Digital products
A digital product refers to media or intangible assets that can be continuously sold and distributed online without requiring inventory restocking. These products are typically available as downloadable or streamable digital files, including MP3s, PDFs, videos, plug-ins, and templates.
Why sell digital products versus physical goods
Digital products possess numerous benefits that make them particularly appealing for sales:
- Low overhead costs. You don’t have to hold inventory or incur any shipping charges.
- High profit margins. There’s no recurring cost of goods, so you retain the majority of your sales in profits.
- Potential to automate. Orders can be delivered instantly, letting you be relatively hands-off with fulfillment.
- Flexible products. You can offer free products to build your email list, monthly paid subscriptions for access to exclusive digital content, or licenses to use your digital products. You have a lot of options as to how you incorporate digital products into your business.
- E-learning is the future of education. You have a massive opportunity to expand your business and impact with e-learning, an industry expected to be worth $374 billion by 2026.
However, it is important to be aware of the unique difficulties that come with digital products.
- You’re competing with free content. With digital goods, consumers can probably find free alternatives to what you’re selling. You’ll have to think carefully about the niche you target and your product descriptions, offer high-quality products, and know how to build your brand in order to compete.
- You’re susceptible to piracy/theft. You need to take precautions and reduce these risks by employing the right tools to protect your products.
- There are some restrictions on how you sell. For example, you must sell physical products through the Facebook and Instagram sales channel according to their commerce policy.
If you use the appropriate tools when designing your digital product business, you can overcome most of these challenges.
How to create digital products
Rather than waiting for a sudden moment of inspiration, it is important to understand that coming up with a successful business idea involves a systematic approach. While it is wonderful to have an idea that sparks enthusiasm, if you desire an idea that is profitable, you must engage in a procedure that includes brainstorming, research, and validation.
1. Brainstorming
When brainstorming, it is important to generate a variety of ideas without being overly critical. Good ideas can come from bad ones and vice versa. The goal is to avoid overthinking and be open to all possibilities. If you need help getting started, here are some questions that can help spark your creativity.
- Can you teach customers how to use your products? For example, if you sell knitting products, you could offer appointments to teach advanced knitting techniques.
- Are there things you can help your customers with related to your overall industry? If you sell surfboards, you could create a workout program to help your customers stay in surf shape at home.
- What are the values you’ve built your business on, and what are topics related to them? For example, if you sell sustainable apparel, you could create a course teaching your customers how to live a more sustainable life.
- In what ways could you bring your community of customers together? If you sell kitchen supplies, you could run a virtual guided wine tasting event.
- What are you good at? If you’re really great at product photography, you could teach other people how to get better at product photography too.
2. Research
In order to generate a list of ideas, conduct research to identify pain points that your customers experience in relation to your product, industry, or values. Additionally, explore topics that your customers are passionate about or find exciting. These areas offer ample business opportunities to create educational products that provide value.
Here are a few suggested starting points for conducting research.
- Facebook groups. There are Facebook groups dedicated to every niche and audience imaginable, making them a great place to learn what your potential customers care about.
- Industry forums. Forums dedicated to hobbies and communities in your industry can help you learn more about what people want and need in your broader industry.
- Product reviews. Read both the reviews for your products and competitors’ products to get ideas. These could come from the reviews on product pages as well as stand-alone reviews on blogs and other websites.
- Blog posts and comments. Read the blog content your community might be reading, as well as the comments, to get even more ideas. For example, if you sell auto parts, dig around on automotive blogs.
- Emails from customers. Finally, don’t forget to go back and reread any emails or messages you have gotten from customers over the years. The people who took the time to contact you with thoughts and concerns are usually “high intent” customers and they might have shared some really useful insights.
3. Validation
Before dedicating a significant amount of time to an idea, it is essential to validate and ensure its reliability. It is undesirable to invest a considerable amount of time or money into a new venture without having knowledge of its potential for success.
There are a few methods to verify your idea:
- Keyword research. Use a keyword tool to see how many people are searching for your topics. This will give you an idea of the opportunity size of each one.
- Google Trends. Search your topics on Google Trends. Look for topics that are growing in interest. This means the opportunity size will keep growing.
- Ask for feedback. Contact your customers directly, either through email or social media. A poll or survey is a great way to collect customer feedback.
- Start small and iterate. Sometimes, the easiest way to validate an idea is to experiment with a smaller version of the idea with room for growth. The goal is to get something out into the world as soon as possible so you can put your idea to the test and improve from it from there.
Regardless of the industry you belong to, your customers would find your unique strengths and knowledge invaluable.
4. Create an online store
After confirming the viability of your digital product idea, your next step would be to acquire an ecommerce platform for selling it.
Types of digital products to sell
To assist you in narrowing down your choices, we have compiled a list of the most profitable categories of digital products available for online sale, along with successful sellers in each respective niche.
1. eBooks (and audiobooks)
Selling eBooks has the potential to generate significant profits since they are among the most popular information products that consumers choose to invest their money in.
The market has experienced a significant growth in recent years, as evidenced by the increase in eBook units sold from 170 million to 191 million between 2019 and 2020. Considering the continued upward trend in sales, now presents an opportune moment to write your own eBook and seize a portion of this thriving market.
You don’t need to be Stephen King to write something that sells well, so don’t worry. Just focus on writing about what you know. There are numerous eBook niches that can be unexpectedly profitable, particularly in the non-fiction and educational genres.
2. Online courses
One other effective method of earning money from your knowledge entails developing and marketing an online course. Are there any subjects in which you possess extensive expertise? Do you possess any specific abilities that you believe others could gain from? If that’s the case, you can bundle those skills and knowledge into a digital product and sell it.
By following a systematic process, John D. Saunders achieved the accomplishment of earning more than $10,000 in a single day solely through his web design accelerator and SOPs courses. As a result, he presently manages a business that generates a six-figure income and has generated substantial revenue by selling online courses, amounting to hundreds of thousands of dollars.
While not everyone may achieve the same level of success as John, that does not imply that earning a good income is impossible if you possess sought-after knowledge. Below are a few suggestions for lucrative online course niches that are in high demand.
- Fitness courses
- Cooking courses
- Music courses
- Business and entrepreneurship courses
- Language learning courses
- Art courses
- Dating and relationships courses
After determining what you want to teach, the next step is to choose the format in which you would like to deliver your course, such as video, text, audio, etc. Once that decision is made, you can proceed to create a curriculum outline and begin developing your educational content.
3. Digital art
Are you an artist or graphic designer? There is a significant demand for digital art, so you can make money from your skills and transform your hobby into a source of income. One way to do this is by offering your services to new startups that require talented designers to create unique logos for their businesses.
Although online logo makers offer a cost-effective choice for small businesses, they fail to measure up to the designs created by a talented graphic designer. This enables you to demand higher prices for your services.
If you want to tap into the same market, you can follow in the footsteps of Designer SilverLyons who took advantage of the increasing popularity of Twitch streaming by launching a range of pre-made emotes, icons, and badges. This offers an opportunity for avid gamers to do something similar.
In addition to designing your own creations, you have the opportunity to sell supplementary products for well-known graphic design software. Currently, there is a strong demand for brushes, gradients, and palettes compatible with programs such as Photoshop, Illustrator, and Procreate, making this a profitable market worth considering.
NFTs are currently a popular subject, particularly in the realm of digital art. If you are already involved in selling digital art, you may want to explore the possibility of expanding into NFTs. Nevertheless, it is important to approach this venture with caution and thorough research to fully comprehend the associated risks.
Some other digital products related to art that are popular to sell are stock icons (vector images), brand kits, backgrounds, emotes, badges, banners, and 3D artwork.
4. Subscriptions and memberships
If you are already an influencer with a large audience, starting a site exclusively for members and selling subscription products is another brilliant concept.
The opening of a new recurring venue stream called the Mythical Society by YouTubers Rhett & Link from the Good Mythical Morning channel ensured guaranteed sales due to their already existing millions of subscribers. This private online community grants subscribers access to exclusive content and behind-the-scenes footage.
Even though having an existing audience is beneficial, it is not necessary to launch a successful subscription service. An example of this is creator Attune to the Moon, who has achieved success in the spiritual wellness industry by selling seasonal subscription packages.
Subscription packages could consist of weekly or monthly content, such as magazines or meal plans, the opportunity to access a gated social community, and a variety of other perks.
5. Photography
If you have a passion for photography, you could potentially transform your hobby into a successful full-time career by selling your high-quality photos through online platforms.
To approach this, you can consider the option of selling stock photos on platforms such as Shutterstock. However, this market is heavily saturated, and it can be challenging to stand out and achieve sales. Alternatively, you might find greater success by selling photos commissioned by clients, offering event photography services (such as weddings or birthdays), and specializing in portrait photography.
No matter what direction you choose, it is essential to have an impressive photography portfolio that exhibits your finest work. This will enable you to distinguish yourself from others.
