid creating a product no one wants, needs, or is already highly saturated by the competition (except if you can create the ultimate solution that the market has not experienced yet). There are many reasons why digital products fail, the biggest being that you create products no one wants.

Searching a Problem And Solving It

The more lucrative and immensely harder way to make money with digital products is to solve a customer’s problem. If you can create a digital product that solves a problem that hasn’t been solved before, you can make a lot of money.

ConvertKit is a fantastic example of a digital service that offers a digital product. ConvertKit is an email service provider and one of the best in the industry (I use the service to a great extent). They didn’t solve a new problem per se, but they solved it efficiently and probably better than anyone else and thus became a market leader in their niche.

If you are able to solve a new problem or solve the problem better than anyone else, you will win and get a market share.

Best ways to do market research:

  • Google Trends: From Google Trends, you can find out trending topics and if there’s a product you could create to satisfy the trending demand. Remember, trends can come and go, so be selective in the process.
  • Google Keyword Planner: With Google Keyword Planner, you can type in the digital product you are creating or your overall niche and see its search volume. This way, you can evaluate whether people are looking for the type of product you intend to create.
  • Etsy: Use Etsy’s search bar to see if your digital product (idea, concept) is already being sold and in what quantities. The search result will give you a good idea of the competition and how many products are already available (just on Etsy alone).
  • Amazon: Amazon’s search results show you sales quantities, the number of products, customer reviews, pricing, etc. From this data, you can get an idea of what is already being sold and whether there’s demand for your digital product.
  • Competition: Use Google Search, Facebook groups, Reddit, forums, Pinterest, etc., to find what your competitors are doing, but also what kind of problems potential customers might have. Problems you could solve with your digital product.
etsy-digital-planner-competition-research
Notice the 416,988 results (incl. ads) that pop up for digital planner (keyword/digital product). It means there are roughly 400,000 digital planner products already offered on Etsy.

Understand Markets And Income Potential

Not every market is made equal. Health, wealth, relationships, and culture all have different income potentials. Culture has the lowest, and wealth has the highest income potential when it comes to making money online.

It does not matter in which niche (specific and focused segment of a larger market) you are, you can make money in it. Just know that not all markets have people with the same will and ability to buy your products.

Main four core markets:

  • Health: Fitness, medicine, mindset, habits, etc.
  • Wealth: Investing, passive income streams, real estate, business development, etc.
  • Relationships: Online and offline dating, romance, love, etc.
  • Culture: Visual arts, dancing, poetry, music, etc.

Research Your Competition

There’s no better way to do competition research than buying the competitor’s products, using them, and evaluating how you could improve upon what is already offered. Etsy, Envato Elements, Creative Market, etc. marketplaces offer plenty of digital products you can buy for an affordable price.

Test, study, and improve what is already available.

When it comes to online courses and other types of digital products, going through the sales pages gives you a good idea of what is being offered, how the customers have reacted, and what areas they like the most.

What to look for when doing competition research for a digital product:

  • Price
  • Product design and layout, incl. color choices, font choice, vibe, and tone of voice
  • File delivery, incl. format, sizes, and features
  • Customer service
  • Customer feedback
  • Number of sales
  • When was the business or store established
  • Product images
  • Product title and description

Create Your Digital Product

When you’ve done market and competition research and understand your niche and market, it’s time to create the product.

As there are many digital products that you can create, there are also as many solutions, tools, and platforms to use for the creation of the product.

Adobe Creative Cloud is probably one of the most versatile and used professional creative tools for all sorts of product creation. Whether it’s visual effects, graphic design, photo editing, digital art, video production, or e-book creation, Adobe has them all.

Canva works brilliantly for smaller projects, like creating digital planners to sell on Etsy or creating templates, checklists, etc.

What’s important is to understand that digital products are intangible. Your job is to create professional-looking digital products that make the buyer trust and appreciate your product. Professional-looking product images and sales pages increase the perceived value, ultimately landing you the sale.

Select A Platform Where to Sell Your Digital Product

As with the tools to create your digital product, there are just as many platforms and marketplaces to sell your digital product.

Below are some of the best platforms and marketplaces to sell your digital product:

When selecting a platform, your website, or a marketplace, think about the way people will find your product. Do you have a social media following, a blog, email list, or are you starting out with zero followers?

Check out: Best ways to sell digital downloads on your website

If you have no following, then choosing a marketplace like Etsy, Amazon, Creative Market, etc., is your best option, as they drive organic traffic to your store and your digital product. Usually, the free platforms offer some sort of marketplace to sell your digital products for free.

If you want to build an online business selling digital products, I highly recommend you create your own website and brand and build from there. I use Namecheap to get domains and use Bluehost to host my website—an easy but effective solution for selling digital products of all kinds.

Marketing Your Digital Product

Every product needs traffic to get sales. The best way to get traffic is through marketing, paid or organic. People can’t buy your product if they don’t know it exists. Marketplaces like Etsy, Amazon, and others mentioned offer the customer a way to search for products (search bar), creating that organic traffic to your product.

Platforms like Podia, Teachable, Shopify, etc., don’t offer the option to search for products, and thus you need to use paid traffic or rely on your following to make sales.

Best ways to market your digital product:

  • SEO (Search Engine Optimization): Create a blog, website, and content that gets traffic from Google, Bing, YouTube, Pinterest, etc., and direct that traffic to your digital product.
  • Social media: Grow Instagram, TikTok, YouTube, etc., social media accounts and drive your followers to your digital product.
  • Paid advertising: Google Ads, TikTok ads, Twitter ads, YouTube ads, Facebook ads, etc., are all ways to get traffic fast to your product. What matters most is the conversion rate and the effectiveness of your ad campaigns.
  • Email marketing: If you have a following, try creating a lead magnet that gets people to sign up for your email list. Through your email list, you can pitch your digital product or products that you are an affiliate of.
  • List on Marketplaces: If you don’t have money for ads, or a following, you can list your product on marketplaces like Etsy, Amazon, Creative Market, etc., that has that built-in audience already.

Emotional game and manipulation:

While the following marketing techniques are widely questionable, they are also widely used, especially in online marketing.

Marketing tactics:

  • FOMO (fear of missing out)
  • Scarcity
  • Rapport building
  • Reciprocal
  • Aspiration
  • Peer pressure
  • Urgency
  • Belief breaking
  • Objection breaking
  • Pattern breaking
  • Stories
  • Addressing dreams, desires, fear, and hopes
  • Filling the gap

etc., are all ways to manipulate the customer’s mind to buy your digital product.

These methods are questionable, but they work very well and are mostly used when selling high-ticket items.

Selling Your Digital Product

The last step in selling digital products online is to make the actual sale. You know your ideal customer; you are in a niche with people willing and able to buy your product. You are driving traffic to your store and your product.

Now it’s time to ensure the conversion from lead/prospect to a paying customer.

Best ways to increase lead conversion:

OTO (One-Time Offers)

One-time offers are, like it says, offers that only exist once and will be taken away when after a certain time period. In online marketing, these one-time offers are usually bogus, running, and always available.

However, it’s your decision whether to create evergreen OTOs or real OTOs. OTOs can be anything: they can be an extra bonus (file, video, template, etc.) for buying your digital product today.

Upsells, Downsells, Cross-sells

Upsells are about offering a higher-priced product or an upgrade to a customer who is already interested in buying your product or service.

Downsell, on the other hand, is the technique of offering a lower-priced product or an alternative to a customer who is not willing to buy the original product or service.

Cross-selling is about offering complementary or related products or services to a customer who has already purchased something.

All of these marketing techniques can increase the likelihood of getting a sale and turning a lead into a customer.

Free Trials

Free trials are especially useful when you are selling a higher-priced product, usually a service or an online course. Potential customers want to experience what the product is all about, how it works, and if it’s for them before shelling out a large sum of money.

Limited-time offers

With evergreen funnels, you usually have limited-time offers, but a closer look will reveal that the limited-time offer is always “limited” and always on. However, it’s a way to make customers feel like they are missing out (FOMO) if they don’t accept the offer now.

Featured image credits.

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Okuha

Digital Artist

I’m a digital artist who is passionate about anime and manga art. My true artist journey pretty much started with CTRL+Z. When I experienced that and the limitless color choices and the number of tools I could use with art software, I was sold. Drawing digital anime art is the thing that makes me happy among eating cheeseburgers in between veggie meals.

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